,i  #aae? ,,congress  #a/ ,session  ,h4 
,r4 #dahi  ,,9 ,,! ,,h\se ,,(           
,,repres5tatives  ,octob] #ca1 #bjag    
,mr4 ,kelly ( ,p5nsylvania introduc$ !  
foll[+ bill2 :i* 0 ref]r$ to !          
,committee on ,ways & ,means  ,a ,,bill 
,to r$uce ! disadvantages ( individual  
retirem5t arrangem5ts ) respect to      
employ]-sponsor$ retirem5t plans by     
help+ taxpay]s comply ) laws affect+    
individual retirem5t arrangem5ts1 by    
provid+ = r$uc$ p5alties "u ! ,int]nal  
,rev5ue ,code ( #aihf = c]ta9           
self-corrections ) respect to su* laws1 
& = o!r purposes4  #a4 ,%ort title ,?is 
,act may be cit$ z ! ,,ira ,pres]vation 
,act ( #bjag4  #b4 ,education & outrea* 
7a7 ,in=mation made available ,!        
,secret>y %all make available to !      
public ! foll[+ in=mation3  7#a7 ,an    
ov]view ( ! laws & regulations relat$ to
 individual retirem5t arrangem5ts1      
includ+-- 7,a7 limits on contributions2 
7,b7 limits on d$uctions =              
contributions2  7,c7 rollov]s2  7,d7    

m9imum requir$ di/ributions2  7,e7      
non-exempt prohibit$ transactions2 &    
7,f7 tax consequ5ces = e>ly             
di/ributions4  7#b7 ,examples ( common  
errors by taxpay]s ) respect to ! laws &
 regulations describ$ 9 p>agraph 7#a7 & 
in/ructions on h[ to avoid su* errors4  
7b7 ,t>get$ advance notices ,bas$ on !  
in=mation on common errors id5tifi$ "u  
subsection 7a77#b71 ! ,secret>y %all    
id5tify critical failure po9ts & cause  
notices to be issu$ to individual       
taxpay]s 9 advance ( _! rea*+ su*       
critical failure po9ts1 ) advice on h[  
to avoid su* failures4  7c7 ,s(t notice 
program  7#a7 ,9 g5]al ,! ,secret>y     
%all1 at su* "t z ! ,secret>y consid]s  
appropriate1 cause a notice "u ?is      
subsection to be issu$ to a taxpay] if !
 ,secret>y detects a mat]ial inconsi/5cy
 betwe5 or among any tax returns or     
reports fil$ "u ! ,int]nal ,rev5ue ,code
 ( #aihf1 includ+ an individual tax     
return & a ?ird-p>ty in=mation return1 t
 c\ld repres5t tax liability incurr$ by 

! taxpay] because (--  7,a7 an excess   
contribution to an individual retirem5t 
arrangem5t z describ$ 9 section #digc ( 
! ,int]nal ,rev5ue ,code ( #aihf2  7,b7 
an excess accumulation 9 an individual  
retirem5t arrangem5t z describ$ 9       
section #digd ( su* ,code2 or  7,c7 any 
o!r error associat$ ) an individual     
retirem5t arrangem5t t ! ,secret>y has !
 capability to detect automatically     
because ( inconsi/5cies 9 returns fil$  
or reports made "u su* ,code4  7#b7     
,exceptions ,! ,secret>y is n requir$ to
 issue a notice "u p>agraph 7#a7 )      
respect to an individual retirem5t      
arrangem5t 9 any case 9 :i* !           
,secret>y--  7,a7 int5ds to initiate an 
audit ( ! individual retirem5t          
arrangem5t2  7,b7 has reason to believe 
!re is no out/&+ tax liability          
attributable to an excess contribution1 
excess accumulation1 or o!r error       
describ$ 9 subp>agraph 7,a71 7,b71 or   
7,c7 ( p>agraph 7#a72 or  7,c7 has o!r  
good cause consi/5t ) ! purposes ( ?is  

,act4  7#c7 ,cont5t ,a notice issu$ "u  
p>agraph 7#a7 to a taxpay] ) respect to 
an individual retirem5t arrangem5t %all 
include--  7,a7 an explanation ( taxes t
 c\ld be ow$1 z ( ! date ( ! notice1    
because ( an excess contribution1 excess
 accumulation1 or o!r error describ$ 9  
subp>agraph 7,a71 7,b71 or 7,c7 (       
p>agraph 7#a71 includ+1 if applicable1  
an explanation ( ! r$uc$ rates ( tax    
available "u section #digc7;i7 or       
#digd7;e71 z ! case may be1 ( ! ,int]nal
 ,rev5ue ,code ( #aihf = volunt>y       
correction ( an excess contribution or  
excess accumulation describ$ 9          
subp>agraph 7,a7 or 7,b7 ( p>agraph 7#a7
 if volunt>y correction is made )9 !    
correction w9d[ applicable "u section   
#digc7;i7 or #digd7;e71 z ! case may be1
 ( su* ,code2  7,b7 a /atem5t t any     
failure to remit any taxes ow$ may      
result 9 an audit2  7,c7 9 ! case ( an  
excess contribution or excess           
accumulation describ$ 9 subp>agraph 7,a7
 or 7,b7 ( p>agraph 7#a71 an explanation

