To amend the Internal Revenue Code of 1986 to provide for reporting by certain investors with respect to certain specified medical care providers.

I 116TH CONGRESS 2D SESSION H. R. 5825 To amend the Internal Revenue Code of 1986 to provide for reporting by certain investors with respect to certain specified medical care providers. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 10, 2020 Mr. NEAL 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 provide for reporting by certain investors with respect to certain specified medical care providers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. REPORTING BY CERTAIN INVESTORS WITH RE- 3 SPECT TO CERTAIN SPECIFIED MEDICAL 4 CARE PROVIDERS. 5 (a) IN GENERAL.—Subpart A of part III of sub- 6 chapter A of chapter 61 of the Internal Revenue Code of 7 1986 is amended by inserting after section 6039J the fol- 8 lowing new section: 9 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 5825 IH ‘‘SEC. 6039K. RETURNS BY CERTAIN INVESTORS WITH RE- 1 SPECT TO CERTAIN SPECIFIED MEDICAL 2 CARE PROVIDERS. 3 ‘‘(a) IN GENERAL.—Each reporting person with re- 4 spect to any specified medical care provider shall electroni- 5 cally file a separate annual return with respect to each 6 such medical care provider which contains the information 7 described in subsection (b). 8 ‘‘(b) INFORMATION REQUIRED.—With respect to 9 each specified medical care provider with respect to which 10 the person is a reporting person, such information as the 11 Secretary may require relating to each of the following: 12 ‘‘(1) GROSS RECEIPTS.— 13 ‘‘(A) Amounts received by the specified 14 medical care provider as reimbursement for any 15 item or service under title XVIII of the Social 16 Security Act. 17 ‘‘(B) Amounts received by the specified 18 medical care provider as reimbursement for any 19 item or service received under a State plan (or 20 waiver of such plan) under title XIX of the So- 21 cial Security Act. 22 ‘‘(C) Amounts not described in subpara- 23 graph (A) or (B) received by the specified med- 24 ical care provider pursuant to a negotiated rate 25 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 5825 IH with respect to any provider of health insur- 1 ance. 2 ‘‘(D) Amounts received by the specified 3 medical care provider in the sale of, or other ar- 4 rangement with respect to, any receivable aris- 5 ing in connection with the provision of medical 6 care. 7 ‘‘(E) Amounts not described in any pre- 8 ceding subparagraph of this paragraph which 9 are received by the specified medical care pro- 10 vider for the provision of medical care (and a 11 separate statement of such amounts which are 12 received from any provider of health insurance). 13 ‘‘(F) Gross receipts not described in any 14 preceding subparagraph of this paragraph (and 15 divided into such categories as the Secretary 16 may provide). 17 ‘‘(2) REAL ESTATE.— 18 ‘‘(A) The addresses of all real estate owned 19 or leased by the specified medical care provider. 20 ‘‘(B) Amounts paid as principal or interest 21 by the specified medical care provider on any 22 debt which is secured by real estate (and a sep- 23 arate statement of such amounts which are paid 24 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 5825 IH to the reporting person or any person related to 1 the reporting person). 2 ‘‘(C) Amounts paid by the specified med- 3 ical care provider as rent for real property (and 4 a separate statement of such amounts which 5 are paid to the reporting person or any person 6 related to the reporting person). 7 ‘‘(3) OTHER PAYMENTS TO RELATED PER- 8 SONS.— 9 ‘‘(A) Amounts paid as principal or interest 10 by the specified medical provider on any debt 11 not described in paragraph (2) to the reporting 12 person or any person related to the reporting 13 person. 14 ‘‘(B) Amounts paid by the specified med- 15 ical care provider as rent for any property other 16 than real property to the reporting person or 17 any person related to the reporting person. 18 ‘‘(C) Amounts not described in subpara- 19 graph (A) or (B) paid by the specified medical 20 care provider to the reporting person or any 21 person related to the reporting person (and di- 22 vided into such categories as the Secretary may 23 provide). 24 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 5825 IH ‘‘(4) OTHER INFORMATION.—Such other infor- 1 mation as the Secretary may reasonably require. 2 ‘‘(c) REPORTING PERSON.—For purposes of this sec- 3 tion— 4 ‘‘(1) IN GENERAL.—The term ‘reporting per- 5 son’ means, with respect to any specified medical 6 care provider, any person if— 7 ‘‘(A) such person holds an interest in such 8 specified medical care provider, 9 ‘‘(B) such person (or any person related to 10 such person) controls such specified medical 11 care provider, and 12 ‘‘(C) such person (or any person related to 13 such person) either— 14 ‘‘(i) is engaged in an applicable trade 15 or business with respect to which any in- 16 terest in such specified medical care pro- 17 vider is, directly or indirectly, an expanded 18 specified asset, or 19 ‘‘(ii) receives any service from any 20 person engaged in an applicable trade or 21 business described in clause (i). 