S. 2775 — Introduced in Senate

II 114th CONGRESS 2d Session S. 2775 IN THE SENATE OF THE UNITED STATES April 11, 2016Mr. Hatch (for himself and Mr. Wyden) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to make technical corrections, and for other purposes. 1. Short title; table of contents; etc (a) Short title This Act may be cited as the Technical Corrections Act of 2016. (b) Amendment Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986. (c) Table of contents The table of contents for this Act is as follows: Sec. 1. Short title; table of contents; etc. Sec. 2. Amendments relating to Protecting Americans from Tax Hikes Act of 2015. Sec. 3. Amendment relating to Consolidated Appropriations Act, 2016. Sec. 4. Amendments relating to Fixing America’s Surface Transportation Act. Sec. 5. Amendments relating to Surface Transportation and Veterans Health Care Choice Improvement Act of 2015. Sec. 6. Amendments relating to Stephen Beck, Jr., ABLE Act of 2014. Sec. 7. Amendment relating to American Taxpayer Relief Act of 2012. Sec. 8. Amendment relating to United States–Korea Free Trade Agreement Implementation Act. Sec. 9. Clerical corrections. Sec. 10. Deadwood-related provisions. 2. Amendments relating to Protecting Americans from Tax Hikes Act of 2015 (a) Amendment relating to section 105 Section 132(f)(6)(A) is amended by striking the second sentence. (b) Amendments relating to section 121 Section 41(c) is amended— (1) by striking paragraph (4), and (2) by striking the last sentence of paragraph (5)(C). (c) Amendments relating to section 143 (1) Section 168(k)(2)(B)(i)(III) is amended by inserting binding before contract. (2) Section 168(k)(5)(F) is amended— (A) by striking (or is grafted to a plant that has already been planted before such date), (B) by inserting or grafted after which is planted, and (C) by striking (or so grafted) in clauses (i) and (ii) and inserting or grafted. (3) Section 168(k)(6) is amended to read as follows: (6) Phase-down In the case of qualified property placed in service by the taxpayer after December 31, 2017 (December 31, 2018, in the case of property described in subparagraph (2)(B) or (C)), paragraph (1)(A) shall be applied by substituting for 50 percent— (A) 40 percent in the case of— (i) property placed in service in 2018 (other than property described in subparagraph (2)(B) or (C)), and (ii) property described in subparagraph (2)(B) or (C) which is placed in service in 2019, and (B) 30 percent in the case of— (i) property placed in service in 2019 (other than property described in subparagraph (2)(B) or (C)), and (ii) property described in subparagraph (2)(B) or (C) which is placed in service in 2020. . (4) Section 168(k)(7) is amended by striking paragraphs (1) and (2)(F) and inserting paragraphs (1), (2)(F), and (4). (d) Amendments relating to section 202 (1) Section 6722(c)(3)(A) is amended by striking filed in the flush matter at the end and inserting furnished. (2) Section 202(e) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking provided and inserting furnished. (e) Amendments relating to section 203 (1) Section 6109(i)(1)(B) is amended by striking Internal Revenue Service and inserting Internal Revenue Service, a community-based certified acceptance agent approved by the Secretary,. (2) Section 6109(i)(3) is amended— (A) in subparagraph (A)— (i) by inserting ending after the issuance of such number before the period at the end of the first sentence, and (ii) by striking on the last day of such third consecutive taxable year and inserting on the day after the due date for the return of tax for such third consecutive taxable year, and (B) by striking subparagraph (B)(ii) and inserting the following: (ii) if the individual does not file a return of tax (or is not included as a dependent on the return of tax of another taxpayer) for 3 consecutive taxable years at least one of which ends after December 18, 2015, the due date for the return of tax for such third consecutive taxable year. . (3) Section 203(f) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking The amendments and inserting Except to the extent provided in section 6109(i)(3) of the Internal Revenue Code of 1986, the amendments. (f) Amendments relating to section 204 Section 204(b) of the Protecting Americans from Tax Hikes Act of 2015 is amended— (1) by striking paragraph (2), and (2) by striking so much as precedes amendment made by this section and inserting the following: (b) Effective date.—The. (g) Amendments relating to section 205 (1) Section 24(e)(2) is amended by striking identifying number and inserting taxpayer identification number. (2) Section 205(c) of such Act is amended— (A) by striking paragraph (2), and (B) by striking so much as precedes shall apply to any return of tax and inserting the following: (c) Effective date.