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S. 1827 (114th): Small Business Tax Compliance Relief Act of 2015

The text of the bill below is as of Jul 22, 2015 (Introduced).


II

114th CONGRESS

1st Session

S. 1827

IN THE SENATE OF THE UNITED STATES

July 22, 2015

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 improve the tax treatment of small businesses.

1.

Short title, etc

(a)

Short title

This Act may be cited as the Small Business Tax Compliance Relief Act of 2015.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title, etc.

TITLE I—Small business tax reform

Sec. 101. Expansion of cash accounting threshold.

Sec. 102. Modification of Safe Harbor for Expensing of Acquisition or Production Costs of Tangible Property.

Sec. 103. Removal of computer equipment from listed property.

Sec. 104. Deduction for health insurance costs in computing self-employment taxes.

Sec. 105. Flexible retirement account for small businesses.

Sec. 106. Repeal of simple plans and simple IRAs.

Sec. 107. Modification of rules relating to the termination of partnerships and S corporations.

Sec. 108. Repeal of special rules for top-heavy plans.

TITLE II—Provisions related to the Internal Revenue Service

Sec. 201. Requirement to convene small business review panels.

Sec. 202. Penalty waivers in cases of good faith efforts.

Sec. 203. Inflation adjustments for certain provisions.

Sec. 204. Report on uniform definitions.

Sec. 205. Report on improvements to customer service.

Sec. 206. Reasonable cause exception for failure to report certain transactions.

Sec. 207. Reasonable cause exception.

Sec. 208. Return due date modifications.

TITLE III—Provisions related to start-up businesses

Sec. 301. Modification of application of rules for nonqualified deferred compensation plans.

Sec. 302. Reduction in holding period for qualified small business stock.

Sec. 303. Extension of rollover period for qualified small business stock.

I

Small business tax reform

101.

Expansion of cash accounting threshold

(a)

In general

(1)

In general

Paragraph (3) of section 448(b) of the Internal Revenue Code of 1986 is amended by striking $5,000,000 in the text and in the heading and inserting $10,000,000.

(2)

Conforming amendments

Section 448(c) of such Code is amended—

(A)

by striking $5,000,000 each place it appears in the text and in the heading of paragraph (1) and inserting $10,000,000, and

(B)

by adding at the end the following new paragraph:

(4)

Inflation adjustment

In the case of any taxable year beginning in a calendar year after 2015, the dollar amount contained in subsection (b)(3) and paragraph (1) of this subsection shall 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, by substituting calendar year 2014 for calendar year 1992 in subparagraph (B) thereof.

If any amount as adjusted under this subparagraph is not a multiple of $100,000, such amount shall be rounded to the nearest multiple of $100,000.

.

(b)

Exemption from inventory requirement

Section 471 of the Internal Revenue Code of 1986 is amended by redesignating subsection (c) as subsection (d) and by inserting after subsection (b) the following new subsection:

(c)

Section Not To Apply to Certain Cash Method Taxpayers

If a taxpayer—

(1)

would otherwise be required to use inventories under this section for any taxable year, but

(2)

the taxpayer meets the gross receipts test of section 448(b) for the taxable year and is eligible and elects to use the cash receipts and disbursements method of accounting for the taxable year,

then the requirement to use inventories shall not apply to the taxpayer for the taxable year.

.

(c)

Effective date and special rule

(1)

In general

The amendments made by this section shall apply to taxable years beginning after December 31, 2014.

(2)

Change in method of accounting

In the case of any taxpayer changing the taxpayer’s method of accounting for any taxable year under the amendments made by this section—

(A)

such change shall be treated as initiated by the taxpayer; and

(B)

such change shall be treated as made with the consent of the Secretary of the Treasury.

102.

