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Small Business Jobs Act of 2010 (P.L. 111-240)

SEP. 27, 2010

Small Business Jobs Act of 2010 (P.L. 111-240)

DATED SEP. 27, 2010

DOCUMENT ATTRIBUTES

Jurisdictions
United States
Language
English

H.R. 5297, Enrolled Bill

One Hundred Eleventh Congress

of the

United States of America

AT THE SECOND SESSION

An Act

To create the Small Business Lending Fund Program to direct the Secretary of the Treasury to

make capital investments in eligible institutions in order to increase the availability of credit for small

businesses, to amend the Internal Revenue Code of 1986 to provide tax incentives for small business

job creation, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "Small Business Jobs Act of 2010".

* * *

TITLE II--TAX PROVISIONS

Sec. 2001. Short title.

Subtitle A--Small Business Relief

PART I--Providing Access to Capital

Sec. 2011. Temporary exclusion of 100 percent of gain on certain small business stock.

Sec. 2012. General business credits of eligible small businesses for 2010 carried back 5 years.

Sec. 2013. General business credits of eligible small businesses in 2010 not subject to alternative minimum tax.

Sec. 2014. Temporary reduction in recognition period for built-in gains tax.

PART II--Encouraging Investment

Sec. 2021. Increased expensing limitations for 2010 and 2011; certain real property treated as section 179 property.

Sec. 2022. Additional first-year depreciation for 50 percent of the basis of certain qualified property.

Sec. 2023. Special rule for long-term contract accounting.

PART III--Promoting Entrepreneurship

Sec. 2031. Increase in amount allowed as deduction for start-up expenditures in 2010.

Sec. 2032. Authorization of appropriations for the United States Trade Representative to develop market access opportunities for United States small.--and medium-sized businesses and to enforce trade agreements.

PART IV--Promoting Small Business Fairness

Sec. 2041. Limitation on penalty for failure to disclose reportable transactions based on resulting tax benefits.

Sec. 2042. Deduction for health insurance costs in computing self-employment taxes in 2010.

Sec. 2043. Removal of cellular telephones and similar telecommunications equipment from listed property.

Subtitle B--Revenue Provisions

PART I--Reducing the Tax Gap

Sec. 2101. Information reporting for rental property expense payments.

Sec. 2102. Increase in information return penalties.

Sec. 2103. Report on tax shelter penalties and certain other enforcement actions.

Sec. 2104. Application of continuous levy to tax liabilities of certain Federal contractors.

PART II--Promoting Retirement Preparation

Sec. 2111. Participants in government section 457 plans allowed to treat elective deferrals as Roth contributions.

Sec. 2112. Rollovers from elective deferral plans to designated Roth accounts.

Sec. 2113. Special rules for annuities received from only a portion of a contract.

PART III--Closing Unintended Loopholes

Sec. 2121. Crude tall oil ineligible for cellulosic biofuel producer credit.

Sec. 2122. Source rules for income on guarantees.

PART IV--Time for Payment of Corporate Estimated Taxes

Sec. 2131. Time for payment of corporate estimated taxes.

TITLE II--TAX PROVISIONS

SEC. 2001. SHORT TITLE.

This title may be cited as the "Creating Small Business Jobs Act of 2010".

Subtitle A--Small Business Relief

PART I--PROVIDING ACCESS TO CAPITAL

SEC. 2011. TEMPORARY EXCLUSION OF 100 PERCENT OF GAIN ON CERTAIN SMALL BUSINESS STOCK.

(a) In General.--Subsection (a) of section 1202 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(4) 100 PERCENT EXCLUSION FOR STOCK ACQUIRED DURING CERTAIN PERIODS IN 2010.--In the case of qualified small business stock acquired after the date of the enactment of the Creating Small Business Jobs Act of 2010 and before January 1, 2011--

"(A) paragraph (1) shall be applied by substituting "100 percent" for "50 percent',

"(B) paragraph (2) shall not apply, and

"(C) paragraph (7) of section 57(a) shall not apply.”.

(b) Conforming Amendment.--Paragraph (3) of section 1202(a) of the Internal Revenue Code of 1986 is amended--

(1) by inserting "CERTAIN PERIODS IN" before "2010" in the heading, and

(2) by striking "before January 1, 2011" and inserting "on or before the date of the enactment of the Creating Small Business Jobs Act of 2010'.

(c) Effective Date.--The amendments made by this section shall apply to stock acquired after the date of the enactment of this Act.

Sec. 2012. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL BUSINESSES FOR 2010 CARRIED BACK 5 YEARS.

