,,ii  #aadth ,,congress  #ast ,session  
,s4 #ahbg  ,,in ,,the ,,senate ,,of     
,,the ,,united ,,states  ,july #bb1     
#bjae ,mr4 ,vitter introduced the       
following bill2 which was read twice and
 referred to the ,committee on ,finance 
,a ,,bill  ,to amend the ,internal      
,revenue ,code of #aihf to improve the  
tax treatment of small businesses4  #a4 
,short title1 etc  7a7 ,short title     
,this ,act may be cited as the ,small   
,business ,tax ,compliance ,relief ,act 
of #bjae4  7b7 ,table of contents ,the  
table of contents of this ,act is as    
follows3 ,sec4 #a4 ,short title1 etc4   
,,title ,i--,small business tax reform  
,sec4 #aja4 ,expansion of cash          
accounting threshold4 ,sec4 #ajb4       
,modification of ,safe ,harbor for      
,expensing of ,acquisition or           
,production ,costs of ,tangible         
,property4 ,sec4 #ajc4 ,removal of      
computer equipment from listed property4
 ,sec4 #ajd4 ,deduction for health      
insurance costs in computing            

self-employment taxes4 ,sec4 #aje4      
,flexible retirement account for small  
businesses4 ,sec4 #ajf4 ,repeal of      
simple plans and simple ,i,r,as4 ,sec4  
#ajg4 ,modification of rules relating to
 the termination of partnerships and ,s 
corporations4 ,sec4 #ajh4 ,repeal of    
special rules for top-heavy plans4      
,,title ,,ii--,provisions related to the
 ,internal ,revenue ,service ,sec4 #bja4
 ,requirement to convene small business 
review panels4 ,sec4 #bjb4 ,penalty     
waivers in cases of good faith efforts4 
,sec4 #bjc4 ,inflation adjustments for  
certain provisions4 ,sec4 #bjd4 ,report 
on uniform definitions4 ,sec4 #bje4     
,report on improvements to customer     
service4 ,sec4 #bjf4 ,reasonable cause  
exception for failure to report certain 
transactions4 ,sec4 #bjg4 ,reasonable   
cause exception4 ,sec4 #bjh4 ,return due
 date modifications4 ,,title            
,,iii--,provisions related to start-up  
businesses ,sec4 #cja4 ,modification of 
application of rules for nonqualified   

deferred compensation plans4 ,sec4 #cjb4
 ,reduction in holding period for       
qualified small business stock4 ,sec4   
#cjc4 ,extension of rollover period for 
qualified small business stock4  ,i     
,small business tax reform  #aja4       
,expansion of cash accounting threshold 
7a7 ,in general  7#a7 ,in general       
,paragraph 7#c7 of section #ddh7;b7 of  
the ,internal ,revenue ,code of #aihf is
 amended by striking #e1jjj1jjj in the  
text and in the heading and inserting   
#aj1jjj1jjj4  7#b7 ,conforming          
amendments ,section #ddh7;c7 of such    
,code is amended-- 7,a7 by striking     
#e1jjj1jjj each place it appears in the 
text and in the heading of paragraph    
7#a7 and inserting #aj1jjj1jjj1 and     
7,b7 by adding at the end the following 
new paragraph3  7#d7 ,inflation         
adjustment ,in the case of any taxable  
year beginning in a calendar year after 
#bjae1 the dollar amount contained in   
subsection 7b77#c7 and paragraph 7#a7 of
 this subsection shall be increased by  

an amount equal to--  7,a7 such dollar  
amount1 multiplied by  7,b7 the         
cost-of-living adjustment determined    
under section #a7;f77#c7 for the        
calendar year in which the taxable year 
begins1 by substituting calendar year   
#bjad for calendar year #aiib in        
subparagraph 7,b7 thereof4  ,if any     
amount as adjusted under this           
subparagraph is not a multiple of       
#ajj1jjj1 such amount shall be rounded  
to the nearest multiple of #ajj1jjj4  4 
7b7 ,exemption from inventory           
requirement ,section #dga of the        
,internal ,revenue ,code of #aihf is    
amended by redesignating subsection 7c7 
as subsection 7d7 and by inserting after
 subsection 7b7 the following new       
subsection3  7c7 ,section ,not ,to      
,apply to ,certain ,cash ,method        
,taxpayers ,if a taxpayer-- 7#a7 would  
otherwise be required to use inventories
 under this section for any taxable     
year1 but  7#b7 the taxpayer meets the  
gross receipts test of section #ddh7;b7 

