Table Of ContentGeneral Explanations
of the
Administration's Revenue Proposals
Department of the Treasury
February 1998
%<M
LIBRARY
N*}- TABLE OF CONTENTS
, Ml
Make Child Care More Affordable
c ^
Expanding theChild andDependentCareTaxCredit
1
Employer Creditfor Expenses of Supporting Employee Child Care 3
Promote Energy Efficiency and Improye the Environment
Provide TaxCreditforEnergy-efficientBuilding Equipment 5
ProvideTaxCredit for PurchaseofNew Energy Efficient Homes 7
ProvideTaxCreditforHigh-fuel-economy Vehicles 8
Equalize Treatmentof Parking andTransitBenefits 10
ProvideInvestmentTax CreditFor
combinedHeatand Power (CHP) Systems 11
ProvideTaxCreditforReplacementOf
certain CircuitBreakerEquipment 13
ProvideTaxCreditfor Certain Perfluorocompound (PFC)
and Hydrofluorocarbon (HFC) Recycling Equipment 14
Provide TaxCreditforRooftop Solar Equipment 15
ExtendWindandBiomass TaxCredit 16
Promote Expanded Retirment Savings
ExpandedAccesstoPayroll Deduction for Retirement Savings 17
Small BusinessTax Credit for RetirementPlan Start-Up Expenses 18
The SmartPlan -- A SimplifiedPension Plan for Small Business 19
FasterVestingof Employer Matching Contributions 24
Pension Rightto Know Proposals 25
Simplified Method for Improving Benefits ofNonhighly Compensated
Employees underthe Safe Harbor for401(k) Plans 28
Simplify Definition of Highly Compensated Employee 30
SimplifyBenefitLimits forMultiemployerPlans under Section 415 31
SimplifyFull FundingLimitation forMultiemployerPlans 32
Eliminate Partial Termination Rules for Multiemployer Plans 33
Education Initiatives
Tax Credits forHoldersof Qualified School modernization Bonds
andQualifiedZoneAcademy Bonds 34
Exclusionfor Employer-ProvidedEducational Assistance 37
Eliminating Taxon Forgiveness of Direct StudentLoans SubjecttoIncome
ContingentRepayment 38
Low Income Housing Credit
Increase Low-IncomeHousing Tax Credit per Capita Cap 39
Extend Expiring Provisions
Extendthe Work OpportunityTax Credit 40
ExtendtheWelfare-to-Work Tax Credit 41
ExtendtheR&E TaxCredit 42
ExtendtheDeduction Provided For Contributionsof
Appreciated StocktoPrivate Foundations 43
MakePermanenttheExpenspng of Brownfields Remediation Costs 44
Miscellaneous Provisions
Extend andModify Puerto RicoTax Credit (Section 30A) 45
Specialized Small Business Investment CompanyTaxIncentives 46
Accelerateand ExpandIncentivesAvailableToTwo
New EmpowermentZones 48
Make First $2,000 of SeverancePay Exemptfrom IncomeTax 49
Simplify The TaxLaws
Optional Self-Employment Contributions Act (SECA)computations 50
Provide StatutoryHedging and Other Rulesto Ensure
business Property Is Treated as Ordinary Property 52
ClarifyRules Relating to Certain Disclaimers 54
Simplifythe ForeignTax CreditLimitation
forDividends from 10/50 Companies 55
InterestTreatment forDividendsPaid by Certain Regulated
investment companies to foreignpersons 57
Enhance Taxpayers' Rights
Suspend Collection by Levy DuringRefund Suit 58
Suspend Collection by LevyWhile Offer in Compromise Is Pending 59
Suspend Collectionto Permit Resolution of Disputes astoLiability 60
Require DistrictCounselApproval of Certain Third-Party Collection
Activities 61
Require Management Approval of Levies on Certain Assets 62
Require District Counsel Review of Jeopardy
and Termination Assessmenrs andJeopardy Levies 63
Require Management Approval of Sales of Perishable Goods 64
Codify Certain FairDebtCollection Procedures 65
ModifyPayment of Taxes 66
Require Disclosures Relating to Extension of Statutes of Limitation by
Agreement
67
Publish LivingAllowance Schedules Relatingto Offers in Compromise 68
EnsureAvailabilityof InstallmentAgreements 69
Increase Superpriority DollarLimits 70
Permit PersonalDeliveryof Section 6672(b)Notices 71
Allow TaxpayerstoQuashAll Third-Party Summonses 72
Require Disclosure of Criteria forExamination Selection 73
Prohibit ThreatofAuditto Coerce Tip Reporting
Alternative CommitmentAgreements 74
Permit Service of SummonsesbyMail 75
Allow Suits forDamagesIf TheIRS Violates
CertainBankruptcyProcedures 76
Increase TaxCourt's"Small Case"Limit 77
Provide Equitable Tolling 78