—The amendments made by this section. (h) Amendments relating to section 206 Section 206(b) of such Act is amended— (1) by striking Except as provided in paragraph (2), the amendment in paragraph (1) and inserting The amendment, and (2) by striking paragraph (2) and redesignating paragraph (3) as paragraph (2). (i) Amendment relating to section 209 Section 209(d)(2) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking amendment made by subsection (b) and inserting amendments made by subsections (b) and (c). (j) Amendments related to sections 102, 206, 207, 208, and 211 (1) Section 25A(b)(1) is amended— (A) in subparagraph (A) by striking $1,000 and inserting $2,000, and (B) in subparagraph (B)— (i) by striking 50 percent and inserting 25 percent, (ii) by striking $1,000 and inserting $2,000, and (iii) by striking the applicable limit and inserting $4,000. (2) Subparagraphs (A) and (C) of section 25A(b)(2) are amended by striking 2 in the heading and text of each subparagraph and inserting 4. (3) Section 25A(b)(4) is amended to read as follows: (4) Restrictions on taxpayers who improperly claimed American Opportunity Tax Credit in prior years (A) Taxpayers making prior fraudulent or reckless claims (i) In general No American Opportunity Tax Credit shall be allowed under this section for any taxable year in the disallowance period. (ii) Disallowance period For purposes of subparagraph (A), the disallowance period is— (I) the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer’s claim of the American Opportunity Tax Credit under this section was due to fraud, and (II) the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of the American Opportunity Tax Credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud). (B) Taxpayers making improper prior claims In the case of a taxpayer who is denied the American Opportunity Tax Credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no American Opportunity Tax Credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit. . (4) Section 25A(d) is amended to read as follows: (d) Limitations based on modified adjusted gross income (1) American Opportunity Tax Credit The American Opportunity Tax Credit (determined without regard to this paragraph) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit (as so determined) as— (A) the excess of— (i) the taxpayer’s modified adjusted gross income for such taxable year, over (ii) $80,000 ($160,000 in the case of a joint return), bears to (B) $10,000 ($20,000 in the case of a joint return). (2) Lifetime Learning Credit The Lifetime Learning Credit (determined without regard to this paragraph) shall be reduced (but not below zero) by the amount which bears the same ratio to such credit (as so determined) as— (A) the excess of— (i) the taxpayer’s modified adjusted gross income for such taxable year, over (ii) $40,000 ($80,000 in the case of a joint return), bears to (B) $10,000 ($20,000 in the case of a joint return). (3) Modified adjusted gross income For purposes of this subsection, the term modified adjusted gross income means the adjusted gross income of the taxpayer for the taxable year increased by any amount excluded from gross income under section 911, 931, or 933. . (5) Section 25A(f)(1) is amended by adding at the end the following new subparagraph: (D) Required course materials taken into account for American Opportunity Tax Credit For purposes of determining the American Opportunity Tax Credit, subparagraph (A) shall be applied by substituting tuition, fees, and course materials for tuition and fees. . (6) Section 25A(g)(1) is amended— (A) by striking No credit and inserting the following: (A) In general No credit , and (B) by adding at the end the following new subparagraph: (B) Additional identification requirements with respect to American Opportunity Tax Credit (i) Student The requirements of subparagraph (A) shall not be treated as met with respect to the American Opportunity Tax Credit unless the individual's taxpayer identification number was issued on or before the due date for filing the return of tax for the taxable year. (ii) Taxpayer No American Opportunity Tax Credit shall be allowed under this section if the taxpayer identification number of the taxpayer was issued after the due date for filing the return for the taxable year. (iii) Institution No American Opportunity Tax Credit shall be allowed under this section unless the taxpayer includes the employer identification number of any institution to which qualified tuition and related expenses were paid with respect to the individual. . (7) Section 25A(h) is amended to read as follows: (h) Inflation adjustment (1) In general In the case of a taxable year beginning after 2001, the $40,000 and $80,000 amounts in subsection (d)(2) shall each be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2000 for calendar year 1992 in subparagraph (B) thereof. (2) Rounding If any amount as adjusted under paragraph (1) is not a multiple of $1,000, such amount shall be rounded to the next lowest multiple of $1,000. . (8) Section 25A(i) is amended to read as follows: (i) Portion of American Opportunity Tax Credit made refundable 40 percent of so much of the credit allowed under subsection (a) as is attributable to the American Opportunity Tax Credit (determined after application of subsection (d) and without regard to this paragraph and section 26(a)) shall be treated as a credit allowable under subpart C (and not allowed under subsection (a)). The preceding sentence shall not apply to any taxpayer for any taxable year if such taxpayer is a child to whom subsection (g) of section 1 applies for such taxable year. . (9) The heading for section 25A is amended by striking Hope and inserting American Opportunity. (10) The item relating to section 25A in the table of contents for subpart A of part IV of subchapter A of chapter 1 is amended to read as follows: Sec. 25A. American Opportunity and Lifetime Learning credits. . (11) The heading for section 25A(b) is amended by striking Hope Scholarship Credit and inserting American Opportunity Tax Credit. (12) The heading for section 25A(b)(2) is amended by striking hope scholarship credit and inserting american opportunity tax credit. (13) The heading for section 25A(c)(2)(A) is amended by striking hope scholarship and inserting american opportunity tax credit. (14) Section 25A, as amended by the preceding provisions of this Act, is amended by striking Hope Scholarship Credit each place it appears in the text and inserting American Opportunity Tax Credit. (15) The heading for section 529(c)(3)(B)(v) is amended by striking hope and inserting american opportunity. (16) The heading for section 530(d)(2)(C) is amended by striking hope and inserting american opportunity. (17) Section 6211(b)(4)(A), as amended by this Act, is amended by striking subsection (i)(5) and inserting subsection (i). (18) Section 6213(g)(2)(Q) is amended to read as follows: (Q) an omission of information required by section 25A(b)(4)(B) or an entry on the return claiming the American Opportunity Tax Credit for a taxable year for which such credit is disallowed under section 25A(b)(4)(A). . (19) Section 207(b)(1) of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking the American opportunity tax credit under section 25A(i) of such Code and inserting the American Opportunity Tax Credit under section 25A of such Code. (k) Amendment relating to section 311 The last sentence of section 355(h)(2)(B) is amended by striking 80 percent both places it appears and inserting at least 80 percent. (l) Amendments relating to section 322 (1) Section 897(k)(2) is amended— (A) by striking so much of subparagraph (B) as precedes amounts realized by the qualified shareholder and inserting the following: (B) Exception In the case of a qualified shareholder with 1 or more applicable investors— (i) subparagraph (A)(i) shall not apply to the applicable percentage of the stock of the real estate investment trust held by the qualified shareholder, and (ii) the applicable percentage of the , and (B) by adding at the end the following new subparagraph: (F) Applicable percentage For purposes of subparagraph (B), the term applicable percentage means the percentage of the value of the interests (other than interests held solely as a creditor) in the qualified shareholder held by applicable investors. . (2) Section 897(k)(2)(E) is amended by striking and (C) and inserting and (D). (3) Section 897(k)(3)(B)(i) is amended by striking so much as precedes for a reduced rate of withholding and inserting the following: (i) which— (I) is eligible for benefits under the comprehensive income tax treaty described in subparagraph (A)(i)(I), but only if the dividends article of such treaty imposes conditions on the benefits allowable in the case of dividends paid by a real estate investment trust, and (II) is eligible under such treaty . (4) Section 897(k)(3)(B)(ii) is amended— (A) by inserting and at the end of subclause (II), and (B) by striking United States corporation in subclause (III) and inserting domestic corporation. (5) Section 322 of the Protecting Americans from Tax Hikes Act of 2015 is amended by striking subsections (b)(2) and (c)(3), and the Internal Revenue Code of 1986 shall be applied as if such subsections, and amendments made thereby, had never been enacted. (6) Section 322(c)(2) of such Act is amended by striking take effect on and inserting the following: apply with respect to testing periods (as defined in section 897(h)(4)(D) of the Internal Revenue Code of 1986) ending on or after. (m) Effective date The amendments made by this section shall take effect as if included in the provision of the Protecting Americans from Tax Hikes Act of 2015 to which they relate. 