(a) In General.--Section 39(a) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(4) 5-year CARRYBACK FOR ELIGIBLE SMALL BUSINESS CREDITS.--

"(A) IN GENERAL.--Notwithstanding subsection (d), in the case of eligible small business credits determined in the first taxable year of the taxpayer beginning in 2010--

"(i) paragraph (1) shall be applied by substituting ‘each of the 5 taxable years’ for ‘the taxable year’ in subparagraph (A) thereof, and

"(ii) paragraph (2) shall be applied--

"(I) by substituting ‘25 taxable years’ for ‘21 taxable years’ in subparagraph (A) thereof, and

"(II) by substituting ‘24 taxable years’ for ‘20 taxable years’ in subparagraph (B) thereof.

"(B) ELIGIBLE SMALL BUSINESS CREDITS.--For purposes of this subsection, the term "eligible small business credits" has the meaning given such term by section 38(c)(5)(B).'.

(b) Conforming Amendment.--Section 39(a)(3)(A) of the Internal Revenue Code of 1986 is amended by inserting "or the eligible small business credits" after "credit)'.

(c) Effective Date.--The amendments made by this section shall apply to credits determined in taxable years beginning after December 31, 2009.

SEC. 2013. GENERAL BUSINESS CREDITS OF ELIGIBLE SMALL BUSINESSES IN 2010 NOT SUBJECT TO ALTERNATIVE MINIMUM TAX.

(a) In General.--Section 38(c) of the Internal Revenue Code of 1986 is amended by redesignating paragraph (5) as paragraph (6) and by inserting after paragraph (4) the following new paragraph:

"(5) SPECIAL RULES FOR ELIGIBLE SMALL BUSINESS CREDITS IN 2010.--

"(A) IN GENERAL.--In the case of eligible small business credits determined in taxable years beginning in 2010--

"(i) this section and section 39 shall be applied separately with respect to such credits, and

"(ii) in applying paragraph (1) to such credits--

"(I) the tentative minimum tax shall be treated as being zero, and

"(II) the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the eligible small business credits).

"(B) ELIGIBLE SMALL BUSINESS CREDITS.--For purposes of this subsection, the term "eligible small business credits" means the sum of the credits listed in subsection (b) which are determined for the taxable year with respect to an eligible small business. Such credits shall not be taken into account under paragraph (2), (3), or (4).

"(C) ELIGIBLE SMALL BUSINESS.--For purposes of this subsection, the term "eligible small business" means, with respect to any taxable year--

"(i) a corporation the stock of which is not publicly traded,

"(ii) a partnership, or

"(iii) a sole proprietorship,

if the average annual gross receipts of such corporation, partnership, or sole proprietorship for the 3-taxable-year period preceding such taxable year does not exceed $50,000,000. For purposes of applying the test under the preceding sentence, rules similar to the rules of paragraphs (2) and (3) of section 448(c) shall apply.

"(D) TREATMENT OF PARTNERS AND S CORPORATION SHAREHOLDERS.--Credits determined with respect to a partnership or S corporation shall not be treated as eligible small business credits by any partner or shareholder unless such partner or shareholder meets the gross receipts test under subparagraph (C) for the taxable year in which such credits are treated as current year business credits.'.

(b) Technical Amendment.--Section 55(e)(5) of the Internal Revenue Code of 1986 is amended by striking “38(c)(3)(B)” and inserting "38(c)(6)(B)”.

(1) Subclause (II) of section 38(c)(2)(A)(ii) of the Internal Revenue Code of 1986 is amended by inserting "the eligible small business credits," after "the New York Liberty Zone business employee credit,'.

(2) Subclause (II) of section 38(c)(3)(A)(ii) of such Code is amended by inserting ", the eligible small business credits," after "the New York Liberty Zone business employee credit'.

(3) Subclause (II) of section 38(c)(4)(A)(ii) of such Code is amended by inserting "the eligible small business credits and" before "the specified credits'.

(d) Effective Date.--The amendments made by subsection (a) shall apply to credits determined in taxable years beginning after December 31, 2009, and to carrybacks of such credits.

SEC. 2014. TEMPORARY REDUCTION IN RECOGNITION PERIOD FOR BUILT-IN GAINS TAX.

(a) In General.--Subparagraph (B) of section 1374(d)(7) of the Internal Revenue Code of 1986 is amended to read as follows:

"(B) SPECIAL RULES FOR 2009, 2010, AND 2011.--No tax shall be imposed on the net recognized built-in gain of an S corporation--

"(i) in the case of any taxable year beginning in 2009 or 2010, if the 7th taxable year in the recognition period preceded such taxable year, or

"(ii) in the case of any taxable year beginning in 2011, if the 5th year in the recognition period preceded such taxable year.

The preceding sentence shall be applied separately with respect to any asset to which paragraph (8) applies.'.

(b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2010.

PART II--ENCOURAGING INVESTMENT

SEC. 2021. INCREASED EXPENSING LIMITATIONS FOR 2010 AND 2011; CERTAIN REAL PROPERTY TREATED AS SECTION 179 PROPERTY.