 ( taxes t c\ld be ow$ because ( su*    
excess contribution or excess           
accumulation1 if volunt>y correction is 
n made )9 ! correction w9d[ applicable  
"u section #digc7;i7 or #digd7;e71 z !  
case may be1 ( ! ,int]nal ,rev5ue ,code 
( #aihf2 &  7,d7 a copy ( ! applicable  
=m to be us$ by ! taxpay] to remit taxes
 ow$ ) respect to ! individual retirem5t
 arrangem5t because ( ! pot5tial excess 
contribution1 excess accumulation1 or   
o!r error describ$ 9 ! notice4  7#d7    
,coord9ation ) self-correction proc$ures
 ,a notice issu$ "u ?is p>agraph may n  
be consid]$ z initiat+ an audit or      
o!rwise dem&+ paym5t = purposes (       
section #digc7;i7 or #digd7;e7 ( !      
,int]nal ,rev5ue ,code ( #aihf4  #c4    
,r$uction ( excise taxes = volunt>y     
correction ( common ,,ira errors  7a7   
,r$uction 9 excise tax on excess        
contributions ,section #digc ( !        
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by add+ at ! end ! foll[+ new           
subsection3  7i7 ,r$uction ( tax 9 c]ta9

 cases  7#a7 ,r$uction ,9 ! case ( a    
taxpay] :o-- 7,a7 corrects1 dur+ !      
correction w9d[1 an excess contribution 
t 0 made to an individual retirem5t     
arrangem5t & t result$ 9 imposition ( a 
tax "u p>agraph 7#a7 or 7#c7 (          
subsection 7a71 &  7,b7 submits a       
return1 dur+ ! correction w9d[1 reflect+
 su* tax 7z modifi$ by ?is subsection71 
! fir/ & second s5t5ces ( subsection 7a7
 %all be appli$ by sub/itut+ #c p]c5t = 
#f p]c5t ea* place x appe>s4  7#b7      
,correction w9d[ def9$ ,= purposes ( ?is
 subsection1 ! t]m correction w9d[ means
 ! p]iod beg9n+ on ! date on :i* ! tax  
"u subsection 7a7 is impos$ ) respect to
 an excess contribution1 & end+ on !    
e>li] (--  7,a7 ! date on :i* !         
,secret>y initiates an audit1 or o!rwise
 dem&s paym5t1 ) respect to ! excess    
contribution1 or  7,b7 ! la/ day ( !    
second tax ye> t beg9s aft] ! end ( !   
tax ye> 9 :i* ! tax "u subsection 7a7 is
 impos$4  4  7b7 ,r$uction 9 excise tax 
on failures ,to take requir$ m9imum     

di/ributions  7#a7 ,9 g5]al ,section    
#digd ( ! ,int]nal ,rev5ue ,code ( #aihf
 is am5d$ by add+ at ! end ! foll[+ new 
subsection3  7e7 ,r$uction ( tax 9 c]ta9
 cases  7#a7 ,r$uction ,9 ! case ( a    
taxpay] :o-- 7,a7 corrects1 dur+ !      
correction w9d[1 a %ortfall (           
di/ributions f an individual retirem5t  
arrangem5t t result$ 9 imposition ( a   
tax "u subsection 7a71 &  7,b7 submits a
 return1 dur+ ! correction w9d[1        
reflect+ su* tax 7z modifi$ by ?is      
subsection71  ! fir/ s5t5ce ( subsection
 7a7 %all be appli$ by sub/itut+ #e     
p]c5t = #ej p]c5t4  7#b7 ,correction    
w9d[ def9$ ,= purposes ( ?is subsection1
 ! t]m correction w9d[ means ! p]iod (  
"t beg9n+ on ! date on :i* ! tax "u     
subsection 7a7 is impos$ ) respect to a 
%ortfall ( di/ributions f an individual 
retirem5t arrangem5t1 & end+ on ! e>li] 
(--  7,a7 ! date on :i* ! ,secret>y     
initiates an audit1 or o!rwise dem&s    
paym5t1 ) respect to ! %ortfall (       
di/ributions1 or  7,b7 ! la/ day ( !    