3. Amendment relating to Consolidated Appropriations Act, 2016 (a) Amendment relating to section 305 of division P Section 199(c)(3)(C)(i) is amended by striking under subsection (d)(9)(B) and inserting (as defined in subsection (d)(9)(B)). (b) Effective date The amendment made by this section shall take effect as if included in section 305 of division P of the Consolidated Appropriations Act, 2016. 4. Amendments relating to Fixing America’s Surface Transportation Act (a) Amendments relating to section 32101 Section 7345(e)(1) is amended— (1) by striking or the Tax Court and inserting , or against the Commissioner in the Tax Court,, and (2) by adding at the end the following: For purposes of the preceding sentence, the court first acquiring jurisdiction over such an action shall have sole jurisdiction.. (b) Effective date The amendments made by this section shall take effect as if included in section 32101 of the Fixing America’s Surface Transportation Act. 5. Amendments relating to Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (a) Amendment relating to section 2004 Section 6662(k) is amended to read as follows: (k) Inconsistent estate basis reporting For purposes of this section, there is an inconsistent estate basis if the adjusted basis of property (to which section 1014(f) applies) claimed on a return exceeds the amount that would have been so claimed if the basis of such property had been properly determined under such section. . (b) Amendments relating to section 2008 Section 9503(e)(2) is amended— (1) by striking per gallon in subparagraph (C) and inserting per energy equivalent of a gallon of diesel (as defined in section 4041(a)(2)(D)), and (2) by striking per gallon in subparagraph (D) and inserting per energy equivalent of a gallon of gasoline (as defined in section 4041(a)(2)(C)). (c) Effective date The amendments made by this section shall take effect as if included in the provision of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 to which they relate. 6. Amendments relating to Stephen Beck, Jr., ABLE Act of 2014 (a) Amendments relating to section 208 Section 208(h) of the Stephen Beck, Jr., ABLE Act of 2014 is amended— (1) by striking so much as precedes made by this section and inserting the following: (h) Effective date (1) In general Except as provided in paragraph (2), the amendments , (2) by inserting , and statements required to be furnished, after returns required to be filed, and (3) by adding at the end the following new paragraph: (2) Subsection (c) The amendment made by subsection (c) shall apply to returns or claims for refund filed after December 31, 2014. . (b) Effective date The amendments made by this section shall take effect as if included in section 208 of the Stephen Beck, Jr., ABLE Act of 2014. 7. Amendment relating to American Taxpayer Relief Act of 2012 (a) Amendment relating to section 104 Section 6211(b)(4)(A) is amended by striking subsection (i)(6) and inserting subsection (i)(5). (b) Effective date The amendment made by this section shall take effect as if included in section 104 of the American Taxpayer Relief Act of 2012. 8. Amendment relating to United States–Korea Free Trade Agreement Implementation Act (a) Amendment relating to section 501 Section 501(b) of the United States–Korea Free Trade Agreement Implementation Act is amended by striking returns required to be filed and inserting documents prepared. (b) Effective date The amendment made by this section shall take effect as if included in section 501 of the United States–Korea Free Trade Agreement Implementation Act. 9. Clerical corrections (a) Section 24(d) is amended by redesignating paragraph (5) as paragraph (3). (b) (1) Section 42(f)(5)(B)(ii)(I) is amended by striking (d)(6)(C) and inserting (d)(6)(B). (2) Section 42(k)(2)(B) is amended by striking (d)(6)(B) and inserting (d)(6)(C). (3) Section 42(d)(4)(C)(i) is amended by striking as defined in paragraph (5)(C) and inserting as defined in paragraph (5)(B)(ii). (4) Section 42(m)(1)(B)(ii)(III) is amended by striking as defined in subsection (d)(5)(C) and inserting as defined in subsection (d)(5)(B)(ii). (c) Section 48(a)(6)(B) is amended by striking property energy property and inserting energy property. (d) Section 58(a)(2)(A) is amended by striking 461(j) and inserting 461(k). (e) Section 139E(c)(3) is amended by striking 2013 and inserting 2014. (f) Section 168(e)(3)(C)(i) is amended by striking and. (g) Section 199 is amended by striking so much of subsection (a) as precedes There shall be allowed and inserting (a) Allowance of deduction.