(a) Increased Limitations.--Subsection (b) of section 179 of the Internal Revenue Code of 1986 is amended--

(1) by striking "shall not exceed" and all that follows in paragraph (1) and inserting "shall not exceed--

"(A) $250,000 in the case of taxable years beginning after 2007 and before 2010,

"(B) $500,000 in the case of taxable years beginning in 2010 or 2011, and

"(C) $25,000 in the case of taxable years beginning after 2011.', and

(2) by striking "exceeds" and all that follows in paragraph (2) and inserting "exceeds--

"(A) $800,000 in the case of taxable years beginning after 2007 and before 2010,

"(B) $2,000,000 in the case of taxable years beginning in 2010 or 2011, and

"(C) $200,000 in the case of taxable years beginning after 2011.'.

(b) Inclusion of Certain Real Property.--Section 179 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

"(f) Special Rules for Qualified Real Property.--

"(1) IN GENERAL.--If a taxpayer elects the application of this subsection for any taxable year beginning in 2010 or 2011, the term "section 179 property" shall include any qualified real property which is--

"(A) of a character subject to an allowance for depreciation,

"(B) acquired by purchase for use in the active conduct of a trade or business, and

"(C) not described in the last sentence of subsection (d)(1).

"(2) QUALIFIED REAL PROPERTY.--For purposes of this subsection, the term "qualified real property" means--

"(A) qualified leasehold improvement property described in section 168(e)(6),

"(B) qualified restaurant property described in section 168(e)(7) (without regard to the dates specified in subparagraph (A)(i) thereof), and

"(C) qualified retail improvement property described in section 168(e)(8) (without regard to subparagraph (E) thereof).

"(3) LIMITATION.--For purposes of applying the limitation under subsection (b)(1)(B), not more than $250,000 of the aggregate cost which is taken into account under subsection (a) for any taxable year may be attributable to qualified real property.

"(4) CARRYOVER LIMITATION.--

"(A) IN GENERAL.--Notwithstanding subsection (b)(3)(B), no amount attributable to qualified real property may be carried over to a taxable year beginning after 2011.

"(B) TREATMENT OF DISALLOWED AMOUNTS.--Except as provided in subparagraph (C), to the extent that any amount is not allowed to be carried over to a taxable year beginning after 2011 by reason of subparagraph (A), this title shall be applied as if no election under this section had been made with respect to such amount.

"(C) AMOUNTS CARRIED OVER FROM 2010.--If subparagraph (B) applies to any amount (or portion of an amount) which is carried over from a taxable year other than the taxpayer's last taxable year beginning in 2011, such amount (or portion of an amount) shall be treated for purposes of this title as attributable to property placed in service on the first day of the taxpayer's last taxable year beginning in 2011.

"(D) ALLOCATION OF AMOUNTS.--For purposes of applying this paragraph and subsection (b)(3)(B) to any taxable year, the amount which is disallowed under subsection (b)(3)(A) for such taxable year which is attributed to qualified real property shall be the amount which bears the same ratio to the total amount so disallowed as--

"(i) the aggregate amount attributable to qualified real property placed in service during such taxable year, increased by the portion of any amount carried over to such taxable year from a prior taxable year which is attributable to such property, bears to

"(ii) the total amount of section 179 property placed in service during such taxable year, increased by the aggregate amount carried over to such taxable year from any prior taxable year.

For purposes of the preceding sentence, only section 179 property with respect to which an election was made under subsection (c)(1) (determined without regard to subparagraph (B) of this paragraph) shall be taken into account.'.

(c) Revocability of Election.--Paragraph (2) of section 179(c) of the Internal Revenue Code of 1986 is amended by striking "2011" and inserting "2012'.

(d) Computer Software Treated as 179 Property.--Clause (ii) of section 179(d)(1)(A) is amended by striking "2011" and inserting "2012'.

(e) Effective Dates.--

(1) IN GENERAL.--Except as provided in paragraph (2), the amendments made by this section shall apply to property placed in service after December 31, 2009, in taxable years beginning after such date.

(2) EXTENSIONS.--The amendments made by subsections (c) and (d) shall apply to taxable years beginning after December 31, 2010.

SEC. 2022. ADDITIONAL FIRST-YEAR DEPRECIATION FOR 50 PERCENT OF THE BASIS OF CERTAIN QUALIFIED PROPERTY.

(a) In General.--Paragraph (2) of section 168(k) of the Internal Revenue Code of 1986 is amended--

(1) by striking "January 1, 2011" in subparagraph (A)(iv) and inserting "January 1, 2012', and

(2) by striking "January 1, 2010" each place it appears and inserting "January 1, 2011'.