Modification of Safe Harbor for Expensing of Acquisition or Production Costs of Tangible Property

(a)

Requirement To Modify Safe Harbor

The Secretary of the Treasury or his delegate shall, within 180 days after the date of enactment of this Act, modify Treasury Regulations section 1.263(a)–1(f) by—

(1)

increasing the amount of the de minimis safe harbor for taxpayers without applicable financial statements from $500 to $2,500,

(2)

requiring adequate records showing the dollar amount being expensed in lieu of accounting procedures in place at the beginning of the taxable year, and

(3)

modifying the definition of applicable financial statement to include reviewed financial statements.

(b)

Effective date

The modifications required by subsection (a) shall apply to taxable years beginning after December 31, 2014.

103.

Removal of computer equipment from listed property

(a)

In general

Section 280F(d)(4)(A) of the Internal Revenue Code of 1986 is amended by inserting and at the end of clause (iii) and by striking clause (iv).

(b)

Conforming amendment

Section 280F(d)(4) of the Internal Revenue Code of 1986 is amended by striking subparagraph (B) and by redesignating subparagraph (C) as subparagraph (B).

(c)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

104.

Deduction for health insurance costs in computing self-employment taxes

(a)

In general

Paragraph (4) of section 162(l) of the Internal Revenue Code of 1986 is amended by striking for taxable years beginning before January 1, 2010, or after December 31, 2010 and inserting for taxable years beginning before January 1, 2015..

(b)

Effective date

The amendment made by this section shall apply to taxable years beginning after December 31, 2014.

105.

Flexible retirement account for small businesses

(a)

In general

Section 408 of the Internal Revenue Code of 1986 is amended by redesignating subsection (r) as subsection (s) and by inserting after subsection (q) the following new subsection:

(r)

Flexible retirement account defined

(1)

In general

For purposes of this title, the term flexible retirement account means an individual retirement account or individual retirement annuity with respect to which the requirements of paragraphs (2), (3), (4), and (7) are met.

(2)

Maintained by small business

(A)

In general

This paragraph is satisfied for a year with respect to a flexible retirement account that is part of a plan of an employer if the employer has not more than 100 full-time employees on the last day of the previous year.

(B)

Aggregation rules

For purposes of subparagraph (A), all employees of any trades or business (whether or not incorporated) which are under common control shall be treated as employed by a single employer.

(3)

Participation requirements

This paragraph is satisfied with respect to a flexible retirement account for a year only if for such year the employer maintains a flexible retirement account on behalf of each employee who—

(A)

has attained age 21, and

(B)

received not less than $3,300 in compensation (within the meaning of section 415(c)(3)) from the employer in any calendar quarter during the previous year.

(4)

Automatic enrollment; employee may elect not to participate

This paragraph is satisfied with respect to a flexible retirement account that is part of a plan of an employer if under the terms of the plan—

(A)

each employee described in paragraph (3) (without regard to paragraph (5))—

(i)

may elect—

(I)

to have the employer make contributions on behalf of the employee to a flexible retirement account, or

(II)

to have such payments paid to the employee directly in cash, and

(ii)

is deemed to have made the election under clause (i)(I), effective as of the first day of the first calendar quarter beginning after the employee becomes an employee described in paragraph (3), in an amount equal to 3 percent of the employee's compensation, until the employee specifically elects not to have such contributions made or to have contributions made in a different amount, and

(B)

amounts contributed pursuant clause (i) or (ii) of subparagraph (A) are invested in a diversified common stock fund chosen by the financial institution holding the flexible retirement account until the employee specifically elects to direct such contributions to a different investment option.

(5)

Inclusion of self-employed individuals

For purposes of this subsection, the term employee includes an employee as defined in section 401(c)(1). For purposes of applying the limitations of sections 402(h), 404(h), and 415(c)(1)(A) with respect to an employee described in the preceding sentence, the term compensation has the meaning given in subsection (p)(6)(A)(ii).

