Page:United States Statutes at Large Volume 120.djvu/399

 120 STAT. 368

26 USC 911 note.

PUBLIC LAW 109–222—MAY 17, 2006

from the gross income of a taxpayer under subsection (a) for any taxable year, then, notwithstanding section 1 or 55— ‘‘(1) the tax imposed by section 1 on the taxpayer for such taxable year shall be equal to the excess (if any) of— ‘‘(A) the tax which would be imposed by section 1 for the taxable year if the taxpayer’s taxable income were increased by the amount excluded under subsection (a) for the taxable year, over ‘‘(B) the tax which would be imposed by section 1 for the taxable year if the taxpayer’s taxable income were equal to the amount excluded under subsection (a) for the taxable year, and ‘‘(2) the tentative minimum tax under section 55 for such taxable year shall be equal to the excess (if any) of— ‘‘(A) the amount which would be such tentative minimum tax for the taxable year if the taxpayer’s taxable excess were increased by the amount excluded under subsection (a) for the taxable year, over ‘‘(B) the amount which would be such tentative minimum tax for the taxable year if the taxpayer’s taxable excess were equal to the amount excluded under subsection (a) for the taxable year. For purposes of this subsection, the amount excluded under subsection (a) shall be reduced by the aggregate amount of any deductions or exclusions disallowed under subsection (d)(6) with respect to such excluded amount.’’. (d) EFFECTIVE DATE.—The amendments made by this section shall apply to taxable years beginning after December 31, 2005. SEC. 516. TAX INVOLVEMENT OF ACCOMMODATION PARTIES IN TAX SHELTER TRANSACTIONS.

(a) IMPOSITION OF EXCISE TAX.— (1) IN GENERAL.—Chapter 42 (relating to private foundations and certain other tax-exempt organizations) is amended by adding at the end the following new subchapter: ‘‘Subchapter F—Tax Shelter Transactions ‘‘Sec. 4965. Excise tax on certain tax-exempt entities entering into prohibited tax shelter transactions. ‘‘SEC. 4965. EXCISE TAX ON CERTAIN TAX-EXEMPT ENTITIES ENTERING INTO PROHIBITED TAX SHELTER TRANSACTIONS.

‘‘(a) BEING A PARTY TO AND APPROVAL OF PROHIBITED TRANSACTIONS.— ‘‘(1) TAX-EXEMPT ENTITY.— ‘‘(A) IN GENERAL.—If a transaction is a prohibited tax shelter transaction at the time any tax-exempt entity described in paragraph (1), (2), or (3) of subsection (c) becomes a party to the transaction, such entity shall pay a tax for the taxable year in which the entity becomes such a party and any subsequent taxable year in the amount determined under subsection (b)(1). ‘‘(B) POST-TRANSACTION DETERMINATION.—If any taxexempt entity described in paragraph (1), (2), or (3) of subsection (c) is a party to a subsequently listed transaction at any time during a taxable year, such entity shall pay

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