for the taxable year and is eligible and
 elects to use the cash receipts and    
disbursements method of accounting for  
the taxable year1  then the requirement 
to use inventories shall not apply to   
the taxpayer for the taxable year4  4   
7c7 ,effective date and special rule    
7#a7 ,in general ,the amendments made by
 this section shall apply to taxable    
years beginning after ,december #ca1    
#bjad4  7#b7 ,change in method of       
accounting ,in the case of any taxpayer 
changing the taxpayer's method of       
accounting for any taxable year under   
the amendments made by this section--   
7,a7 such change shall be treated as    
initiated by the taxpayer2 and  7,b7    
such change shall be treated as made    
with the consent of the ,secretary of   
the ,treasury4  #ajb4 ,modification of  
,safe ,harbor for ,expensing of         
,acquisition or ,production ,costs of   
,tangible ,property  7a7 ,requirement   
,to ,modify ,safe ,harbor ,the          
,secretary of the ,treasury or his      

delegate shall1 within #ahj days after  
the date of enactment of this ,act1     
modify ,treasury ,regulations section   
#a4bfc7;a7-#a7;f7 by--  7#a7 increasing 
the amount of the de minimis safe harbor
 for taxpayers without applicable       
financial statements from #ejj to       
#b1ejj1  7#b7 requiring adequate records
 showing the dollar amount being        
expensed in lieu of accounting          
procedures in place at the beginning of 
the taxable year1 and  7#c7 modifying   
the definition of applicable financial  
statement to include reviewed financial 
statements4  7b7 ,effective date ,the   
modifications required by subsection 7a7
 shall apply to taxable years beginning 
after ,december #ca1 #bjad4  #ajc4      
,removal of computer equipment from     
listed property  7a7 ,in general        
,section #bhj;,f7d77#d77;,a7 of the     
,internal ,revenue ,code of #aihf is    
amended by inserting and at the end of  
clause 7iii7 and by striking clause     
7iv74  7b7 ,conforming amendment        

,section #bhj;,f7d77#d7 of the ,internal
 ,revenue ,code of #aihf is amended by  
striking subparagraph 7,b7 and by       
redesignating subparagraph 7,c7 as      
subparagraph 7,b74  7c7 ,effective date 
,the amendments made by this section    
shall apply to taxable years beginning  
after the date of the enactment of this 
,act4  #ajd4 ,deduction for health      
insurance costs in computing            
self-employment taxes  7a7 ,in general  
,paragraph 7#d7 of section #afb7l7 of   
the ,internal ,revenue ,code of #aihf is
 amended by striking for taxable years  
beginning before ,january #a1 #bjaj1 or 
after ,december #ca1 #bjaj and inserting
 for taxable years beginning before     
,january #a1 #bjae44  7b7 ,effective    
date ,the amendment made by this section
 shall apply to taxable years beginning 
after ,december #ca1 #bjad4  #aje4      
,flexible retirement account for small  
businesses  7a7 ,in general ,section    
#djh of the ,internal ,revenue ,code of 
#aihf is amended by redesignating       

subsection 7r7 as subsection 7s7 and by 
inserting after subsection 7q7 the      
following new subsection3  7r7 ,flexible
 retirement account defined  7#a7 ,in   
general ,for purposes of this title1 the
 term flexible retirement account means 
an individual retirement account or     
individual retirement annuity with      
respect to which the requirements of    
paragraphs 7#b71 7#c71 7#d71 and 7#g7   
are met4  7#b7 ,maintained by small     
business  7,a7 ,in general ,this        
paragraph is satisfied for a year with  
respect to a flexible retirement account
 that is part of a plan of an employer  
if the employer has not more than #ajj  
full-time employees on the last day of  
the previous year4  7,b7 ,aggregation   
rules ,for purposes of subparagraph     
7,a71 all employees of any trades or    
business 7whether or not incorporated7  
which are under common control shall be 
treated as employed by a single         
employer4  7#c7 ,participation          
requirements ,this paragraph is         

satisfied with respect to a flexible    
retirement account for a year only if   
for such year the employer maintains a  
flexible retirement account on behalf of
 each employee who--  7,a7 has attained 
age #ba1 and  7,b7 received not less    
than #c1cjj in compensation 7within the 
meaning of section #dae7;c77#c77 from   
the employer in any calendar quarter    
during the previous year4  7#d7         
,automatic enrollment2 employee may     
elect not to participate ,this paragraph
 is satisfied with respect to a flexible
 retirement account that is part of a   
plan of an employer if under the terms  
of the plan--  7,a7 each employee       
described in paragraph 7#c7 7without    
regard to paragraph 7#e77--  7i7 may    
elect-- 7,i7 to have the employer make  
contributions on behalf of the employee 
to a flexible retirement account1 or    
7,,ii7 to have such payments paid to the
 employee directly in cash1 and  7ii7 is
 deemed to have made the election under 
clause 7i77,i71 effective as of the     

