# Pub. L. 105-277: changes to the Internal Revenue Code 1998-10-21, 112 Stat. 2681. Source: . ## Legislative history - Bill: [H.R. 4328](https://www.congress.gov/bill/105th-congress/house-bill/4328) - House report: [H. Rept. 105-648](https://www.govinfo.gov/content/pkg/CRPT-105hrpt648/html/CRPT-105hrpt648.htm) - Senate report: [S. Rept. 105-249](https://www.govinfo.gov/content/pkg/CRPT-105srpt249/html/CRPT-105srpt249.htm) - Conference report: [H. Rept. 105-825](https://www.govinfo.gov/content/pkg/CRPT-105hrpt825/html/CRPT-105hrpt825.htm) - Bluebook: [JCT general explanation (1998)](https://www.govinfo.gov/app/details/CPRT-105JPRT52240) ## § 1: Tax imposed - § 1(h): Pub. L. 105–277, § 4002(i)(1), substituted “paragraph (7)(A)(i)” for “paragraph (7)(A)” in introductory provisions. - § 1(h): Pub. L. 105–277, § 4002(i)(3), added subpar. (D). ## § 24: Child tax credit - § 24(d)(2): Pub. L. 105–277 substituted “For taxable years beginning after December 31, 1998, the credit” for “The credit”. ## § 26: Limitation based on tax liability; definition of tax liability - § 26(a): Pub. L. 105–277 inserted concluding provisions. ## § 41: Credit for increasing research activities - § 41(h)(1): Pub. L. 105–277 substituted “June 30, 1999” for “June 30, 1998” in subpar. (B) and substituted “36-month” for “24-month” and “36 months” for “24 months” in concluding provisions. ## § 45C: Clinical testing expenses for certain drugs for rare diseases or conditions - § 45C(b)(1): Pub. L. 105–277 substituted “June 30, 1999” for “June 30, 1998”. ## § 51: Amount of credit - § 51(c)(4): Pub. L. 105–277, § 1002(a), substituted “June 30, 1999” for “June 30, 1998”. - § 51(d)(6)(B)(i): Pub. L. 105–277, § 4006(c)(1), substituted “plan for employment” for “rehabilitation plan”. ## § 56: Adjustments in computing alternative minimum taxable income - § 56(a)(3): Pub. L. 105–277 substituted “section 460(b)(1)” for “section 460(b)(2)” and “section 460(b)(3)” for “section 460(b)(4)”. ## § 67: 2-percent floor on miscellaneous itemized deductions - § 67(b)(3): Pub. L. 105–277 substituted “for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d)” for “for losses described in subsection (c)(3) or (d) of section 165”. ## § 68: Overall limitation on itemized deductions - § 68: Pub. L. 105–277 substituted “for casualty or theft losses described in paragraph (2) or (3) of section 165(c) or for losses described in section 165(d)” for “for losses described in subsection (c)(3) or (d) of section 165”. ## § 86: Social security and tier 1 railroad retirement benefits - § 86(b)(2)(A): Pub. L. 105–277 inserted “221,” after “137,”. ## § 135: Income from United States savings bonds used to pay higher education tuition and fees - § 135(c)(4)(A): Pub. L. 105–277 inserted “221,” after “137,”. ## § 137: Adoption assistance programs - § 137(b)(3)(A): Pub. L. 105–277 inserted “221,” after “and sections”. ## § 146: Volume cap - § 146(d)(1): Pub. L. 105–277 added par. (1) and struck out heading and text of former par. (1). Text read as follows: “The State ceiling applicable to any State for any calendar year shall be the greater of— - § 146(d)(2): Pub. L. 105–277 added par. (2) and struck out heading and text of former par. (2). Text read as follows: “In the case of calendar years after 1987, paragraph (1) shall be applied by substituting— ## § 162: Trade or business expenses - § 162(l)(1)(B): Pub. L. 105–277 amended table in subpar. (B) generally. Prior to amendment, table read as follows: ## § 163: Interest - § 163(h)(2)(F): Pub. L. 105–277 added subpar. (F). ## § 170: Charitable, etc., contributions and gifts - § 170(e)(5): Pub. L. 105–277 struck out heading and text of subpar. (D). Text read as follows: “This paragraph shall not apply to contributions made— ## § 172: Net operating loss deduction - § 172(b)(1): Pub. L. 105–277, § 2013(c), inserted concluding provisions. - § 172(b)(1): Pub. L. 105–277, § 4003(h), added cl. (iv). - § 172(b)(1): Pub. L. 105–277, § 2013(a), added subpar. (G). - § 172(d)(4)(C): Pub. L. 105–277, § 4004(a), amended subpar. (C) generally. Prior to amendment, subpar. (C) read as follows: “any deduction allowable under section 165(c)(3) (relating to casualty losses) shall not be taken into account; and”. - § 172(f)(1): Pub. L. 105–277, § 3004(a), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “Any amount (not described