(b) Conforming Amendments.--

(1) The heading for subsection (k) of section 168 of the Internal Revenue Code of 1986 is amended by striking "January 1, 2010" and inserting "January 1, 2011'.

(2) The heading for clause (ii) of section 168(k)(2)(B) of such Code is amended by striking "PRE-JANUARY 1, 2010" and inserting "PRE-JANUARY 1, 2011'.

(3) Subparagraph (D) of section 168(k)(4) of such Code is amended by striking "and" at the end of clause (ii), by striking the period at the end of clause (iii) and inserting a comma, and by adding at the end the following new clauses:

"(iv) "January 1, 2011" shall be substituted for "January 1, 2012" in subparagraph (A)(iv) thereof, and

"(v) "January 1, 2010" shall be substituted for "January 1, 2011" each place it appears in subparagraph (A) thereof.'.

(4) Subparagraph (B) of section 168(l)(5) of such Code is amended by striking "January 1, 2010" and inserting "January 1, 2011'.

(5) Subparagraph (C) of section 168(n)(2) of such Code is amended by striking "January 1, 2010" and inserting "January 1, 2011'.

(6) Subparagraph (D) of section 1400L(b)(2) of such Code is amended by striking "January 1, 2010" and inserting "January 1, 2011'.

(7) Subparagraph (B) of section 1400N(d)(3) of such Code is amended by striking "January 1, 2010" and inserting "January 1, 2011'.

(c) Effective Date.--The amendments made by this section shall apply to property placed in service after December 31, 2009, in taxable years ending after such date.

SEC. 2023. SPECIAL RULE FOR LONG-TERM CONTRACT ACCOUNTING.

(a) In General.--Section 460(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(6) SPECIAL RULE FOR ALLOCATION OF BONUS DEPRECIATION WITH RESPECT TO CERTAIN PROPERTY.--

"(A) IN GENERAL.--Solely for purposes of determining the percentage of completion under subsection (b)(1)(A), the cost of qualified property shall be taken into account as a cost allocated to the contract as if subsection (k) of section 168 had not been enacted.

"(B) QUALIFIED PROPERTY.--For purposes of this paragraph, the term "qualified property" means property described in section 168(k)(2) which--

"(i) has a recovery period of 7 years or less, and

"(ii) is placed in service after December 31, 2009, and before January 1, 2011 (January 1, 2012, in the case of property described in section 168(k)(2)(B)).'.

(b) Effective Date.--The amendment made by this section shall apply to property placed in service after December 31, 2009.

PART III--PROMOTING ENTREPRENEURSHIP

SEC. 2031. INCREASE IN AMOUNT ALLOWED AS DEDUCTION FOR START-UP EXPENDITURES IN 2010.

(a) Start-up Expenditures.--Subsection (b) of section 195 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(3) SPECIAL RULE FOR TAXABLE YEARS BEGINNING IN 2010.--In the case of a taxable year beginning in 2010, paragraph (1)(A)(ii) shall be applied--

"(A) by substituting "$10,000" for "$5,000', and

"(B) by substituting "$60,000" for "$50,000'.'.

(b) Effective Date.--The amendment made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2009.

SEC. 2032. AUTHORIZATION OF APPROPRIATIONS FOR THE UNITED STATES TRADE REPRESENTATIVE TO DEVELOP MARKET ACCESS OPPORTUNITIES FOR UNITED STATES SMALL.--

AND MEDIUM-SIZED BUSINESSES AND TO ENFORCE TRADE AGREEMENTS.

(a) In General.--There are authorized to be appropriated to the Office of the United States Trade Representative $5,230,000, to remain available until expended, for--

(1) analyzing and developing opportunities for businesses in the United States to access the markets of foreign countries; and

(2) enforcing trade agreements to which the United States is a party.

(b) Requirements.--In obligating and expending the funds authorized to be appropriated under subsection (a), the United States Trade Representative shall--

(1) give preference to those initiatives that the United States Trade Representative determines will create or sustain the greatest number of jobs in the United States or result in the greatest benefit to the economy of the United States; and

(2) consider the needs of small.--and medium-sized businesses in the United States with respect to--

(A) accessing the markets of foreign countries; and

(B) the enforcement of trade agreements to which the United States is a party.

PART IV--PROMOTING SMALL BUSINESS FAIRNESS

SEC. 2041. LIMITATION ON PENALTY FOR FAILURE TO DISCLOSE REPORTABLE TRANSACTIONS BASED ON RESULTING TAX BENEFITS.

(a) In General.--Subsection (b) of section 6707A of the Internal Revenue Code of 1986 is amended to read as follows:

"(b) Amount of Penalty.--

"(1) IN GENERAL.--Except as otherwise provided in this subsection, the amount of the penalty under subsection (a) with respect to any reportable transaction shall be 75 percent of the decrease in tax shown on the return as a result of such transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes).