first day of the first calendar quarter 
beginning after the employee becomes an 
employee described in paragraph 7#c71 in
 an amount equal to #c percent of the   
employee's compensation1 until the      
employee specifically elects not to have
 such contributions made or to have     
contributions made in a different       
amount1 and  7,b7 amounts contributed   
pursuant clause 7i7 or 7ii7 of          
subparagraph 7,a7 are invested in a     
diversified common stock fund chosen by 
the financial institution holding the   
flexible retirement account until the   
employee specifically elects to direct  
such contributions to a different       
investment option4  7#e7 ,inclusion of  
self-employed individuals ,for purposes 
of this subsection1 the term employee   
includes an employee as defined in      
section #dja7;c77#a74 ,for purposes of  
applying the limitations of sections    
#djb7;h71 #djd7;h71 and                 
#dae7;c77#a77;,a7 with respect to an    
employee described in the preceding     

sentence1 the term compensation has the 
meaning given in subsection             
7p77#f77;,a77ii74  7#f7 ,employer       
contributions ,the employer maintaining 
a flexible retirement account may make  
qualified nonelective contributions 7as 
defined in section #dja7m77#d77;,c77 to 
the flexible retirement accounts of     
employees described in paragraph 7#c71  
but only if such contributions made with
 respect to all such employees bear a   
uniform relationship to the compensation
 of the employees4  7#g7 ,financial     
institutions ,this paragraph is         
satisfied with respect to a flexible    
retirement account if-- 7,a7 such       
account is maintained at a financial    
institution1 including a bank1 credit   
union1 insurance company1 broker or     
dealer registered with the ,securities  
and ,exchange ,commission1 and such     
other entities as the ,secretary may by 
regulation designate1  7,b7 such        
financial institution-- 7i7 provides for
 not less than #c investment options    

among which the employee may choose to  
direct the contributions to and balances
 held in the employee's flexible        
retirement account1 each of which is    
diversified and has materially different
 risk and return characteristics1 and   
7ii7 provides a quarterly report to each
 employee with respect to whom it holds 
a flexible retirement account describing
 the contributions to the account1      
withdrawals from the account1 and       
investment performance of the account1  
and  7,c7 the contributions to and      
balances held in the flexible retirement
 account of an employee may not be      
invested in securities of the employer  
maintaining such account4  4  7b7       
,limitation on deductions by employer   
,subsection 7h7 of section #djd of the  
,internal ,revenue ,code of #aihf is    
amended-- 7#a7 by striking pensions in  
the heading and inserting pensions and  
flexible retirement accounts1  7#b7 by  
striking a simplified employee pension  
each place it appears in paragraph 7#a7 

and inserting a simplified employee     
pension or a flexible retirement        
account1 and  7#c7 by striking ,for     
purposes of subsection 7a77#g71 a       
simplified employee pension shall be    
treated as if it were in paragraph 7#c7 
and inserting ,in the case of a         
simplified employee pension or a        
flexible retirement account1 section    
7a77#g7 shall be applied by treating    
such pension or account as if it were4  
7c7 ,taxability of beneficiary          
,subsection 7h7 of section #djb of the  
,internal ,revenue ,code of #aihf is    
amended-- 7#a7 by striking pensions in  
the heading and inserting pensions and  
flexible retirement accounts1  7#b7 by  
striking #djh7k77 in paragraph 7#a7 and 
inserting #djh7k77 or a flexible        
retirement account 7as defined in       
section #djh7r771  7#c7 by striking     
section #djh7k77#f7 in paragraph        
7#a77;,b7 and inserting subsection      
7k77#f7 or 7r77#d7 of section #djh1     
7#d7 by striking the simplified employee

 pension each place it appears in       
paragraphs 7#a77;,b7 and 7#b77;,a7 and  
inserting the simplified employee       
pension or flexible retirement account1 
7#e7 by striking a simplified employee  
pension each place it appears in        
paragraphs 7#b7 and 7#c7 and inserting a
 simplified employee pension or flexible
 retirement account1 and  7#f7 by       
striking reduced in the case in         
paragraph 7#b77;,b7 and inserting       
reduced1 with respect to a simplified   
employee pension1 in the case4  7d7     
,conforming amendments  7#a7            
,subparagraph 7,a7 of section           
#bai7;g77#e7 of the ,internal ,revenue  
,code of #aihf is amended by striking or
 at the end of clause 7v7 and by adding 
at the end the following new clause3    
7vii7 a flexible retirement account     
7within the meaning of section #djh7r771
 or  4  7#b7 ,paragraph 7#f7 of section 
#bhj;,g7b7 of such ,code is amended by  
striking or at the end of subparagraph  
7,c71 by striking the period at the end 