second tax ye> t beg9s aft] ! end ( !   
tax ye> 9 :i* ! tax "u subsection 7a7 is
 impos$4  4  7#b7 ,coord9ation ) waiv]  
provisions  7,a7 ,9 g5]al ,subsection   
7d7 ( section #digd ( ! ,int]nal ,rev5ue
 ,code ( #aihf is am5d$-- 7i7 by        
r$esignat+ p>agraphs 7#a7 & 7#b7 z      
subp>agraphs 7,a7 & 7,b71 respectively2 
7ii7 by /rik+ ,if ! taxpay] & ins]t+3   
7#a7 ,waiv] ,subject to p>agraph 7#b71  
if ! taxpay]  2 &  7iii7 by add+ at !   
end ! foll[+3  7#b7 ,exception ,!       
,secret>y may n waive ! tax impos$ by   
subsection 7a7 ) respect to an          
individual retirem5t arrangem5t4  4     
7,b7 ,au?ority to compromise ,! am5dm5ts
 made by subp>agraph 7,a7 %all n limit !
 au?ority ( ! ,secret>y ( ! ,treasury "u
 section #gaba or any o!r provision ( ! 
,int]nal ,rev5ue ,code ( #aihf to       
compromise ! am\nt ( any tax due "u     
section #digd ( su* ,code1 except t1 9  
det]m9+ ! am\nt ( any su* compromise1 ! 
,secret>y may take into acc\nt !        
availability1 "u section #digd7;e7 ( su*

 ,code1 ( volunt>y correction dur+ !    
correction w9d[ 7z def9$ 9 section      
#digd7;e77#b7 ( su* ,code74  #d4        
,h>monization ( treatm5t ( ,i,r,as )    
employ] plans  7a7 ,elim9ation (        
additional tax on c]ta9 di/ributions    
,subp>agraph 7,a7 ( section #gb7t77#b7 (
 ! ,int]nal ,rev5ue ,code ( #aihf is    
am5d$-- 7#a7 by /rik+ or at ! end (     
clause 7vii72  7#b7 by /rik+ ! p]iod at 
! end ( clause 7viii7 & ins]t+ 1 or2 &  
7#c7 by add+ at ! end ! foll[+ new      
clause3  7ix7 attributable to )drawal ( 
int]e/ or o!r income e>n$ on excess     
contributions to an individual retirem5t
 arrangem5t4  4  7b7 ,repeal ( tax      
disqualification p5alty  7#a7 ,9 g5]al  
,p>agraph 7#b7 ( subsection 7e7 (       
section #djh ( ! ,int]nal ,rev5ue ,code 
( #aihf is repeal$4  7#b7 ,con=m+       
am5dm5ts  7,a7 ,section #djh7;e77#a7 (  
su* ,code is am5d$ by /rik+ 7#b7 or4    
7,b7 ,sections #bbj7;e77#b71            
#bbc7;e77#b71 & #ecj7;e7 ( su* ,code are
 am5d$ by /rik+ p>agraphs 7#b7 & 7#d7 ( 

section #djh7;e7 ea* place x appe>s &   
ins]t+ p>agraph 7#d7 ( section #djh7;e74
  7,c7 ,section #dige7;c77#c7 ( su*     
,code is am5d$ by /rik+ ! acc\nt ceases 
to be an individual retirem5t acc\nt by 
reason ( ! application ( section        
#djh7;e77#b77;,a7 or if4  7c7 ,/atute ( 
limitations ,subsection 7l7 ( section   
#feja ( ! ,int]nal ,rev5ue ,code ( #aihf
 is am5d$-- 7#a7 9 p>agraph 7#a71 by    
ins]t+ 7o!r ?an = individual retirem5t  
arrangem5ts7 aft] section #dige2 &  7#b7
 by add+ at ! end ! foll[+ new p>agraph3
  7#d7 ,individual retirem5t arrangem5ts
 ,= purposes ( any tax impos$ by section
 #digc1 #digd1 or #dige 9 connection )  
an individual retirem5t arrangem5t1 !   
return ref]r$ to 9 ?is section %all be !
 income tax return fil$ by ! p]son on   
:om ! tax "u su* section is impos$ = !  
ye> 9 :i* ! act 7or failure to act7 giv+
 rise to su* liability = su* tax        
occurr$4 ,9 ! case ( a p]son :o is n    
requir$ to file an income tax return = !
 ye> 9 :i* ! act 7or failure to act7    