"(2) MAXIMUM PENALTY.--The amount of the penalty under subsection (a) with respect to any reportable transaction shall not exceed--

"(A) in the case of a listed transaction, $200,000 ($100,000 in the case of a natural person), or

"(B) in the case of any other reportable transaction, $50,000 ($10,000 in the case of a natural person).

"(3) MINIMUM PENALTY.--The amount of the penalty under subsection (a) with respect to any transaction shall not be less than $10,000 ($5,000 in the case of a natural person).'.

(b) Effective Date.--The amendment made by this section shall apply to penalties assessed after December 31, 2006.

SEC. 2042. DEDUCTION FOR HEALTH INSURANCE COSTS IN COMPUTING SELF-EMPLOYMENT TAXES IN 2010.

(a) In General.--Paragraph (4) of section 162(l) of the Internal Revenue Code of 1986 is amended by inserting "for taxable years beginning before January 1, 2010, or after December 31, 2010" before the period.

(b) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2009.

SEC. 2043. REMOVAL OF CELLULAR TELEPHONES AND SIMILAR TELECOMMUNICATIONS EQUIPMENT FROM LISTED PROPERTY.

(a) In General.--Subparagraph (A) of section 280F(d)(4) of the Internal Revenue Code of 1986 (defining listed property) is amended by adding "and" at the end of clause (iv), by striking clause (v), and by redesignating clause (vi) as clause (v).

(b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2009.

Subtitle B--Revenue Provisions

PART I--REDUCING THE TAX GAP

SEC. 2101. INFORMATION REPORTING FOR RENTAL PROPERTY EXPENSE PAYMENTS.

(a) In General.--Section 6041 of the Internal Revenue Code of 1986, as amended by section 9006 of the Patient Protection and Affordable Care Act, is amended by redesignating subsections (h) and (i) as subsections (i) and (j), respectively, and by inserting after subsection (g) the following new subsection:

"(h) Treatment of Rental Property Expense Payments.--

"(1) IN GENERAL.--Solely for purposes of subsection (a) and except as provided in paragraph (2), a person receiving rental income from real estate shall be considered to be engaged in a trade or business of renting property.

"(2) EXCEPTIONS.--Paragraph (1) shall not apply to--

"(A) any individual, including any individual who is an active member of the uniformed services or an employee of the intelligence community (as defined in section 121(d)(9)(C)(iv)), if substantially all rental income is derived from renting the principal residence (within the meaning of section 121) of such individual on a temporary basis,

"(B) any individual who receives rental income of not more than the minimal amount, as determined under regulations prescribed by the Secretary, and

"(C) any other individual for whom the requirements of this section would cause hardship, as determined under regulations prescribed by the Secretary.”

(b) Effective Date.--The amendments made by subsection (a) shall apply to payments made after December 31, 2010.

SEC. 2102. INCREASE IN INFORMATION RETURN PENALTIES.

(a) Failure To File Correct Information Returns.--

(1) IN GENERAL.--Subsections (a)(1), (b)(1)(A), and (b)(2)(A) of section 6721 of the Internal Revenue Code of 1986 are each amended by striking "$50" and inserting "$100'.

(2) AGGREGATE ANNUAL LIMITATION.--Subsections (a)(1), (d)(1)(A), and (e)(3)(A) of section 6721 of such Code are each amended by striking "$250,000" and inserting "$1,500,000'.

(b) Reduction Where Correction Within 30 Days.--

(1) IN GENERAL.--Subparagraph (A) of section 6721(b)(1) of the Internal Revenue Code of 1986 is amended by striking "$15" and inserting "$30'.

(2) AGGREGATE ANNUAL LIMITATION.--Subsections (b)(1)(B) and (d)(1)(B) of section 6721 of such Code are each amended by striking "$75,000" and inserting "$250,000'.

(1) IN GENERAL.--Subparagraph (A) of section 6721(b)(2) of the Internal Revenue Code of 1986 is amended by striking "$30" and inserting "$60'.

(2) AGGREGATE ANNUAL LIMITATION.--Subsections (b)(2)(B) and (d)(1)(C) of section 6721 of such Code are each amended by striking "$150,000" and inserting "$500,000'.

(d) Aggregate Annual Limitations for Persons With Gross Receipts of Not More Than $5,000,000.--

(1) IN GENERAL.--Paragraph (1) of section 6721(d) of the Internal Revenue Code of 1986 is amended--

(A) by striking "$100,000" in subparagraph (A) and inserting "$500,000',

(B) by striking "$25,000" in subparagraph (B) and inserting "$75,000', and

(2) TECHNICAL AMENDMENT.--Paragraph (1) of section 6721(d) of such Code is amended by striking "such taxable year" and inserting "such calendar year'.

