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H.R. 3856 (114th): Information Reporting Simplification Act of 2015

The text of the bill below is as of Oct 28, 2015 (Introduced).


I

114th CONGRESS

1st Session

H. R. 3856

IN THE HOUSE OF REPRESENTATIVES

October 28, 2015

(for himself and Mr. Carney) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide a safe harbor for de minimis errors on information returns and payee statements.

1.

Short title

This Act may be cited as the Information Reporting Simplification Act of 2015.

2.

Safe harbor for de minimis errors on information returns and payee statements

(a)

In general

Section 6721(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(3)

Safe harbor for certain de minimis errors

(A)

In general

If, with respect to an information return filed with the Secretary—

(i)

there are 1 or more failures described in subsection (a)(2)(B) relating to an incorrect dollar amount,

(ii)

no single amount in error differs from the correct amount by more than $100, and

(iii)

no single amount reported for tax withheld on any information return differs from the correct amount by more than $25,

then no correction shall be required and, for purposes of this section, such return shall be treated as having been filed with all of the correct required information.
(B)

Exception

Subparagraph (A) shall not apply with respect to any incorrect dollar amount to the extent that such error relates to an amount with respect to which an election is made under section 6722(c)(3)(B).

(C)

Regulatory authority

The Secretary may issue regulations to prevent the abuse of the safe harbor under this paragraph, including regulations providing that this paragraph shall not apply to the extent necessary to prevent any such abuse.

.

(b)

Failure To furnish correct payee statement

Section 6722(c) of such Code is amended by adding at the end the following new paragraph:

(3)

Safe harbor for certain de minimis errors

(A)

In general

If, with respect to any payee statement—

(i)

there are 1 or more failures described in subsection (a)(2)(B) relating to an incorrect dollar amount,

(ii)

no single amount in error differs from the correct amount by more than $100, and

(iii)

no single amount reported for tax withheld on any information return differs from the correct amount by more than $25,

then no correction shall be required and, for purposes of this section, such statement shall be treated as having been filed with all of the correct required information.
(B)

Exception

Subparagraph (A) shall not apply to any payee statement if the person to whom such statement is required to be furnished makes an election (at such time and in such manner as the Secretary may prescribe) that subparagraph (A) not apply with respect to such statement.

(C)

Regulatory authority

The Secretary may issue regulations to prevent the abuse of the safe harbor under this paragraph, including regulations providing that this paragraph shall not apply to the extent necessary to prevent any such abuse.

.

(c)

Application to broker reporting of basis

Section 6045(g)(2)(B) of such Code is amended by adding at the end the following new clause:

(iii)

Treatment of uncorrected de minimis errors

Except as otherwise provided by the Secretary, the customer’s adjusted basis shall be determined by treating any incorrect dollar amount which is not required to be corrected by reason of section 6721(c)(3) as the correct amount.

.

(d)

Conforming amendments

(1)

Section 6721(c) of such Code is amended by striking Exception for de minimis failures to include all required information in the heading and inserting Exceptions for certain de minimis failures.

(2)

Section 6721(c)(1) of such Code is amended by striking In general in the heading and inserting Exception for de minimis failure to include all required information.

(e)

Effective date

The amendments made by this section shall apply to returns required to be filed, and payee statements required to be provided, on or after the date of the enactment of this Act.