(6)

Employer contributions

The employer maintaining a flexible retirement account may make qualified nonelective contributions (as defined in section 401(m)(4)(C)) to the flexible retirement accounts of employees described in paragraph (3), but only if such contributions made with respect to all such employees bear a uniform relationship to the compensation of the employees.

(7)

Financial institutions

This paragraph is satisfied with respect to a flexible retirement account if—

(A)

such account is maintained at a financial institution, including a bank, credit union, insurance company, broker or dealer registered with the Securities and Exchange Commission, and such other entities as the Secretary may by regulation designate,

(B)

such financial institution—

(i)

provides for not less than 3 investment options among which the employee may choose to direct the contributions to and balances held in the employee's flexible retirement account, each of which is diversified and has materially different risk and return characteristics, and

(ii)

provides a quarterly report to each employee with respect to whom it holds a flexible retirement account describing the contributions to the account, withdrawals from the account, and investment performance of the account, and

(C)

the contributions to and balances held in the flexible retirement account of an employee may not be invested in securities of the employer maintaining such account.

.

(b)

Limitation on deductions by employer

Subsection (h) of section 404 of the Internal Revenue Code of 1986 is amended—

(1)

by striking pensions in the heading and inserting pensions and flexible retirement accounts,

(2)

by striking a simplified employee pension each place it appears in paragraph (1) and inserting a simplified employee pension or a flexible retirement account, and

(3)

by striking For purposes of subsection (a)(7), a simplified employee pension shall be treated as if it were in paragraph (3) and inserting In the case of a simplified employee pension or a flexible retirement account, section (a)(7) shall be applied by treating such pension or account as if it were.

(c)

Taxability of beneficiary

Subsection (h) of section 402 of the Internal Revenue Code of 1986 is amended—

(1)

by striking pensions in the heading and inserting pensions and flexible retirement accounts,

(2)

by striking 408(k)) in paragraph (1) and inserting 408(k)) or a flexible retirement account (as defined in section 408(r)),

(3)

by striking section 408(k)(6) in paragraph (1)(B) and inserting subsection (k)(6) or (r)(4) of section 408,

(4)

by striking the simplified employee pension each place it appears in paragraphs (1)(B) and (2)(A) and inserting the simplified employee pension or flexible retirement account,

(5)

by striking a simplified employee pension each place it appears in paragraphs (2) and (3) and inserting a simplified employee pension or flexible retirement account, and

(6)

by striking reduced in the case in paragraph (2)(B) and inserting reduced, with respect to a simplified employee pension, in the case.

(d)

Conforming amendments

(1)

Subparagraph (A) of section 219(g)(5) of the Internal Revenue Code of 1986 is amended by striking or at the end of clause (v) and by adding at the end the following new clause:

(vii)

a flexible retirement account (within the meaning of section 408(r)), or

.

(2)

Paragraph (6) of section 280G(b) of such Code is amended by striking or at the end of subparagraph (C), by striking the period at the end of subparagraph (D) and inserting , or, and by adding at the end the following new subparagraph:

(E)

a flexible retirement account (as defined in section 408(r)).

.

(3)

Subsection (j) of section 408 of such Code is amended—

(A)

by striking pensions in the heading and inserting pensions and flexible retirement accounts, and

(B)

by striking pension, and inserting pension or flexible retirement account,.

(4)

Subsections (b), (c), (m)(4)(B), (n)(3)(B), and (u)(1)(C) of section 414 of such Code are each amended by inserting , 408(r) after 408(p).

(5)

Paragraph (6) of section 414(u) of such Code is amended by inserting , any flexible retirement account under section 408(r) after 408(p).

(6)

Subparagraph (B) of section 414(v)(3) of such Code is amended by inserting , 408(r) after 408(k).

(7)

Clause (iv) of section 414(v)(6)(A) of such Code is amended by striking (k) or (p) and inserting (k), (p), or (r).

(8)

Paragraph (5) of section 414(w) of such Code is amended by striking and at the end of subparagraph (D), by striking the period at the end of subparagraph (E) and inserting , and, and by adding at the end the following new subparagraph:

(F)

a flexible retirement account (as defined in section 408(r)).

