Amends the Internal Revenue Code to modify requirements for the tax deduction for charitable contributions of easements on buildings in registered historic districts to require such easements to preserve the entire exterior of the building and to prohibit any change in the exterior of the buildings which is inconsistent with the historic character of such exterior. Imposes additional reporting, appraisal, and filing fee requirements.
Revises criteria for determining substantial and gross overstatements of valuations of charitable deduction property. Eliminates the reasonable cause exception for waiving penalties for such overstatements.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4534 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 4534
To amend the Internal Revenue Code of 1986 to reform the charitable
contribution deduction rules on contributions of certain easements on
buildings in registered historic districts, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 14, 2005
Mr. English of Pennsylvania 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 reform the charitable
contribution deduction rules on contributions of certain easements on
buildings in registered historic districts, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. REFORM OF CHARITABLE CONTRIBUTIONS OF CERTAIN EASEMENTS ON
BUILDINGS IN REGISTERED HISTORIC DISTRICTS.
(a) Special Rules With Respect to Buildings in Registered Historic
Districts.--Paragraph (4) of section 170(h) of the Internal Revenue
Code of 1986 (relating to definition of conservation purpose) is
amended by redesignating subparagraph (B) as subparagraph (C) and by
inserting after subparagraph (A) the following new subparagraph:
``(B) Special rules with respect to buildings in
registered historic districts.--In the case of any
contribution of a qualified real property interest
which is a restriction with respect to the exterior of
a building described in subparagraph (C)(ii), such
contribution shall not be considered to be exclusively
for conservation purposes unless--
``(i) such interest--
``(I) includes a restriction which
preserves the entire exterior of the
building (including the front, sides,
rear, and height of the building), and
``(II) prohibits any change in the
exterior of the building which is
inconsistent with the historical
character of such exterior,
``(ii) the donor and donee enter into a
written agreement certifying, under penalty of
perjury, that the donee--
``(I) is a qualified organization
(as defined in paragraph (3)) with a
purpose of environmental protection,
land conservation, open space
preservation, or historic preservation,
and
``(II) has the resources to manage
and enforce the restriction and a
commitment to do so, and
``(iii) in the case of any contribution
made in a taxable year beginning after the date
of the enactment of this subparagraph, the
taxpayer includes with the taxpayer's return
for the taxable year of the contribution--
``(I) a qualified appraisal (within
the meaning of subsection (f)(11)(E))
of the qualified property interest,
``(II) photographs of the entire
exterior of the building, and
``(III) a description of all
restrictions on the development of the
building.''.
(b) Filing Fee for Certain Contributions.--Subsection (f) of
section 170 of such Code (relating to disallowance of deduction in
certain cases and special rules) is amended by inserting at the end the
following new paragraph:
``(13) Contributions of certain interests in buildings
located in registered historic districts.--
``(A) In general.--No deduction shall be allowed
with respect to any contribution described in
subparagraph (B) unless the taxpayer includes with the
return for the taxable year of the contribution a $500
filing fee.
``(B) Contribution described.--A contribution is
described in this subparagraph if such contribution is
a qualified conservation contribution (as defined in
subsection (h)) which is a restriction with respect to
the exterior of a building described in subsection
(h)(4)(C)(ii) and for which a deduction is claimed in
excess of the greater of--
``(i) 3 percent of the fair market value of
the building (determined immediately before
such contribution), or
``(ii) $10,000.
``(C) Dedication of fee.--Any fee collected under
this paragraph shall be used for the enforcement of the
provisions of subsection (h).''.
(c) Effective Date.--
(1) Special rules for buildings in registered historic
districts.--The amendments made by subsection (a) shall apply
to contributions made after the date of the enactment of this
Act.
(2) Filing fee.--The amendment made by subsection (b) shall
apply to contributions made 180 days after the date of the
enactment of this Act.
SEC. 2. PROVISIONS RELATING TO SUBSTANTIAL AND GROSS OVERSTATEMENTS OF
VALUATIONS OF CHARITABLE DEDUCTION PROPERTY.
(a) Substantial and Gross Overstatements of Valuations of
Charitable Deduction Property.--
(1) In general.--Section 6662 of the Internal Revenue Code
of 1986 (relating to imposition of accuracy-related penalties)
is amended by adding at the end the following new subsection:
``(i) Special Rules for Charitable Deduction Property.--In the case
of charitable deduction property (as defined in section
6664(c)(3)(A))--
``(1) the determination under subsection (e)(1)(A) as to
whether there is a substantial valuation misstatement under
chapter 1 with respect to the value of the property shall be
made by substituting `150 percent' for `200 percent', and
``(2) the determination under subsection (h)(2)(A)(i) as to
whether there is a gross valuation misstatement with respect to
the value of the property shall be made by substituting `200
percent' for `400 percent' and by substituting `150 percent'
for `200 percent' in applying subsection (e)(1)(A) for purposes
of such determination.''.
(2) Elimination of reasonable cause exception for gross
misstatements.--Section 6664(c)(2) of such Code (relating to
reasonable cause exception for underpayments) is amended by
striking ``paragraph (1) shall not apply unless'' and inserting
``paragraph (1) shall not apply. The preceding sentence shall
not apply to a substantial valuation overstatement under
chapter 1 if''.
(b) Qualified Appraisers and Appraisals.--
(1) In general.--Subparagraph (E) of section 170(f)(11) of
such Code is amended to read as follows:
``(E) Qualified appraisal and appraiser.--For
purposes of this paragraph--
``(i) Qualified appraisal.--The term
`qualified appraisal' means, with respect to
any property, an appraisal of such property
which--
``(I) is treated for purposes of
this paragraph as a qualified appraisal
under regulations or other guidance
prescribed by the Secretary, and
``(II) is conducted by a qualified
appraiser in accordance with generally
accepted appraisal standards and any
regulations or other guidance
prescribed under subclause (I).
``(ii) Qualified appraiser.--Except as
provided in clause (iii), the term `qualified
appraiser' means an individual who--
``(I) has earned an appraisal
designation from a recognized
professional appraiser organization or
has otherwise met minimum education and
experience requirements set forth in
regulations prescribed by the
Secretary,
``(II) regularly performs
appraisals for which the individual
receives compensation, and
``(III) meets such other
requirements as may be prescribed by
the Secretary in regulations or other
guidance.
``(iii) Specific appraisals.--An individual
shall not be treated as a qualified appraiser
with respect to any specific appraisal unless--
``(I) the individual demonstrates
verifiable education and experience in
valuing the type of property subject to
the appraisal, and
``(II) the individual has not been
prohibited from practicing before the
Internal Revenue Service by the
Secretary under section 330(c) of title
31, United States Code, at any time
during the 3-year period ending on the
date of the appraisal.''.
(2) Reasonable cause exception.--Subparagraphs (B) and (C)
of section 6664(c)(3) of such Code are amended to read as
follows:
``(B) Qualified appraisal.--The term `qualified
appraisal' has the meaning given such term by section
170(f)(11)(E)(i).
``(C) Qualified appraiser.--The term `qualified
appraiser' has the meaning given such term by section
170(f)(11)(E)(ii).''.
(c) Effective Dates.--
(1) Misstatement penalties.--The amendments made by
subsection (a) shall apply to returns filed after the date of
the enactment of this Act.
(2) Appraiser provisions.--The amendments made by
subsection (b) shall apply to appraisals prepared with respect
to returns or submissions filed after the date of the enactment
of this Act.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Ways and Means.
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