giv+ rise to su* liability = su* tax    
occurr$--  7,a7 ! return ref]r$ to 9 ?is
 section %all be ! income tax return t  
su* p]son w\ld h be5 requir$ to file b =
 ! fact t su* p]son 0 n requir$ to file 
su* return1 &  7,b7 ! #c-ye> p]iod      
ref]r$ to 9 subsection 7a7 ) respect to 
! return %all be deem$ to beg9 on ! date
 by :i* ! return w\ld h be5 requir$ to  
be fil$ 7exclud+ any ext5sion !re(74  4 
#e4 ,individual retirem5t arrangem5t    
def9$  7a7 ,9 g5]al ,= purposes ( ?is   
,act1 ! t]m individual retirem5t        
arrangem5t means an individual retirem5t
 acc\nt1 an individual retirem5t        
annuity1 & a ,ro? ,,ira describ$ 9      
sections #djh7;a71 #djh7;b71 & #djh;,a1 
respectively1 ( ! ,int]nal ,rev5ue ,code
 ( #aihf4  7b7 ,int]nal ,rev5ue ,code   
,section #djh ( ! ,int]nal ,rev5ue ,code
 ( #aihf is am5d$-- 7#a7 by r$esignat+  
subsection 7r7 z subsection 7s72 &  7#b7
 by ins]t+ aft] subsection 7q7 ! foll[+ 
new subsection3  7r7 ,individual        
retirem5t arrangem5t def9$ ,= purposes (

 ?is section & sections #gb7t71 #digc1  
#digd1 & #feja7l71 ! t]m individual     
retirem5t arrangem5t means an individual
 retirem5t acc\nt describ$ 9 section    
#djh7;a71 an individual retirem5t       
annuity describ$ 9 section #djh7;b71 & a
 ,ro? ,,ira describ$ 9 section #djh;,a4 
4  #f4 ,effective date  7a7 ,9 g5]al    
,subject to subsections 7b7 & 7c71 ?is  
,act & ! am5dm5ts made by ?is ,act %all 
take effect on ! date ( ! enactm5t ( ?is
 ,act4  7b7 ,transition provisions  7#a7
 ,reque/s = waiv]s  7,a7 ,9 g5]al       
,not)/&+ ! am5dm5ts to section #digd7;d7
 ( ! ,int]nal ,rev5ue ,code ( #aihf made
 by section #c7;b77#b7 ( ?is ,act1 a    
taxpay] may1 at any "t be=e or dur+ !   
transition p]iod1 file a writt5 reque/ =
 a waiv] "u section #digd7;d7 ( su*     
,code1 z 9 effect on ! day be=e ! date (
 ! enactm5t ( ?is ,act4 ,! ,secret>y ( !
 ,treasury %all consid] any su* reque/ z
 if ! am5dm5ts made by section          
#c7;b77#b7 _h n be5 made4  7,b7         
,transition p]iod def9$ ,= purposes (   

?is p>agraph1 ! t]m transition p]iod    
means ! p]iod beg9n+ on ! date ( !      
enactm5t ( ?is ,act & end+ on ! date t  
is #a ye> aft] su* date ( enactm5t4     
7#b7 ,applicability to c]ta9 prior acts 
7,a7 ,9 g5]al ,except z provid$ 9       
p>agraph 7#a71 ! am5dm5ts made by ?is   
,act %all apply to any det]m9ation ( or 
affect+ liability = taxes1 int]e/1 or   
p5alties t is made on or aft] ! date ( !
 enactm5t ( ?is ,act1 ev5 if ! conduct  
^u :i* ! det]m9ation is bas$ occurr$    
be=e su* date ( enactm5t4  7,b7         
,calculation ( correction w9d[ 9 c]ta9  
cases ,9 ! case ( an error t w\ld h be5 
eligible = correction "u section        
#digc7;i7 or #digd7;e7 ( ! ,int]nal     
,rev5ue ,code ( #aihf if tax _h n be5   
impos$ "u #digc7;a7 or #digd7;a71 z !   
case may be1 ( su* ,code be=e ! date ( !
 enactm5t ( ?is ,act1 ! correction w9d[ 
ref]r$ to 9 sections #digc7;i7 &        
#digd7;e7 ( su* ,code %all be ! p]iod   
beg9n+ on ! date on :i* su* tax 0 impos$
 & end+ on ! e>li] (--  7i7 ! date on   

:i* ! ,secret>y ( ! ,treasury initiates 
an audit or o!rwise dem&s paym5t )      
respect to ! conduct describ$ 9 section 
#digc7;a7 or #digd7;a71 z ! case may be1
 ( su* ,code2 or  7ii7 ! la/ day ( !    
second tax ye> t beg9s aft] ! tax ye> 9 
:i* ! date ( ! enactm5t ( ?is ,act      
occurs4  7c7 ,implem5tation ,section #b 
%all be implem5t$ z soon z reasonably   
practicable aft] ! enactm5t ( ?is ,act b
 9 no case lat] ?an ! date t is #a ye>  
aft] ! date ( ! enactm5t ( ?is ,act4