.

(9)

Paragraph (2) of section 415(a) of such Code is amended—

(A)

by striking or at the end of subparagraph (B),

(B)

by striking the comma at the end of subparagraph (C) and inserting , or,

(C)

by inserting after subparagraph (C) the following new subparagraph:

(D)

a flexible retirement account described in section 408(r),

,

(D)

by striking or pension and inserting pension, or account, and

(E)

by striking or 408(k) and inserting 408(k), or 408(r).

(10)

Subparagraph (C) of section 3121(a)(5) of such Code is amended by inserting , or a flexible retirement account (as defined in section 408(r) after 408(k)(6).

(11)

Subparagraph (C) of section 3306(a)(5) of such Code is amended by inserting , or a flexible retirement account (as defined in section 408(r) after 408(k)(6).

(12)

Subparagraph (A) of section 4972(d)(1) of such Code is amended by striking and at the end of clause (iii), by striking the period at the end of clause (iv) and inserting , and, and by adding at the end the following new clause:

(v)

any flexible retirement account (within the meaning of section 408(r)).

.

(e)

Effective date

The amendments made by this section shall apply to contributions made after December 31, 2015.

106.

Repeal of simple plans and simple IRAs

(a)

Simple 401(k) plans

Paragraph (11) of section 401(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(E)

Termination

This paragraph shall not apply to any cash or deferred arrangement adopted after December 31, 2016.

.

(b)

Simple IRAs

Subsection (p) of section 408 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

(11)

Termination

This subsection shall not apply to any plan established after December 31, 2016.

.

107.

Modification of rules relating to the termination of partnerships and S corporations

(a)

No termination of partnership on sale or exchange of assets

(1)

In general

Section 708(b)(1) of the Internal Revenue Code of 1986 is amended by striking only if and all that follows and inserting only if no part of any business, financial operation, or venture of the partnership continues to be carried on by any of its partners in a partnership..

(2)

Conforming amendments

(A)

Section 168(i)(7)(B) of such Code is amended by striking the last sentence.

(B)

Section 743(e) of such Code is amended by striking paragraph (4).

(C)

Section 774 of such Code is amended by striking subsection (c).

(b)

No termination of S corporation status due to excessive passive investment income

Paragraph (3) of section 1362(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(D)

Termination

This paragraph shall not apply to taxable years ending after the date of the enactment of the Small Business Tax Compliance Relief Act of 2015.

.

108.

Repeal of special rules for top-heavy plans

Section 416 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(j)

Termination

This section shall not apply to plan years beginning after the date of the enactment of the Small Business Tax Compliance Relief Act of 2015.

.

II

Provisions related to the Internal Revenue Service

201.

Requirement to convene small business review panels

Section 609(d) of title 5, United States Code, is amended—

(1)

in paragraph (2), by striking and at the end;

(2)

in paragraph (3), by striking the period and inserting ; and; and

(3)

by adding at the end the following:

(4)

the Internal Revenue Service.

.

202.

Penalty waivers in cases of good faith efforts

The Commissioner of Internal Revenue may waive the application of any provision of the Internal Revenue Code of 1986 (other than a criminal penalty) if it is shown that the taxpayer acted in good faith or failure to comply with the provision was due to reasonable cause.

203.

Inflation adjustments for certain provisions

(a)

In general

Chapter 77 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

7529.

Inflation adjustments

(a)

In general

In the case of any taxable year beginning in a calendar year after 2015, each of the specified dollar amounts shall be increased by an amount equal to—

(1)

such dollar amount, multiplied by

(2)

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 2014 for calendar year 1992 in subparagraph (B) thereof.