in subparagraph (A)) allowable as a deduction under this chapter with respect to a liability which arises under a Federal or State law or out of any tort of the taxpayer if— - § 172: Pub. L. 105–277, § 2013(b), added subsec. (i) and redesignated former subsec. (i) as (j). ## § 219: Retirement savings - § 219(g)(3)(A)(ii): Pub. L. 105–277 inserted “221,” after “137,”. ## § 221: Interest on education loans - § 221(b)(2)(C): Pub. L. 105–277, § 4003(a)(2)(A)(iii), struck out concluding provisions which read as follows: “For purposes of sections 86, 135, 137, 219, and 469, adjusted gross income shall be determined without regard to the deduction allowed under this section.” - § 221(b)(2)(C)(i): Pub. L. 105–277, § 4003(a)(2)(A)(i), struck out “135, 137,” after “sections”. - § 221(b)(2)(C)(ii): Pub. L. 105–277, § 4003(a)(2)(A)(ii), inserted “135, 137,” after “sections 86,”. - § 221(e)(1): Pub. L. 105–277, § 4003(a)(3), inserted before period at end “or to any person by reason of a loan under any qualified employer plan (as defined in section 72(p)(4)) or under any contract referred to in section 72(p)(5)”. ## § 264: Certain amounts paid in connection with insurance contracts - § 264(f)(3): Pub. L. 105–277 inserted concluding provisions. ## § 332: Complete liquidations of subsidiaries - § 332(b): Pub. L. 105–277, § 3001(b)(1), substituted “this section” for “subsection (a)” in introductory provisions. - § 332(c): Pub. L. 105–277, § 3001(a), added subsec. (c). ## § 334: Basis of property received in liquidations - § 334(b)(1): Pub. L. 105–277 substituted “section 332” for “section 332(a)”. ## § 351: Transfer to corporation controlled by transferor - § 351(c)(2): Pub. L. 105–277 inserted “, or the fact that the corporation whose stock was distributed issues additional stock,” after “dispose of part or all of the distributed stock”. ## § 368: Definitions relating to corporate reorganizations - § 368(a)(2)(H)(ii): Pub. L. 105–277 inserted “, or the fact that the corporation whose stock was distributed issues additional stock,” after “dispose of part or all of the distributed stock”. ## § 408A: Roth IRAs - § 408A(c)(3)(C): Pub. L. 105–277 substituted “, and” for period at end. ## § 451: General rule for taxable year of inclusion - § 451(h): Pub. L. 105–277 added subsec. (h). ## § 469: Passive activity losses and credits limited - § 469(i)(3)(E)(iii): Pub. L. 105–277 amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “any amount allowable as a deduction under section 219, and”. ## § 873: Deductions - § 873(b)(1): Pub. L. 105–277 amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “The deduction for losses allowed by section 165(c)(3), but only if the loss is of property located within the United States.” ## § 953: Insurance income - § 953(a): Pub. L. 105–277, § 1005(b)(1)(A), amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: “For purposes of section 952(a)(1), the term ‘insurance income’ means any income which— - § 953(b)(3), § 953(b)(4): Pub. L. 105–277, § 1005(b)(3), added par. (3) and redesignated former par. (3) as (4). - § 953(e): Pub. L. 105–277, § 1005(b)(1)(B), added subsec. (e). ## § 954: Foreign base company income - § 954(c)(1)(B)(i): Pub. L. 105–277, § 1005(e), inserted “other than property which gives rise to income not treated as foreign personal holding company income by reason of subsection (h) or (i) for the taxable year” before comma at end. - § 954(c)(2)(C): Pub. L. 105–277, § 1005(c), amended heading and text of subpar. (C), generally. Prior to amendment, text read as follows: “Except as provided in subparagraph (A), (E), or (G) of paragraph (1) or by regulations, in the case of a regular dealer in property (within the meaning of paragraph (1)(B)), forward contracts, option contracts, or similar financial instruments (including notional principal contracts and all instruments referenced to commodities), there shall not be taken into account in computing foreign personal holding income any item of income, gain, deduction, or loss from any transaction (including hedging transactions) entered into in the ordinary course of such dealer’s trade or business as such a dealer.” - § 954(e)(2): Pub. L. 105–277, § 1005(d), inserted “or” at end of subpar. (A), substituted a period for “, or” at end of subpar. (B), and inserted concluding provisions. - § 954(e)(2): Pub. L. 