(e) Penalty in Case of Intentional Disregard.--Paragraph (2) of section 6721(e) of the Internal Revenue Code of 1986 is amended by striking "$100" and inserting "$250'.

(f) Adjustment for Inflation.--Section 6721 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

"(f) Adjustment for Inflation.--

"(1) IN GENERAL.--For each fifth calendar year beginning after 2012, each of the dollar amounts under subsections (a), (b), (d) (other than paragraph (2)(A) thereof), and (e) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting "calendar year 2011" for "calendar year 1992" in subparagraph (B) thereof.

"(2) ROUNDING.--If any amount adjusted under paragraph (1)--

"(A) is not less than $75,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and

"(B) is not described in subparagraph (A) and is not a multiple of $10, such amount shall be rounded to the next lowest multiple of $10.'.

(g) Failure To Furnish Correct Payee Statements.--Section 6722 of the Internal Revenue Code of 1986 is amended to read as follows:

`SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATEMENTS.

"(a) Imposition of Penalty.--

"(1) GENERAL RULE.--In the case of each failure described in paragraph (2) by any person with respect to a payee statement, such person shall pay a penalty of $100 for each statement with respect to which such a failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $1,500,000.

"(2) FAILURES SUBJECT TO PENALTY.--For purposes of paragraph (1), the failures described in this paragraph are--

"(A) any failure to furnish a payee statement on or before the date prescribed therefor to the person to whom such statement is required to be furnished, and

"(B) any failure to include all of the information required to be shown on a payee statement or the inclusion of incorrect information.

"(b) Reduction Where Correction in Specified Period.--

"(1) CORRECTION WITHIN 30 DAYS.--If any failure described in subsection (a)(2) is corrected on or before the day 30 days after the required filing date--

"(A) the penalty imposed by subsection (a) shall be $30 in lieu of $100, and

"(B) the total amount imposed on the person for all such failures during any calendar year which are so corrected shall not exceed $250,000.

"(2) FAILURES CORRECTED ON OR BEFORE AUGUST 1.--If any failure described in subsection (a)(2) is corrected after the 30th day referred to in paragraph (1) but on or before August 1 of the calendar year in which the required filing date occurs--

"(A) the penalty imposed by subsection (a) shall be $60 in lieu of $100, and

"(B) the total amount imposed on the person for all such failures during the calendar year which are so corrected shall not exceed $500,000.

"(c) Exception for De Minimis Failures.--

"(1) IN GENERAL.--If--

"(A) a payee statement is furnished to the person to whom such statement is required to be furnished,

"(B) there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such statement, and

"(C) such failure is corrected on or before August 1 of the calendar year in which the required filing date occurs,

for purposes of this section, such statement shall be treated as having been furnished with all of the correct required information.

"(2) LIMITATION.--The number of payee statements to which paragraph (1) applies for any calendar year shall not exceed the greater of--

"(A) 10, or

"(B) one-half of 1 percent of the total number of payee statements required to be filed by the person during the calendar year.

"(d) Lower Limitations for Persons With Gross Receipts of Not More Than $5,000,000.--

"(1) IN GENERAL.--If any person meets the gross receipts test of paragraph (2) with respect to any calendar year, with respect to failures during such calendar year--

"(A) subsection (a)(1) shall be applied by substituting ‘$500,000’ for ‘$1,500,000',

"(B) subsection (b)(1)(B) shall be applied by substituting ‘$75,000’ for ‘$250,000', and

"(C) subsection (b)(2)(B) shall be applied by substituting ‘$200,000’ for "$500,000'.

"(2) GROSS RECEIPTS TEST.--A person meets the gross receipts test of this paragraph if such person meets the gross receipts test of section 6721(d)(2).

"(e) Penalty in Case of Intentional Disregard.--If 1 or more failures to which subsection (a) applies are due to intentional disregard of the requirement to furnish a payee statement (or the correct information reporting requirement), then, with respect to each such failure--

"(1) subsections (b), (c), and (d) shall not apply,

"(2) the penalty imposed under subsection (a)(1) shall be $250, or, if greater--

"(A) in the case of a payee statement other than a statement required under section 6045(b), 6041A(e) (in respect of a return required under section 6041A(b)), 6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of the aggregate amount of the items required to be reported correctly, or

"(B) in the case of a payee statement required under section 6045(b), 6050K(b), or 6050L(c), 5 percent of the aggregate amount of the items required to be reported correctly, and

"(3) in the case of any penalty determined under paragraph (2)--

"(A) the $1,500,000 limitation under subsection (a) shall not apply, and

"(B) such penalty shall not be taken into account in applying such limitation to penalties not determined under paragraph (2).