(b)

Specified dollar amounts

For purposes of subsection (a), the specified dollar amounts are—

(1)

the $50,000 amount in section 79(a)(1),

(2)

each of the $5,250 amounts in section 127(a)(2),

(3)

each of the $500 amounts in paragraphs (11)(A), (11)(B), and (12) of section 170(f),

(4)

the $5,000 amount in section 170(f)(11)(C),

(5)

the $10,000,000 amount in section 263A(b)(2),

(6)

each of the dollar amounts in section 274(b)(1),

(7)

each of the $400 amounts in section 274(j),

(8)

the $1,600 amount in section 274(j)(2)(B),

(9)

the $10,000,000 amount in section 1202(b)(1),

(10)

each of the $50,000,000 amounts in section 1202(d)(1),

(11)

the $50,000 amount in section 1244(b)(1), and

(12)

the $1,000,000 in section 1244(c)(3)(A).

(c)

Rounding

(1)

Any increase determined under paragraph (5), (9), or (10) of subsection (b) shall be rounded to the nearest multiple of $100,000.

(2)

Any increase determined under paragraph (1), (4), (11), or (12) of subsection (b) shall be rounded to the nearest multiple of $1,000.

(3)

Any increase determined under paragraph (2) of subsection (b) shall be rounded to the nearest multiple of $500.

(4)

Any increase determined under paragraph (3), (7), or (8) of subsection (b) shall be rounded to the nearest multiple of $100.

(5)

Any increase determined under paragraph (6) of subsection (b) shall be rounded to the nearest multiple of $5.

.

(b)

Conforming amendments

(1)

Section 1202(b)(3) of such Code is amended by striking paragraph (1)(A) shall be applied by substituting $5,000,000 for $10,000,000 and inserting the amount under paragraph (1)(A) shall be 50 percent of such dollar amount (determined without regard to this paragraph).

(2)

Section 1244(b)(2) of such Code is amended by striking $100,000 and inserting 200 percent of the amount under paragraph (1).

(c)

Clerical amendment

The table of sections for chapter 77 of such Code is amended by adding at the end the following new item:

Sec. 7529. Inflation adjustments.

.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

204.

Report on uniform definitions

Not later than June 30, 2016, the Commissioner of Internal Revenue shall submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Finance of the Senate, and the Committee on Ways and Means of the House of Representatives a report detailing changes in law to make statutory definitions in the Internal Revenue Code of 1986 relating to small businesses consistent across different provisions of such Code. Such report shall include recommendations on wording such definitions in a manner that is easy to understand for a layman not familiar with the Internal Revenue Code of 1986.

205.

Report on improvements to customer service

Not later than June 30, 2016, the Commissioner of Internal Revenue shall submit to the Committee on Small Business and Entrepreneurship of the Senate, the Committee on Finance of the Senate, and the Committee on Ways and Means of the House of Representatives a report detailing specific ways to improve customer service to small businesses, including objectively measurable goals for how to reduce response times.

206.

Reasonable cause exception for failure to report certain transactions

(a)

In general

Subsection (d) of section 6707A of the Internal Revenue Code of 1986 is amended to read as follows:

(d)

Reasonable cause waiver

No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

.

(b)

Conforming amendments

(1)

Section 6664(d)(3) of the Internal Revenue Code of 1986 is amended by striking if the penalty for such failure was rescinded under section 6707A(d) and inserting if it is shown that such failure is due to reasonable cause and not to willful neglect.

(2)

Section 6707(c) of such Code is amended to read as follows:

(c)

Reasonable cause waiver

No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

.

(c)

Effective date

The amendments made by this section shall take effect on the date of the enactment of this Act.

207.

Reasonable cause exception

(a)

In general

No assessable penalty or addition to tax shall be imposed under the Internal Revenue Code of 1986 if it is shown that an action, or failure to act, by the taxpayer with regard to any material element was due to reasonable cause and the taxpayer acted in good faith.

(b)

Coordination

Subsection (a) shall not apply to any assessable penalty or addition to tax for which there is a provision of the Internal Revenue Code which provides for the nonapplication of such penalty or addition if the taxpayer's action (or failure to act) was due to reasonable cause.

