H.R. 2796 — Introduced in House

I 117th CONGRESS 1st Session H. R. 2796 IN THE HOUSE OF REPRESENTATIVES April 22, 2021Mr. Panetta (for himself and Mr. Arrington) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To amend section 414 of the Internal Revenue Code of 1986 to update the family attribution rule. 1. Short title This Act may be cited as the Family Attribution Modernization Act. 2. Reform of family attribution rule (a) In general Section 414 of the Internal Revenue Code of 1986 is amended— (1) in subsection (b)— (A) by striking For purposes of and inserting the following: (1) In general For purposes of , and (B) by adding at the end the following new paragraphs: (2) Special rules for applying family attribution For purposes of applying the attribution rules under section 1563 with respect to paragraph (1), the following rules apply: (A) Community property laws shall be disregarded for purposes of determining ownership. (B) Any ownership that is not attributed to a spouse by reason of section 1563(e)(5) shall also not be attributed to the minor children of the owner and the attribution rule in paragraph (6)(A) shall not apply to such ownership. (3) Plan shall not fail to be treated as satisfying this section If application of paragraph (2) causes two or more entities to be a controlled group, or an affiliated service group, or to no longer be in a controlled group or an affiliated service group, such change shall be treated as a transaction to which section 410(b)(6)(C) applies. , and (2) in subsection (m)(6)(B), by striking apply and inserting apply, except that community property laws shall be disregarded for purposes of determining ownership. (b) Effective date The amendments made by this section shall apply to plan years beginning on or after the date of the enactment of this section.