of subparagraph 7,d7 and inserting 1 or1
 and by adding at the end the following 
new subparagraph3  7,e7 a flexible      
retirement account 7as defined in       
section #djh7r774  4  7#c7 ,subsection  
7j7 of section #djh of such ,code is    
amended--  7,a7 by striking pensions in 
the heading and inserting pensions and  
flexible retirement accounts1 and  7,b7 
by striking pension1 and inserting      
pension or flexible retirement account14
  7#d7 ,subsections 7b71 7c71           
7m77#d77;,b71 7n77#c77;,b71 and         
7u77#a77;,c7 of section #dad of such    
,code are each amended by inserting 1   
#djh7r7 after #djh7p74  7#e7 ,paragraph 
7#f7 of section #dad7u7 of such ,code is
 amended by inserting 1 any flexible    
retirement account under section #djh7r7
 after #djh7p74  7#f7 ,subparagraph 7,b7
 of section #dad7v77#c7 of such ,code is
 amended by inserting 1 #djh7r7 after   
#djh7k74  7#g7 ,clause 7iv7 of section  
#dad7v77#f77;,a7 of such ,code is       
amended by striking 7k7 or 7p7 and      

inserting 7k71 7p71 or 7r74  7#h7       
,paragraph 7#e7 of section #dad7w7 of   
such ,code is amended by striking and at
 the end of subparagraph 7,d71 by       
striking the period at the end of       
subparagraph 7,e7 and inserting 1 and1  
and by adding at the end the following  
new subparagraph3  7,f7 a flexible      
retirement account 7as defined in       
section #djh7r774  4  7#i7 ,paragraph   
7#b7 of section #dae7;a7 of such ,code  
is amended--  7,a7 by striking or at the
 end of subparagraph 7,b71  7,b7 by     
striking the comma at the end of        
subparagraph 7,c7 and inserting 1 or1   
7,c7 by inserting after subparagraph    
7,c7 the following new subparagraph3    
7,d7 a flexible retirement account      
described in section #djh7r71  1  7,d7  
by striking or pension and inserting    
pension1 or account1 and  7,e7 by       
striking or #djh7k7 and inserting       
#djh7k71 or #djh7r74  7#aj7             
,subparagraph 7,c7 of section           
#caba7;a77#e7 of such ,code is amended  

by inserting 1 or a flexible retirement 
account 7as defined in section #djh7r7  
after #djh7k77#f74  7#aa7 ,subparagraph 
7,c7 of section #ccjf7;a77#e7 of such   
,code is amended by inserting 1 or a    
flexible retirement account 7as defined 
in section #djh7r7 after #djh7k77#f74   
7#ab7 ,subparagraph 7,a7 of section     
#digb7;d77#a7 of such ,code is amended  
by striking and at the end of clause    
7iii71 by striking the period at the end
 of clause 7iv7 and inserting 1 and1 and
 by adding at the end the following new 
clause3  7v7 any flexible retirement    
account 7within the meaning of section  
#djh7r774  4  7e7 ,effective date ,the  
amendments made by this section shall   
apply to contributions made after       
,december #ca1 #bjae4  #ajf4 ,repeal of 
simple plans and simple ,i,r,as  7a7    
,simple #dja7k7 plans ,paragraph 7#aa7  
of section #dja7k7 of the ,internal     
,revenue ,code of #aihf is amended by   
adding at the end the following new     
subparagraph3  7,e7 ,termination ,this  

paragraph shall not apply to any cash or
 deferred arrangement adopted after     
,december #ca1 #bjaf4  4  7b7 ,simple   
,i,r,as ,subsection 7p7 of section #djh 
of the ,internal ,revenue ,code of #aihf
 is amended by adding at the end the    
following new paragraph3  7#aa7         
,termination ,this subsection shall not 
apply to any plan established after     
,december #ca1 #bjaf4  4  #ajg4         
,modification of rules relating to the  
termination of partnerships and ,s      
corporations  7a7 ,no termination of    
partnership on sale or exchange of      
assets  7#a7 ,in general ,section       
#gjh7;b77#a7 of the ,internal ,revenue  
,code of #aihf is amended by striking   
only if and all that follows and        
inserting only if no part of any        
business1 financial operation1 or       
venture of the partnership continues to 
be carried on by any of its partners in 
a partnership44  7#b7 ,conforming       
amendments  7,a7 ,section               
#afh7;i77#g77;,b7 of such ,code is      