208.

Return due date modifications

(a)

New due date for partnership form 1065, S corporation form 1120S, and C corporation form 1120

(1)

Partnerships

(A)

In general

Section 6072 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:

(f)

Returns of partnerships

Returns of partnerships under section 6031 made on the basis of the calendar year shall be filed on or before the 15th day of March following the close of the calendar year, and such returns made on the basis of a fiscal year shall be filed on or before the 15th day of the third month following the close of the fiscal year.

.

(B)

Conforming amendment

Section 6072(a) of such Code is amended by striking 6017, or 6031 and inserting or 6017.

(2)

S corporations

(A)

In general

So much of subsection (b) of 6072 of such Code as precedes the second sentence thereof is amended to read as follows:

(b)

Returns of certain corporations

Returns of S corporations under sections 6012 and 6037 made on the basis of the calendar year shall be filed on or before the 31st day of March following the close of the calendar year, and such returns made on the basis of a fiscal year shall be filed on or before the last day of the third month following the close of the fiscal year.

.

(B)

Conforming amendments

(i)

Section 1362(b) of such Code is amended—

(I)

by striking 15th each place it appears and inserting last,

(II)

by striking 21/2 each place it appears and inserting 3, and

(III)

by striking 2 months and 15 days in paragraph (4) and inserting 3 months.

(ii)

Section 1362(d)(1)(C)(i) of such Code is amended by striking 15th and inserting last.

(iii)

Section 1362(d)(1)(C)(ii) of such Code is amended by striking such 15th day and inserting the last day of the 3d month thereof.

(3)

Conforming amendments relating to C corporations

(A)

Section 170(a)(2)(B) of such Code is amended by striking third month and inserting 4th month.

(B)

Section 563 of such Code is amended by striking third month each place it appears and inserting 4th month.

(C)

Section 1354(d)(1)(B)(i) of such Code is amended by striking 3d month and inserting 4th month.

(D)

Subsections (a) and (c) of section 6167 of such Code are each amended by striking third month and inserting 4th month.

(E)

Section 6425(a)(1) of such Code is amended by striking third month and inserting 4th month.

(F)

Subsections (b)(2)(A), (g)(3), and (h)(1) of section 6655 of such Code are each amended by striking 3rd month and inserting 4th month.

(4)

Effective date

The amendments made by this subsection shall apply to returns for taxable years beginning after December 31, 2015.

(b)

Modification of due dates by regulation

In the case of returns for taxable years beginning after December 31, 2013, the Secretary of the Treasury or the Secretary's delegate shall modify appropriate regulations to provide as follows:

(1)

The maximum extension for the returns of partnerships filing Form 1065 shall be a 6-month period beginning on the due date for filing the return (without regard to any extensions).

(2)

The maximum extension for the returns of trusts and estates filing Form 1041 shall be a 5½-month period beginning on the due date for filing the return (without regard to any extensions).

(3)

The maximum extension for the returns of employee benefit plans filing Form 5500 shall be an automatic 3½-month period beginning on the due date for filing the return (without regard to any extensions).

(4)

The maximum extension for the Forms 990 (series) returns of organizations exempt from income tax shall be an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions).

(5)

The maximum extension for the returns of organizations exempt from income tax that are required to file Form 4720 returns of excise taxes shall be an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions).

(6)

The maximum extension for the returns of trusts required to file Form 5227 shall be an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions).

(7)

The maximum extension for the returns of Black Lung Benefit Trusts required to file Form 6069 returns of excise taxes shall be an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions).

(8)

The maximum extension for a taxpayer required to file Form 8870 shall be an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions).

(9)

The due date of Form 3520–A, Annual Information Return of a Foreign Trust with a United States Owner, shall be the 15th day of the 4th month after the close of the trust's taxable year, and the maximum extension shall be a 6-month period beginning on such day.