"(f) Adjustment for Inflation.--

"(1) IN GENERAL.--For each fifth calendar year beginning after 2012, each of the dollar amounts under subsections (a), (b), (d)(1), and (e) shall be increased by such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) determined by substituting "calendar year 2011" for "calendar year 1992" in subparagraph (B) thereof.

"(2) ROUNDING.--If any amount adjusted under paragraph (1)--

"(A) is not less than $75,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and

"(B) is not described in subparagraph (A) and is not a multiple of $10, such amount shall be rounded to the next lowest multiple of $10.'.

(h) Effective Date.--The amendments made by this section shall apply with respect to information returns required to be filed on or after January 1, 2011.

SEC. 2103. REPORT ON TAX SHELTER PENALTIES AND CERTAIN OTHER ENFORCEMENT ACTIONS.

(a) In General.--The Commissioner of Internal Revenue, in consultation with the Secretary of the Treasury, shall submit to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate an annual report on the penalties assessed by the Internal Revenue Service during the preceding year under each of the following provisions of the Internal Revenue Code of 1986:

(1) Section 6662A (relating to accuracy-related penalty on understatements with respect to reportable transactions).

(2) Section 6700(a) (relating to promoting abusive tax shelters).

(3) Section 6707 (relating to failure to furnish information regarding reportable transactions).

(4) Section 6707A (relating to failure to include reportable transaction information with return).

(5) Section 6708 (relating to failure to maintain lists of advisees with respect to reportable transactions).

(b) Additional Information.--The report required under subsection (a) shall also include information on the following with respect to each year:

(1) Any action taken under section 330(b) of title 31, United States Code, with respect to any reportable transaction (as defined in section 6707A(c) of the Internal Revenue Code of 1986).

(2) Any extension of the time for assessment of tax enforced, or assessment of any amount under such an extension, under paragraph (10) of section 6501(c) of the Internal Revenue Code of 1986.

SEC. 2104. APPLICATION OF CONTINUOUS LEVY TO TAX LIABILITIES OF CERTAIN FEDERAL CONTRACTORS.

(a) In General.--Subsection (f) of section 6330 of the Internal Revenue Code of 1986 is amended by striking "or" at the end of paragraph (2), by inserting "or" at the end of paragraph (3), and by inserting after paragraph (3) the following new paragraph:

"(4) the Secretary has served a Federal contractor levy,'.

(b) Federal Contractor Levy.--Subsection (h) of section 6330 of the Internal Revenue Code of 1986 is amended--

(1) by striking all that precedes “any levy in connection with the collection” and inserting the following:

"(h) Definitions Related to Exceptions.--For purposes of subsection (f)--

"(1) DISQUALIFIED EMPLOYMENT TAX LEVY.--A disqualified employment tax levy is'; and

(2) by adding at the end the following new paragraph:

"(2) FEDERAL CONTRACTOR LEVY.--A Federal contractor levy is any levy if the person whose property is subject to the levy (or any predecessor thereof) is a Federal contractor.'.

(c) Conforming Amendment.--The heading of subsection (f) of section 6330 of the Internal Revenue Code of 1986 is amended by striking "Jeopardy and State Refund Collection" and inserting "Exceptions'.

(d) Effective Date.--The amendments made by this section shall apply to levies issued after the date of the enactment of this Act.

PART II--PROMOTING RETIREMENT PREPARATION

SEC. 2111. PARTICIPANTS IN GOVERNMENT SECTION 457 PLANS ALLOWED TO TREAT ELECTIVE DEFERRALS AS ROTH CONTRIBUTIONS.

(a) In General.--Section 402A(e)(1) of the Internal Revenue Code of 1986 is amended by striking "and" at the end of subparagraph (A), by striking the period at the end of subparagraph (B) and inserting ", and', and by adding at the end the following:

"(C) an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A).'.

(b) Elective Deferrals.--Section 402A(e)(2) of the Internal Revenue Code of 1986 is amended to read as follows:

"(2) ELECTIVE DEFERRAL.--The term "elective deferral" means--

"(A) any elective deferral described in subparagraph (A) or (C) of section 402(g)(3), and

"(B) any elective deferral of compensation by an individual under an eligible deferred compensation plan (as defined in section 457(b)) of an eligible employer described in section 457(e)(1)(A).'.

SEC. 2112. ROLLOVERS FROM ELECTIVE DEFERRAL PLANS TO DESIGNATED ROTH ACCOUNTS.

(a) In General.--Section 402A(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(4) TAXABLE ROLLOVERS TO DESIGNATED ROTH ACCOUNTS.--

"(A) IN GENERAL.--Notwithstanding sections 402(c), 403(b)(8), and 457(e)(16), in the case of any distribution to which this paragraph applies--

"(i) there shall be included in gross income any amount which would be includible were it not part of a qualified rollover contribution,

"(ii) section 72(t) shall not apply, and

"(iii) unless the taxpayer elects not to have this clause apply, any amount required to be included in gross income for any taxable year beginning in 2010 by reason of this paragraph shall be so included ratably over the 2-taxable-year period beginning with the first taxable year beginning in 2011.