105–277, § 4003(j), substituted “(h)(9)” for “(h)(8)”. - § 954(e)(2): Pub. L. 105–277, § 1005(d), struck out subpar. (C) which read as follows: “in the case of taxable years described in subsection (h)(9), the active conduct by a controlled foreign corporation of a banking, financing, insurance, or similar business, but only if the corporation is predominantly engaged in the active conduct of such business (within the meaning of subsection (h)(3)) or is a qualifying insurance company.” - § 954(h): Pub. L. 105–277, § 1005(a), amended heading and text of subsec. (h) generally. Prior to amendment, text consisted of pars. (1) to (9) relating to special rule for income derived in active conduct of banking, financing, or similar businesses, principles for determining applicable income, meaning of “predominantly engaged” for purposes of the special rule, methods of determining unearned premiums and reserves, definitions of certain terms for purposes of subsec. (h), anti-abuse rules, coordination with section 953 of this title, and taxable year applicability of subsec. (h). - § 954(i): Pub. L. 105–277, § 1005(b)(2), added subsec. (i). ## § 2001: Imposition and rate of tax - § 2001(f)(2): Pub. L. 105–277 inserted concluding provisions. ## § 2031: Definition of gross estate - § 2031(c)(10): Pub. L. 105–277, § 4006(c)(3), substituted “section 2057(e)(3)” for “section 2033A(e)(3)”. ## § 3121: Definitions - § 3121(b)(7)(C): Pub. L. 105–277 added Pub. L. 105–33, § 11246(b)(2)(A). See 1997 Amendment note below. ## § 4132: Definitions and special rules - § 4132(a)(1)(K): Pub. L. 105–277, § 3002(a), added a subpar. (K) identical to that added by Pub. L. 105–277, § 1503(a). See below. - § 4132(a)(1)(K): Pub. L. 105–277, § 1503(a), which directed amendment of section 4132(1) by adding a new subpar. (K) at the end, was repealed by Pub. L. 106–170, § 523(b)(1). ## § 6015: Relief from joint and several liability on joint return - § 6015(e)(3)(A): Pub. L. 105–277 substituted “of subsection (b) or (f)” for “of this section”. ## § 6033: Returns by exempt organizations - § 6033(c): Pub. L. 105–277 inserted “and” at end of par. (1), redesignated par. (3) as (2), and struck out former par. (2) which read as follows: “a copy of the notice required by section 6104(d) (relating to public inspection of private foundations’ annual returns), together with proof of publication thereof, shall be filed by the foundation together with the annual return under this section, and”. ## § 6103: Confidentiality and disclosure of returns and return information - § 6103(h)(5): Pub. L. 105–277, § 4002(a), redesignated par. (5), relating to Internal Revenue Service Oversight Board, as (6). - § 6103(h)(6): Pub. L. 105–277, § 4002(a), redesignated par. (5), relating to Internal Revenue Service Oversight Board, as (6). - § 6103(j)(5): Pub. L. 105–277, § 4006(a)(1), added par. (5). - § 6103(l)(13)(D): Pub. L. 105–277, § 1006, substituted “September 30, 2003” for “September 30, 1998”. - § 6103(p)(3)(A): Pub. L. 105–277, § 4002(h), inserted “(f)(5),” after “(c), (e),”. - § 6103(p)(4): Pub. L. 105–277, § 4006(a)(2), substituted “(j)(1), (2), or (5)” for “(j)(1) or (2)” in introductory provisions. - § 6103(p)(4)(F)(ii): Pub. L. 105–277, § 4006(a)(2), substituted “(j)(1), (2), or (5)” for “(j)(1) or (2)”. ## § 6104: Publicity of information required from certain exempt organizations and certain trusts - § 6104(d): Pub. L. 105–277 added subsec. (d) and struck out heading and text of former subsec. (d). Text read as follows: “The annual return required to be filed under section 6033 (relating to returns by exempt organizations) by any organization which is a private foundation within the meaning of section 509(a) shall be made available by the foundation managers for inspection at the principal office of the foundation during regular business hours by any citizen on request made within 180 days after the date of the publication of notice of its availability. Such notice shall be published, not later than the day prescribed for filing such annual return (determined with regard to any extension of time for filing), in a newspaper having general circulation in the county in which the principal office of the private foundation is located. The notice shall state that the annual return of the private foundation is available at its principal