(10)

The due date of FinCEN Form 114 (relating to Report of Foreign Bank and Financial Accounts) shall be April 15 with a maximum extension for a 6-month period ending on October 15, and with provision for an extension under rules similar to the rules of 26 C.F.R. 1.6081–5. For any taxpayer required to file such form for the first time, the Secretary of the Treasury may waive any penalty for failure to timely request or file an extension.

(11)

Taxpayers filing Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, shall be allowed to extend the time for filing such form separately from the income tax return of the taxpayer, for an automatic 6-month period beginning on the due date for filing the return (without regard to any extensions).

(c)

Corporations Permitted Statutory Automatic 6-Month Extension of Income Tax Returns

(1)

In general

Section 6081(b) of the Internal Revenue Code of 1986 is amended by striking 3 months and inserting 6 months.

(2)

Effective date

The amendment made by this section shall apply to returns for taxable years beginning after December 31, 2015.

III

Provisions related to start-up businesses

301.

Modification of application of rules for nonqualified deferred compensation plans

(a)

Rules only apply to plans of publicly traded companies

(1)

In general

Section 409A of the Internal Revenue Code of 1986 is amended by striking nonqualified deferred compensation plan each place it appears and inserting specified nonqualified deferred compensation plan.

(2)

Specified nonqualified deferred compensation plan

Section 409A(d)(1) of such Code is amended to read as follows:

(1)

Specified nonqualified deferred compensation plan

(A)

In general

The term specified nonqualified deferred compensation plan means any plan maintained by a specified employer for the deferral of compensation, other than—

(i)

a qualified employer plan, and

(ii)

any bona fide vacation leave, sick leave, compensatory time, disability pay, or death benefit plan.

(B)

Specified employer

For purposes of subparagraph (A), the term specified employer means any corporation—

(i)

the stock of which is publicly traded on an established securities market or otherwise, or

(ii)

which is a member of a controlled group of corporations (within the meaning of section 1563(a), determined without regard to section 1563(a)(4)) one of which is publicly traded on an established securities market.

.

(b)

Conforming amendments

(1)

The last sentence of section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986 is amended to read as follows: For purposes of the preceding sentence, a specified employee is a key employee (as defined in section 416(i) without regard to paragraph (5) thereof) of the employer..

(2)

The heading of section 409A of such Code is amended by inserting specified before nonqualified.

(3)

The item relating to section 409A in the table of sections for subpart A of part I of subchapter D of chapter 1 of such Code is by inserting specified before nonqualified.

(c)

Effective date

The amendments made by this section shall apply to amounts deferred after the date of the enactment of this Act.

302.

Reduction in holding period for qualified small business stock

(a)

In general

Paragraph (1) of section 1202(a) of the Internal Revenue Code of 1986 is amended by striking 5 years and inserting 3 years.

(b)

Conforming amendments

(1)

Paragraph (2) of section 1202(b) of such Code is amended by striking 5 years and inserting 3 years,

(2)

Subparagraph (A) of section 1202(g)(2) of such Code is amended by striking 5 years and inserting 3 years,

(3)

Subparagraph (C) of section 1202(h)(2) of such Code is amended by striking 5-year and inserting 3-year, and

(4)

Subparagraph (A) of section 1202(j)(1) of such Code is amended by striking 5 years and inserting 3 years.

(c)

Effective date

The amendments made by this section shall apply to stock issued after the date of the enactment of this Act.

303.

Extension of rollover period for qualified small business stock

(a)

In general

Paragraph (1) of section 1045(a) of the Internal Revenue Code of 1986 is amended by striking 60-day period and inserting 1-year period.

(b)

Conforming amendment

Paragraph (3) of section 1045(b) of such Code is amended by striking 60-day period and inserting 1-year period.

(c)

Effective date

The amendment made by this section shall apply to sales after the date of the enactment of this Act.