Any election under clause (iii) for any distributions during a taxable year may not be changed after the due date for such taxable year.

"(B) DISTRIBUTIONS TO WHICH PARAGRAPH APPLIES.--In the case of an applicable retirement plan which includes a qualified Roth contribution program, this paragraph shall apply to a distribution from such plan other than from a designated Roth account which is contributed in a qualified rollover contribution (within the meaning of section 408A(e)) to the designated Roth account maintained under such plan for the benefit of the individual to whom the distribution is made.

"(C) COORDINATION WITH LIMIT.--Any distribution to which this paragraph applies shall not be taken into account for purposes of paragraph (1).

"(D) OTHER RULES.--The rules of subparagraphs (D), (E), and (F) of section 408A(d)(3) (as in effect for taxable years beginning after 2009) shall apply for purposes of this paragraph.'.

(b) Effective Date.--The amendments made by this section shall apply to distributions after the date of the enactment of this Act.

SEC. 2113. SPECIAL RULES FOR ANNUITIES RECEIVED FROM ONLY A PORTION OF A CONTRACT.

(a) In General.--Subsection (a) of section 72 of the Internal Revenue Code of 1986 is amended to read as follows:

"(a) General Rules for Annuities.--

"(1) INCOME INCLUSION.--Except as otherwise provided in this chapter, gross income includes any amount received as an annuity (whether for a period certain or during one or more lives) under an annuity, endowment, or life insurance contract.

"(2) PARTIAL ANNUITIZATION.--If any amount is received as an annuity for a period of 10 years or more or during one or more lives under any portion of an annuity, endowment, or life insurance contract--

"(A) such portion shall be treated as a separate contract for purposes of this section,

"(B) for purposes of applying subsections (b), (c), and (e), the investment in the contract shall be allocated pro rata between each portion of the contract from which amounts are received as an annuity and the portion of the contract from which amounts are not received as an annuity, and

"(C) a separate annuity starting date under subsection (c)(4) shall be determined with respect to each portion of the contract from which amounts are received as an annuity.'.

(b) Effective Date.--The amendment made by this section shall apply to amounts received in taxable years beginning after December 31, 2010.

PART III--CLOSING UNINTENDED LOOPHOLES

SEC. 2121. CRUDE TALL OIL INELIGIBLE FOR CELLULOSIC BIOFUEL PRODUCER CREDIT.

(a) In General.--Clause (iii) of section 40(b)(6)(E) of the Internal Revenue Code of 1986, as added by the Health Care and Education Reconciliation Act of 2010, is amended--

(1) by striking "or" at the end of subclause (I),

(2) by striking the period at the end of subclause (II) and inserting ", or',

(3) by adding at the end the following new subclause:

"(III) such fuel has an acid number greater than 25.', and

(4) by striking "UNPROCESSED" in the heading and inserting "CERTAIN'.

(b) Effective Date.--The amendments made by this section shall apply to fuels sold or used on or after January 1, 2010.

SEC. 2122. SOURCE RULES FOR INCOME ON GUARANTEES.

(a) Amounts Sourced Within the United States.--Subsection (a) of section 861 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(9) GUARANTEES.--Amounts received, directly or indirectly, from--

"(A) a noncorporate resident or domestic corporation for the provision of a guarantee of any indebtedness of such resident or corporation, or

"(B) any foreign person for the provision of a guarantee of any indebtedness of such person, if such amount is connected with income which is effectively connected (or treated as effectively connected) with the conduct of a trade or business in the United States.'.

(b) Amounts Sourced Without the United States.--Subsection (a) of section 862 of the Internal Revenue Code of 1986 is amended by striking "and" at the end of paragraph (7), by striking the period at the end of paragraph (8) and inserting "; and', and by adding at the end the following new paragraph:

"(9) amounts received, directly or indirectly, from a foreign person for the provision of a guarantee of indebtedness of such person other than amounts which are derived from sources within the United States as provided in section 861(a)(9).'.

(c) Conforming Amendment.--Clause (ii) of section 864(c)(4)(B) of the Internal Revenue Code of 1986 is amended by striking "dividends or interest" and inserting "dividends, interest, or amounts received for the provision of guarantees of indebtedness'.

(d) Effective Date.--The amendments made by this section shall apply to guarantees issued after the date of the enactment of this Act.

PART IV--TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES

SEC. 2131. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.

The percentage under paragraph (2) of section 561 of the Hiring Incentives to Restore Employment Act in effect on the date of the enactment of this Act is increased by 36 percentage points.

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