amended by striking the last sentence4  
7,b7 ,section #gdc7;e7 of such ,code is 
amended by striking paragraph 7#d74     
7,c7 ,section #ggd of such ,code is     
amended by striking subsection 7c74  7b7
 ,no termination of ,s corporation      
status due to excessive passive         
investment income ,paragraph 7#c7 of    
section #acfb7;d7 of the ,internal      
,revenue ,code of #aihf is amended by   
adding at the end the following new     
subparagraph3  7,d7 ,termination ,this  
paragraph shall not apply to taxable    
years ending after the date of the      
enactment of the ,small ,business ,tax  
,compliance ,relief ,act of #bjae4  4   
#ajh4 ,repeal of special rules for      
top-heavy plans ,section #daf of the    
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new subsection3  7j7          
,termination ,this section shall not    
apply to plan years beginning after the 
date of the enactment of the ,small     
,business ,tax ,compliance ,relief ,act 

of #bjae4  4  ,,ii ,provisions related  
to the ,internal ,revenue ,service      
#bja4 ,requirement to convene small     
business review panels ,section #fji7;d7
 of title #e1 ,united ,states ,code1 is 
amended--  7#a7 in paragraph 7#b71 by   
striking and at the end2  7#b7 in       
paragraph 7#c71 by striking the period  
and inserting 2 and2 and  7#c7 by adding
 at the end the following3  7#d7 the    
,internal ,revenue ,service4  4  #bjb4  
,penalty waivers in cases of good faith 
efforts ,the ,commissioner of ,internal 
,revenue may waive the application of   
any provision of the ,internal ,revenue 
,code of #aihf 7other than a criminal   
penalty7 if it is shown that the        
taxpayer acted in good faith or failure 
to comply with the provision was due to 
reasonable cause4  #bjc4 ,inflation     
adjustments for certain provisions  7a7 
,in general ,chapter #gg of the         
,internal ,revenue ,code of #aihf is    
amended by adding at the end the        
following new section3  #gebi4          

,inflation adjustments  7a7 ,in general 
,in the case of any taxable year        
beginning in a calendar year after      
#bjae1 each of the specified dollar     
amounts shall be increased by an amount 
equal to--  7#a7 such dollar amount1    
multiplied by  7#b7 the cost-of-living  
adjustment determined under section     
#a7;f77#c7 for the calendar year in     
which the taxable year begins1          
determined by substituting calendar year
 #bjad for calendar year #aiib in       
subparagraph 7,b7 thereof4  7b7         
,specified dollar amounts ,for purposes 
of subsection 7a71 the specified dollar 
amounts are-- 7#a7 the #ej1jjj amount in
 section #gi7;a77#a71  7#b7 each of the 
#e1bej amounts in section #abg7;a77#b71 
7#c7 each of the #ejj amounts in        
paragraphs 7#aa77;,a71 7#aa77;,b71 and  
7#ab7 of section #agj7;f71  7#d7 the    
#e1jjj amount in section                
#agj7;f77#aa77;,c71  7#e7 the           
#aj1jjj1jjj amount in section           
#bfc;,a7b77#b71  7#f7 each of the dollar

 amounts in section #bgd7;b77#a71  7#g7 
each of the #djj amounts in section     
#bgd7;j71  7#h7 the #a1fjj amount in    
section #bgd7;j77#b77;,b71  7#i7 the    
#aj1jjj1jjj amount in section           
#abjb7;b77#a71  7#aj7 each of the       
#ej1jjj1jjj amounts in section          
#abjb7;d77#a71  7#aa7 the #ej1jjj amount
 in section #abdd7;b77#a71 and  7#ab7   
the #a1jjj1jjj in section               
#abdd7;c77#c77;,a74  7c7 ,rounding  7#a7
 ,any increase determined under         
paragraph 7#e71 7#i71 or 7#aj7 of       
subsection 7b7 shall be rounded to the  
nearest multiple of #ajj1jjj4  7#b7 ,any
 increase determined under paragraph    
7#a71 7#d71 7#aa71 or 7#ab7 of          
subsection 7b7 shall be rounded to the  
nearest multiple of #a1jjj4  7#c7 ,any  
increase determined under paragraph 7#b7
 of subsection 7b7 shall be rounded to  
the nearest multiple of #ejj4  7#d7 ,any
 increase determined under paragraph    
7#c71 7#g71 or 7#h7 of subsection 7b7   
shall be rounded to the nearest multiple

 of #ajj4  7#e7 ,any increase determined
 under paragraph 7#f7 of subsection 7b7 
shall be rounded to the nearest multiple
 of #e4  4  7b7 ,conforming amendments  
7#a7 ,section #abjb7;b77#c7 of such     
,code is amended by striking paragraph  
7#a77;,a7 shall be applied by           
substituting #e1jjj1jjj for #aj1jjj1jjj 
and inserting the amount under paragraph
 7#a77;,a7 shall be #ej percent of such 
dollar amount 7determined without regard
 to this paragraph74  7#b7 ,section     
#abdd7;b77#b7 of such ,code is amended  
by striking #ajj1jjj and inserting #bjj 
percent of the amount under paragraph   
7#a74  7c7 ,clerical amendment ,the     
table of sections for chapter #gg of    
such ,code is amended by adding at the  
end the following new item3  ,sec4      
#gebi4 ,inflation adjustments4  4  7d7  
,effective date ,the amendments made by 
this section shall apply to taxable     
years beginning after the date of the   
enactment of this ,act4  #bjd4 ,report  
on uniform definitions ,not later than  