office for inspection during regular business hours by any citizen who requests it within 180 days after the date of such publication, and shall state the address and the telephone number of the private foundation’s principal office and the name of its principal manager.” - § 6104: Pub. L. 105–277 struck out subsec. (e), which consisted of pars. (1) to (3) relating to public inspection of certain annual returns and applications for exemption with a limitation of applicability of certain provisions. ## § 6159: Agreements for payment of tax liability in installments - § 6159(d): Pub. L. 105–277 redesignated subsec. (d), relating to cross reference, as (e). - § 6159(e): Pub. L. 105–277 redesignated subsec. (d), relating to cross reference, as (e). ## § 6213: Restrictions applicable to deficiencies; petition to Tax Court - § 6213(g)(2): Pub. L. 105–277, § 3003(a), inserted concluding provisions. - § 6213(g)(2)(L): Pub. L. 105–277, § 3003(b), added subpar. (L). ## § 6311: Payment of tax by commercially acceptable means - § 6311(d)(2): Pub. L. 105–277 substituted “under any such contract for the use of credit, debit, or charge cards for the payment of taxes imposed by subtitle A” for “under such contracts”. ## § 6404: Abatements - § 6404(h)(2): Pub. L. 105–277 inserted “Robert T. Stafford” before “Disaster”. ## § 6652: Failure to file certain information returns, registration statements, etc. - § 6652(c)(1)(C): Pub. L. 105–277, § 1004(b)(2)(B), substituted “section 6104(d) with respect to any annual return” for “subsection (d) or (e)(1) of section 6104 (relating to public inspection of annual returns)”. - § 6652(c)(1)(D): Pub. L. 105–277, § 1004(b)(2)(C), substituted “section 6104(d) with respect to any exempt status application materials (as defined in such section)” for “section 6104(e)(2) (relating to public inspection of applications for exemption)”. ## § 6654: Failure by individual to pay estimated income tax - § 6654(d)(1)(C)(i): Pub. L. 105–277 in table substituted items assigning applicable percentages of 105 for 1998 and 106 for 1999 or 2000 for item assigning applicable percentage of 105 for 1998, 1999, or 2000. ## § 6685: Assessable penalty with respect to public inspection requirements for certain tax-exempt organizations - § 6685: Pub. L. 105–277 struck out “or (e)” after “subsection (d)”. ## § 6693: Failure to provide reports on certain tax-favored accounts or annuities; penalties relating to designated nondeductible contributions - § 6693(a)(2)(C), § 6693(a)(2)(D): Pub. L. 105–277 substituted “section” for “Section”. ## § 7207: Fraudulent returns, statements, or other documents - § 7207: Pub. L. 105–277 struck out “or (e)” after “subsection (d)”. ## § 7421: Prohibition of suits to restrain assessment or collection - § 7421(a): Pub. L. 105–277 substituted “6015(e)” for “6015(d)” and inserted “6331(i),” after “6246(b),”. ## § 7443A: Special trial judges ## § 7491: Burden of proof - § 7491(a)(2): Pub. L. 105–277 inserted concluding provisions. ## § 9503: Highway Trust Fund - § 9503(f)(2): Pub. L. 105–277 amended par. (2) generally. Prior to amendment, par. (2) read as follows: “no interest accruing after September 30, 1998, on any obligation held by such Fund shall be credited to such Fund.” ## § 9510: Vaccine Injury Compensation Trust Fund - § 9510(b)(3): Pub. L. 105–277, § 4003(d)(2), added par. (3). - § 9510(b)(3): Pub. L. 105–277, § 1504(a)(2), which directed amendment of subsec. (b) by adding a new par. (3) at the end, was repealed by Pub. L. 106–170, § 523(b)(1). - § 9510(c)(1): Pub. L. 105–277, § 4003(d)(1), amended heading and text of par. (1) generally. Prior to amendment, text read as follows: “Amounts in the Vaccine Injury Compensation Trust Fund shall be available, as provided in appropriation Acts, only for the payment of compensation under subtitle 2 of title XXI of the Public Health Service Act (as in effect on the date of the enactment of this section) for vaccine-related injury or death with respect to vaccines administered after September 30, 1988, or for the payment of all expenses of administration (but not in excess of $6,000,000 for any fiscal year) incurred by the Federal Government in administering such subtitle.” - § 9510(c)(1): Pub. L. 105–277, § 1504(a)(1), which directed the general amendment of par. (1), was repealed by Pub. L. 106–170, § 523(b)(1).