RequireNoticeof Deficiencyto Specify TaxCourtFiling Deadlines 79
AllowactionsforRefund with Respectto CertainEstates
Which HaveElectedtheInstallmentMethodofPayment 80
ExpandAuthoritytoAward Costs and Fees 81
ExpandAuthority toIssueTaxpayerAssistanceOrders 82
ProvideNewRemedyforThird Parties Who Claim That
theIRS Has FiledanErroneous Lien 83
AllowDamage SuitsbyPersons OtherthantheTaxpayer 85
Suspend Collection in Certain JointLiability Cases 86
Require Explanation ofJointand Several Liability 87
Relieve Innocent Spouseof Liabilityin Certain Cases 88
Allow "Global" InterestNetting of Under- and Over-Payments 90
FacilitateArchiving of IRS Records 91
Clarify Authorityto Prescribe Mannerof Making Elections 92
Grant IRS Broad AuthoritytoEnterinto Cooperative
agreements with statetaxing agencies 93
ProvideClinics forLow-Income Taxpayers 94
Provide Procedures forRelease of Field ServiceAdvice 95
Revenue Measures
DeferDeduction for InterestAnd OriginalIssue Discount
on Convertible Debt 97
Eliminate Dividends-Received Deduction forCertain Preferred Stock 98
Repeal Percentage Depletion forNon-Fuel Minerals Mined on
Federal andFormerly Federal Lands 100
Repeal Tax-Free Conversions of Large C Corporationsto S Corporations 101
. .
Replace Sales SourceRules with Activity-BasedRule 103
Modify Rules RelatingtoForeign Oil and Gas Extraction Income 104
Repeal Lowerof CostorMarket Inventory accounting Method 06
1
Increase PenaltiesforFailureto File Correct Information Returns 107
Tightenthe SubstantialUnderstatementPenalty for Large Corporations 108
.
Repeal Exemption for Withholding on Gambling Winnings
from Bingo and Keno in Excess of $5,000 109
Reinstate Oil SpillExcise Tax 110
ModifyDepositRequirementforFUTA Ill
Extend ProRata Disallowance of Tax-ExemptInterestExpense
thatAppliesto BankstoAllFinancialIntermediaries 112
Increasethe Proration Percentage for Property Casualty
(P&C) Insurance Companies 113
PrecludeCertainTaxpayersfromPrematurelyClaimingLossesfromReceivables
orfrom Creating Reserves for Bad Debts 114
Restrict SpecialNetOperating Loss Carryback Rules For
Specified Liability Losses 116
Freeze Grandfathered Status of StapledorPaired Share REITS 118
RestrictImpermissibleBusinesses Indirectly Conducted by REITS 119
ModifyTreatmentofClosely Held REITS 120
ModifyDepreciationMethod forTax-ExemptUseProperty 121
Impose Excise TaxonPurchase of Structured Settlements 122
ClarifyandExpandMath ErrorProcedures 123
Clarifythe Meaning of "SubjectTo"Liabilitiesunder Section 357(c) 125
Simplify FosterChildDefinition underEITC 127
Clarify Tie-BreakerRule under EITC 128
EliminateNon-Business Valuation Discounts 129
Eliminate "Crummey"Rule 130
Eliminate GiftTaxExemptionfor PersonalResidence Trusts 131
Include Qualified Terminable InterestProperty (QTIP)
trustAssetsin Surviving Spouse'sEstate 132
Apply 7.7 PercentCapitalization Rate to Credit Life Insurance Premiums ..133
Modify Corporate-OwnedLife Insurance (COLI) Rules 134
Modify Reserve Rules forAnnuityContracts 136
Tax Certain Exchanges of Insurance Contracts and
Reallocationsof Assets Within Variable Insurance Contracts 138
Reduce "InvestmentintheContract"for Mortality
and Expense Charges on Certain Insurance Contracts 140
Amend 80/20 Company Rules 142
Prescribe Regulatory DirectivetoAddressTaxAvoidance
involving Foreign Built-pnLosses 143
Prescribe Regulatory DirectivetoAddressTax
avoidance Through Useof Hybrids 144
ModifyForeign OfficeMaterial Participation Exception Applicable
to Inventory Sales attributable toNonresident'sU.S. Office 147
StopAbuse of CFC Exception to Ownership Requirements Of Section 883 ... 148
OtherMeasures Affecting Receipts
Reinstate EnvironmentalTaxImposedon Corporate Taxable
Income and Depositedinthe Hazardous Substance Superfund TrustFund ..150
Reinstate Excise Taxes Deposited fnThe hazardous
Substance SuperfundTrustFund 151
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Extend Excise Taxeson Gasoline, Diesel Fuel, and Special Motor Fuels 152
Convert Excise Taxes Deposited inthe Airportand Airwaytrust
Fund to Cost-Based UserFees Assessed for Federal Aviation
Administration (FAA) Services 153
