MODIFICATIONS OF SUBSTANTIAL UNDERSTATEMENT PENALTY FOR NONREPORTABLE TRANSACTIONS.

SEC. 819. MODIFICATIONS OF SUBSTANTIAL UNDERSTATEMENT PENALTY FOR NONREPORTABLE TRANSACTIONS.(a) Substantial Understatement of Corporations.—Section 6662(d)(1)(B) (relating to special rule for corporations) is amended to read as follows: “(B) Special rule for corporations.—In the case of a corporation other than an S corporation or a personal holding company (as defined in section 542), there is a substantial understatement of income tax for any taxable year if the amount of the understatement for the taxable year exceeds the lesser of—“(i) 10 percent of the tax required to be shown on the return for the taxable year (or, if greater, $10,000), or “(ii) $10,000,000.”.(b) Secretarial List.—(1) In general.—Section 6662(d) is amended by adding at the end the following new paragraph:118 STAT. 1585 “(3) Secretarial list.—The Secretary may prescribe a list of positions which the Secretary believes do not meet the 1 or more of the standards specified in paragraph (2)(B)(i), section 6664(d)(2), and section 6694(a)(1). Such list (and any revisions thereof) shall be published in the Federal Register or the Internal Revenue Bulletin.”.(2) Conforming amendment.—Paragraph (2) of section 6662(d) is amended by striking subparagraph (D).(c) Effective Date.—The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.