—. (h) The second sentence of section 355(h)(2)(B) is amended by striking of assets. (i) (1) Section 461 is amended by redesignating the second subsection (j) (relating to farming syndicate defined) as subsection (k). (2) Section 461(i)(4) is amended by striking subsection (j) and inserting subsection (k). (j) Section 464(d)(2)(B)(iii) is amended by striking subsection (c)(2)(E) and inserting section 461(k)(2)(E). (k) Section 852(a)(1)(B) is amended by striking 265, and inserting 265 and. (l) Subparagraphs (A) and (B) of section 856(c)(7) are each amended by striking paragraph (4)(B)(iii) and inserting paragraph (4)(B)(iv). (m) Paragraphs (1), (3), (4), and (5) of section 856(m) are each amended by striking subsection (c)(4)(B)(iii) and inserting subsection (c)(4)(B)(iv). (n) Section 864(d)(8) is amended by striking section 956(b)(3) and inserting section 956(c)(3). (o) The heading for section 897(k)(2) is amended by striking usrpi and inserting united states real property interest. (p) Subparagraphs (B) and (C) of section 1256(e)(3) are each amended by striking section 464(e)(2) and inserting section 461(k)(4). (q) Section 1400F(d) is amended by striking for December 31, 2014. and inserting for December 31, 2016.. (r) (1) Subsections (e) and (i) of section 7422 and sections 3121(b)(5)(E), 6110(j)(1)(B), 7428(a), and 7430(c)(6) are each amended by striking United States Claims Court and inserting United States Court of Federal Claims. (2) Subsections (a), (b), and (c)(1)(C)(iii) of section 7428 are each amended by striking Claims Court and inserting Court of Federal Claims. (3) The heading for section 4961(c)(1) is amended by striking united states claims court and inserting united states court of federal claims. (s) Section 4980I(b)(3)(C)(v) is amended by striking for for and inserting for. (t) Subchapter C of chapter 63 is amended— (1) by striking Part 1—Procedure and inserting Part III—Procedure, and (2) by striking Part 2—Definitions and Special Rules and inserting Part IV—Definitions and Special Rules. (u) Section 32103(a) of the Fixing America’s Surface Transportation Act is amended by striking section 52106 and inserting section 32102. (v) Section 6213(g)(2)(P) is amended— (1) by striking section 24(h)(2) and inserting section 24(g)(2), and (2) by striking subsection (h)(1) and inserting subsection (g)(1). (w) Section 6235(a) is amended by striking subpart and inserting subchapter. (x) Section 6501(m) is amended by striking any election and all that follows through (or any and inserting the following: any election under section 30B(h)(9), 30C(e)(4), 30D(e)(4), 35(g)(11), 40(f), 43, 45B, 45C(d)(4), 45H(g), or 51(j) (or any. (y) Each of the following sections are amended by inserting an amount equal to after increased by and by inserting for the calendar year after section 1(f)(3): (1) Section 6651(i). (2) Section 6652(c)(7)(A). (3) Section 6695(h)(1). (4) Section 6698(e)(1). (5) Section 6699(e)(1). (6) Section 6721(f)(1). (7) Section 6722(f)(1). (z) The heading for section 6676(c) is amended by striking reasonable basis and inserting reasonable cause. (aa) Section 6700(a) is amended by striking the $1,000 and inserting $1,000. (bb) Section 9503(c)(5) is amended by striking and before October 1, 2011,. (cc) Section 302 of division P of the Consolidated Appropriations Act, 2016 is amended— (1) in subsection (a), by inserting of the Internal Revenue Code of 1986 after section 48(a)(5)(C), and (2) in subsection (b), by inserting of such Code after section 48(a). 10. Deadwood-related provisions (a) Section 25A(c)(1) is amended by striking ($5,000 in the case of taxable years beginning before January 1, 2003). (b) Section 56(d)(1)(A)(ii)(I) is amended by inserting (as in effect before its repeal by the Tax Increase Prevention Act of 2014) after section 172(b)(1)(H). (c) Section 139(c)(2) is amended by striking section 165(h)(3)(C)(i) and inserting section 165(i)(5)(A). (d) Section 163(d)(4) is amended by striking subparagraph (E). (e) Section 530(b)(3) is amended— (1) by striking (as defined in section 170(e)(6)(F)(i)) in subparagraph (A)(iii), and (2) by adding at the end the following new subparagraph: (C) Computer technology or equipment The term computer technology or equipment means computer software (as defined by section 197(e)(3)(B)), computer or peripheral equipment (as defined by section 168(i)(2)(B)), and fiber optic cable related to computer use. . (f) Section 810(b) is amended by striking paragraph (4). (g) Section 856(m) is amended by striking paragraph (6). (h) (1) Section 1252(a)(1) is amended by striking during a taxable year beginning. (2) Section 1252(a)(1)(A) is amended— (A) by striking sections and inserting section, and (B) by striking and 182 and all that follows through Tax Reform Act of 1986). (3) Section 1252(a)(2) is amended— (A) by striking sections and inserting section, and (B) by striking or 182 and all that follows and inserting a period. (i) Section 7448(d) is amended by striking at 4 percent per annum to December 31, 1947, and 3 percent per annum thereafter and inserting at 3 percent per annum.