,june #cj1 #bjaf1 the ,commissioner of  
,internal ,revenue shall submit to the  
,committee on ,small ,business and      
,entrepreneurship of the ,senate1 the   
,committee on ,finance of the ,senate1  
and the ,committee on ,ways and ,means  
of the ,house of ,representatives a     
report detailing changes in law to make 
statutory definitions in the ,internal  
,revenue ,code of #aihf relating to     
small businesses consistent across      
different provisions of such ,code4     
,such report shall include              
recommendations on wording such         
definitions in a manner that is easy to 
understand for a layman not familiar    
with the ,internal ,revenue ,code of    
#aihf4  #bje4 ,report on improvements to
 customer service ,not later than ,june 
#cj1 #bjaf1 the ,commissioner of        
,internal ,revenue shall submit to the  
,committee on ,small ,business and      
,entrepreneurship of the ,senate1 the   
,committee on ,finance of the ,senate1  
and the ,committee on ,ways and ,means  

of the ,house of ,representatives a     
report detailing specific ways to       
improve customer service to small       
businesses1 including objectively       
measurable goals for how to reduce      
response times4  #bjf4 ,reasonable cause
 exception for failure to report certain
 transactions  7a7 ,in general          
,subsection 7d7 of section #fgjg;,a of  
the ,internal ,revenue ,code of #aihf is
 amended to read as follows3  7d7       
,reasonable cause waiver ,no penalty    
shall be imposed under this section with
 respect to any failure if it is shown  
that such failure is due to reasonable  
cause and not to willful neglect4  4    
7b7 ,conforming amendments  7#a7        
,section #fffd7;d77#c7 of the ,internal 
,revenue ,code of #aihf is amended by   
striking if the penalty for such failure
 was rescinded under section #fgjg;,a7d7
 and inserting if it is shown that such 
failure is due to reasonable cause and  
not to willful neglect4  7#b7 ,section  
#fgjg7;c7 of such ,code is amended to   

read as follows3  7c7 ,reasonable cause 
waiver ,no penalty shall be imposed     
under this section with respect to any  
failure if it is shown that such failure
 is due to reasonable cause and not to  
willful neglect4  4  7c7 ,effective date
 ,the amendments made by this section   
shall take effect on the date of the    
enactment of this ,act4  #bjg4          
,reasonable cause exception  7a7 ,in    
general ,no assessable penalty or       
addition to tax shall be imposed under  
the ,internal ,revenue ,code of #aihf if
 it is shown that an action1 or failure 
to act1 by the taxpayer with regard to  
any material element was due to         
reasonable cause and the taxpayer acted 
in good faith4  7b7 ,coordination       
,subsection 7a7 shall not apply to any  
assessable penalty or addition to tax   
for which there is a provision of the   
,internal ,revenue ,code which provides 
for the nonapplication of such penalty  
or addition if the taxpayer's action 7or
 failure to act7 was due to reasonable  

cause4  #bjh4 ,return due date          
modifications  7a7 ,new due date for    
partnership form #ajfe1 ,s corporation  
form #aabj,s1 and ,c corporation form   
#aabj  7#a7 ,partnerships  7,a7 ,in     
general ,section #fjgb of the ,internal 
,revenue ,code of #aihf is amended by   
adding at the end the following new     
subsection3  7f7 ,returns of            
partnerships ,returns of partnerships   
under section #fjca made on the basis of
 the calendar year shall be filed on or 
before the #aeth day of ,march following
 the close of the calendar year1 and    
such returns made on the basis of a     
fiscal year shall be filed on or before 
the #aeth day of the third month        
following the close of the fiscal year4 
4  7,b7 ,conforming amendment ,section  
#fjgb7;a7 of such ,code is amended by   
striking #fjag1 or #fjca and inserting  
or #fjag4  7#b7 ,s corporations  7,a7   
,in general ,so much of subsection 7b7  
of #fjgb of such ,code as precedes the  
second sentence thereof is amended to   

