OTHER PROVISIONS RELATING TO TREATMENT OF STOCK AND DEBT; ETC.

SEC. 7208. OTHER PROVISIONS RELATING TO TREATMENT OF STOCK AND DEBT; ETC. (a) Clarification op Regulatory Authority Under Section 385.— (1) In general.—Subsection (a) of section 385 (relating to treatment of certain interests in corporations as stock or indebtedness) is amended by inserting “(or as in part stock and in part indebtedness)” before the period at the end thereof. (2) Regulations not to be applied retroactively.—Any regulations issued pursuant to the authority granted by the amendment made by paragraph (1) shall only apply with respect to instruments issued after the date on which the Secretary of the Treasury or his delegate provides public guidance as to the characterization of such instruments whether by regulation, ruling, or otherwise. (b) Reporting of Certain Acquisitions or Recapitalizations.— (1) In general.—Section 6043 is amended by striking subsection (c) and inserting the following new subsections: “(c) Changes in Control and Recapitalizations.—If— 103 STAT. 2338 “(1) control (as defined in section 304(c)(1)) of a corporation is acquired by any person (or group of persons) in a transaction (or series of related transactions), or “(2) there is a recapitalization of a corporation or other substantial change in the capital structure of a corporation, when required by the Secretary, such corporation shall make a return (at such time and in such manner as the Secretary may prescribe) setting forth the identity of the parties to the transaction, the fees involved, the changes in the capital structure involved, and such other information as the Secretary may require with respect to such transaction. “(d) Cross References.— “For provisions relating to penalties for failure to file— “(1) a return under subsection (b), see section 6652(c), or “(2) a return under subsection (c), see section 6652(1).” (2) Penalty.—Section 6652 is amended by redesignating subsection (l) as subsection (m) and by inserting after subsection (k) the following new subsection: “(l) Failure To File Return With Respect to Certain Corporate Transactions.—In the case of any failure to make a return required under section 6043(c) containing the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to file such return, an amount equal to $500 for each day during which such failure continues, but the total amount imposed under this subsection with respect to any return shall not exceed $100,000.” (3) Conforming amendments.— (A) The subsection heading for subsection (a) of section 6043 is amended by striking “Corporations” and inserting “Corporate Liquidating, Etc., Transactions”. (B) The section heading for section 6043 is amended to read as follows: “SEC. 6043. LIQUIDATING; ETC., TRANSACTIONS.” (C) The table of sections for subpart B of part III of subchapter A of chapter 61 is amended by striking the item relating to section 6043 and inserting the following: “Sec. 6043. Liquidating; etc., transactions.” (4) Effective date.—The amendments made by this subsection shall apply to transactions after March 31, 1990.