Section 1 Short title
This Act may be cited as the “Cut REDTAPE Act”.
Cut REDTAPE Act
A BILL
To amend the Internal Revenue Code of 1986 to cut and reduce excess and duplicative tax assessments and paperwork for entrepreneurs.
Sec. 2 Exemption of new small businesses from estimated income tax payments
Individuals— Section 6654 of the Internal Revenue Code of 1986 is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection:
“(n) Special rule for new small businesses
“(1) In general—No addition to tax shall be imposed under subsection (a) with respect to income from a new small business.
“(2) Income from a new small business—For purposes of paragraph (1), income from a new small business means, with respect to any individual, income from a trade or business if the gross receipts of such trade or business for the calendar year ending with or within the taxable year of the individual do not exceed $1,000,000.
“(3) Limited application—Paragraph (1) shall not apply to income from a new small business for any taxable year beginning after 2 years after the date on which the new small business is formed.
“(4) Controlled groups
“(A) In general—For purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single trade or business.
“(B) Inclusion of foreign corporations—For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.”
Corporations— Section 6655 of the Internal Revenue Code of 1986 is amended by redesignating subsection (j) as subsection (k) and by inserting after subsection (i) the following new subsection:
“(j) Special rule for new small businesses
“(1) In general—No addition to tax shall be imposed under subsection (a) with respect to income from a new small business.
“(2) Income from a new small business—For purposes of paragraph (1), income from a new small business means income from a trade or business if the gross receipts of such trade or business for the taxable year do not exceed $1,000,000.
“(3) Limited application—Paragraph (1) shall not apply to income from a new small business for any taxable year beginning after 2 years after the date on which the new small business is incorporated.
“(4) Controlled groups
“(A) In general—For purposes of this subsection, all persons treated as a single employer under subsection (a) or (b) of section 52 or subsection (m) or (o) of section 414 shall be treated as a single trade or business.
“(B) Inclusion of foreign corporations—For purposes of subparagraph (A), in applying subsections (a) and (b) of section 52 to this section, section 1563 shall be applied without regard to subsection (b)(2)(C) thereof.”
Effective date— The amendments made by this section shall apply to taxable years beginning after December 31, 2014.