read as follows3  7b7 ,returns of       
certain corporations ,returns of ,s     
corporations under sections #fjab and   
#fjcg made on the basis of the calendar 
year shall be filed on or before the    
#cast day of ,march following the close 
of the calendar year1 and such returns  
made on the basis of a fiscal year shall
 be filed on or before the last day of  
the third month following the close of  
the fiscal year4  4  7,b7 ,conforming   
amendments  7i7 ,section #acfb7;b7 of   
such ,code is amended--  7,i7 by        
striking #aeth each place it appears and
 inserting last1  7,,ii7 by striking    
#ba_/b each place it appears and        
inserting #c1 and  7,,iii7 by striking  
#b months and #ae days in paragraph 7#d7
 and inserting #c months4  7ii7 ,section
 #acfb7;d77#a77;,c77i7 of such ,code is 
amended by striking #aeth and inserting 
last4  7iii7 ,section                   
#acfb7;d77#a77;,c77ii7 of such ,code is 
amended by striking such #aeth day and  
inserting the last day of the #c;d month

 thereof4  7#c7 ,conforming amendments  
relating to ,c corporations  7,a7       
,section #agj7;a77#b77;,b7 of such ,code
 is amended by striking third month and 
inserting #dth month4  7,b7 ,section    
#efc of such ,code is amended by        
striking third month each place it      
appears and inserting #dth month4  7,c7 
,section #aced7;d77#a77;,b77i7 of such  
,code is amended by striking #c;d month 
and inserting #dth month4  7,d7         
,subsections 7a7 and 7c7 of section     
#fafg of such ,code are each amended by 
striking third month and inserting #dth 
month4  7,e7 ,section #fdbe7;a77#a7 of  
such ,code is amended by striking third 
month and inserting #dth month4  7,f7   
,subsections 7b77#b77;,a71 7g77#c71 and 
7h77#a7 of section #ffee of such ,code  
are each amended by striking #crd month 
and inserting #dth month4  7#d7         
,effective date ,the amendments made by 
this subsection shall apply to returns  
for taxable years beginning after       
,december #ca1 #bjae4  7b7 ,modification

 of due dates by regulation ,in the case
 of returns for taxable years beginning 
after ,december #ca1 #bjac1 the         
,secretary of the ,treasury or the      
,secretary's delegate shall modify      
appropriate regulations to provide as   
follows3  7#a7 ,the maximum extension   
for the returns of partnerships filing  
,form #ajfe shall be a #f-month period  
beginning on the due date for filing the
 return 7without regard to any          
extensions74  7#b7 ,the maximum         
extension for the returns of trusts and 
estates filing ,form #ajda shall be a   
#e-month period beginning on the due    
date for filing the return 7without     
regard to any extensions74  7#c7 ,the   
maximum extension for the returns of    
employee benefit plans filing ,form     
#eejj shall be an automatic #c-month    
period beginning on the due date for    
filing the return 7without regard to any
 extensions74  7#d7 ,the maximum        
extension for the ,forms #iij 7series7  
returns of organizations exempt from    

income tax shall be an automatic        
#f-month period beginning on the due    
date for filing the return 7without     
regard to any extensions74  7#e7 ,the   
maximum extension for the returns of    
organizations exempt from income tax    
that are required to file ,form #dgbj   
returns of excise taxes shall be an     
automatic #f-month period beginning on  
the due date for filing the return      
7without regard to any extensions74     
7#f7 ,the maximum extension for the     
returns of trusts required to file ,form
 #ebbg shall be an automatic #f-month   
period beginning on the due date for    
filing the return 7without regard to any
 extensions74  7#g7 ,the maximum        
extension for the returns of ,black     
,lung ,benefit ,trusts required to file 
,form #fjfi returns of excise taxes     
shall be an automatic #f-month period   
beginning on the due date for filing the
 return 7without regard to any          
extensions74  7#h7 ,the maximum         
extension for a taxpayer required to    

file ,form #hhgj shall be an automatic  
#f-month period beginning on the due    
date for filing the return 7without     
regard to any extensions74  7#i7 ,the   
due date of ,form #cebj-;,a1 ,annual    
,information ,return of a ,foreign      
,trust with a ,united ,states ,owner1   
shall be the #aeth day of the #dth month
 after the close of the trust's taxable 
year1 and the maximum extension shall be
 a #f-month period beginning on such    
day4  7#aj7 ,the due date of ,fin,c,e,n 
,form #aad 7relating to ,report of      
,foreign ,bank and ,financial ,accounts7
 shall be ,april #ae with a maximum     
extension for a #f-month period ending  
on ,october #ae1 and with provision for 
an extension under rules similar to the 
rules of #bf ,c4,f4,r4 #a4fjha-e4 ,for  
any taxpayer required to file such form 
for the first time1 the ,secretary of   
the ,treasury may waive any penalty for 
failure to timely request or file an    
extension4  7#aa7 ,taxpayers filing     
,form #cebj1 ,annual ,return to ,report 

,transactions with ,foreign ,trusts and 
,receipt of ,certain ,foreign ,gifts1   
shall be allowed to extend the time for 
filing such form separately from the    
income tax return of the taxpayer1 for  
an automatic #f-month period beginning  
on the due date for filing the return   
7without regard to any extensions74  7c7
 ,corporations ,permitted ,statutory    
,automatic #f-,month ,extension of      
,income ,tax ,returns  7#a7 ,in general 
,section #fjha7;b7 of the ,internal     
,revenue ,code of #aihf is amended by   
striking #c months and inserting #f     
months4  7#b7 ,effective date ,the      
amendment made by this section shall    
apply to returns for taxable years      
beginning after ,december #ca1 #bjae4   
,,iii ,provisions related to start-up   
businesses  #cja4 ,modification of      
application of rules for nonqualified   
deferred compensation plans  7a7 ,rules 
only apply to plans of publicly traded  
companies  7#a7 ,in general ,section    
#dji;,a of the ,internal ,revenue ,code 

of #aihf is amended by striking         
nonqualified deferred compensation plan 
each place it appears and inserting     
specified nonqualified deferred         
compensation plan4  7#b7 ,specified     
nonqualified deferred compensation plan 
,section #dji;,a7d77#a7 of such ,code is
 amended to read as follows3  7#a7      
,specified nonqualified deferred        
compensation plan  7,a7 ,in general ,the
 term specified nonqualified deferred   
compensation plan means any plan        
maintained by a specified employer for  
the deferral of compensation1 other     
than--  7i7 a qualified employer plan1  
and  7ii7 any bona fide vacation leave1 
sick leave1 compensatory time1          
disability pay1 or death benefit plan4  
7,b7 ,specified employer ,for purposes  
of subparagraph 7,a71 the term specified
 employer means any corporation-- 7i7   
the stock of which is publicly traded on
 an established securities market or    
otherwise1 or  7ii7 which is a member of
 a controlled group of corporations     

7within the meaning of section          
#aefc7;a71 determined without regard to 
section #aefc7;a77#d77 one of which is  
publicly traded on an established       
securities market4  4  7b7 ,conforming  
amendments  7#a7 ,the last sentence of  
section #dji;,a7a77#b77;,b77i7 of the   
,internal ,revenue ,code of #aihf is    
amended to read as follows3 ,for        
purposes of the preceding sentence1 a   
specified employee is a key employee 7as
 defined in section #daf7;i7 without    
regard to paragraph 7#e7 thereof7 of the
 employer44  7#b7 ,the heading of       
section #dji;,a of such ,code is amended
 by inserting specified before          
nonqualified4  7#c7 ,the item relating  
to section #dji;,a in the table of      
sections for subpart ,a of part ,i of   
subchapter ,d of chapter #a of such     
,code is by inserting specified before  
nonqualified4  7c7 ,effective date ,the 
amendments made by this section shall   
apply to amounts deferred after the date
 of the enactment of this ,act4  #cjb4  

,reduction in holding period for        
qualified small business stock  7a7 ,in 
general ,paragraph 7#a7 of section      
#abjb7;a7 of the ,internal ,revenue     
,code of #aihf is amended by striking #e
 years and inserting #c years4  7b7     
,conforming amendments  7#a7 ,paragraph 
7#b7 of section #abjb7;b7 of such ,code 
is amended by striking #e years and     
inserting #c years1  7#b7 ,subparagraph 
7,a7 of section #abjb7;g77#b7 of such   
,code is amended by striking #e years   
and inserting #c years1  7#c7           
,subparagraph 7,c7 of section           
#abjb7;h77#b7 of such ,code is amended  
by striking #e-year and inserting       
#c-year1 and  7#d7 ,subparagraph 7,a7 of
 section #abjb7;j77#a7 of such ,code is 
amended by striking #e years and        
inserting #c years4  7c7 ,effective date
 ,the amendments made by this section   
shall apply to stock issued after the   
date of the enactment of this ,act4     
#cjc4 ,extension of rollover period for 
qualified small business stock  7a7 ,in 

general ,paragraph 7#a7 of section      
#ajde7;a7 of the ,internal ,revenue     
,code of #aihf is amended by striking   
#fj-;day period and inserting #a-year   
period4  7b7 ,conforming amendment      
,paragraph 7#c7 of section #ajde7;b7 of 
such ,code is amended by striking       
#fj-;day period and inserting #a-year   
period4  7c7 ,effective date ,the       
amendment made by this section shall    
apply to sales after the date of the    
enactment of this ,act4