22 ‘‘(2) APPLICABLE PARTNERSHIP INTEREST RE- 23 QUIREMENT.— 24 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 5825 IH ‘‘(A) IN GENERAL.—A person shall not be 1 treated as a reporting person with respect to 2 any specified medical care provider unless one 3 or more persons receive or hold an applicable 4 partnership interest with respect to the applica- 5 ble trade or business which is referred to in 6 paragraph (1)(C) with respect to such specified 7 medical care provider. 8 ‘‘(B) APPLICABLE PARTNERSHIP INTER- 9 EST.—The term ‘applicable partnership inter- 10 est’ has the meaning which would be given such 11 term by section 1061(c) if the term ‘applicable 12 trade or business’ had the meaning given such 13 term by paragraph (3) for purposes of such sec- 14 tion. 15 ‘‘(3) APPLICABLE TRADE OR BUSINESS.—The 16 term ‘applicable trade or business’ has the meaning 17 which would be given such term by section 18 1061(c)(2) if such section were applied by sub- 19 stituting ‘expanded specified assets’ for ‘specified as- 20 sets’ each place it appears therein. 21 ‘‘(4) EXPANDED SPECIFIED ASSETS.—The term 22 ‘expanded specified asset’ means any specified asset 23 (as defined in section 1061(c)(3)) and any interest 24 in a partnership. 25 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 5825 IH ‘‘(5) CONTROL.—For purposes of paragraph 1 (1)(B)— 2 ‘‘(A) except as provided in subparagraph 3 (B), control shall be determined under the rules 4 of paragraph (2) or (3) of section 6038(e), and 5 ‘‘(B) if the investment of any person de- 6 scribed in paragraph (1)(B) is coordinated with 7 the investment of any other person the invest- 8 ment of such other person shall be treated as 9 held by such person. 10 For purposes of subparagraph (B), investments of 11 persons shall not fail to be treated as coordinated if 12 contractual obligations exist (directly or indirectly) 13 between such persons with respect to such invest- 14 ments or the provision of any services in connection 15 with any applicable trade or business. 16 ‘‘(d) SPECIFIED MEDICAL CARE PROVIDER.—For 17 purposes of this section, the term ‘ specified medical care 18 provider’ means any corporation or partnership which— 19 ‘‘(1) is enrolled under section 1866(j) of the So- 20 cial Security Act, 21 ‘‘(2) is enrolled as a participating provider in a 22 State plan (or waiver of such plan) under title XIX 23 of such Act, or 24 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 5825 IH ‘‘(3) in the course of any trade or business 1 which includes the provision of medical care, em- 2 ploys any individual who is so enrolled or certified. 3 ‘‘(e) RELATED PERSONS.—For purposes of this sec- 4 tion, persons are related to each other if such persons are 5 described in section 267(b) or 707(b)(1), determined by 6 substituting ‘20 percent’ for ‘50 percent’ each place it ap- 7 pears in such sections. 8 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 9 such regulations or other guidance as may be necessary 10 to carry out the purposes of this section, including— 11 ‘‘(1) the time and manner of filing the return 12 required under subsection (a), 13 ‘‘(2) rules to prevent, to the extent practicable, 14 more than one person from being required to report 15 the same information, 16 ‘‘(3) rules to prevent the use of intermediaries, 17 agents, nominee ownership, and other arrangements 18 to avoid the application of this section, and 19 ‘‘(4) rules to require reporting of information to 20 any person by any person related to such person to 21 the extent that such information is necessary for 22 such person to determine if such person is a report- 23 ing person, or is required to be reported by such 24 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 5825 IH person under this section, and is not otherwise avail- 1 able to such person. 2 ‘‘(g) PUBLIC AVAILABILITY OF RETURNS.—Annual 3 returns filed under this section shall be made available by 4 the Secretary to the public as soon as practicable in a ma- 5 chine readable format.’’. 6 (b) PENALTY FOR FAILURE TO FILE COMPLETE AND 7 CORRECT RETURN.—Part II of subchapter B of chapter 8 68 of such Code is amended by adding at the end the fol- 9 lowing new section: 10 ‘‘SEC. 6726. FAILURE TO FILE CORRECT INFORMATION RE- 11 TURN WITH RESPECT TO SPECIFIED MED- 12 ICAL CARE PROVIDERS. 13 ‘‘(a) IN GENERAL.—In the case of any person’s fail- 14 ure to file a complete and correct return under section 15 6039K with respect to any specified medical care provider 16 (as defined in such section) at the time and in the manner 17 prescribed therefor, such person shall pay a penalty of 18 $5,000 for each such return for each day during which 19 such failure continues. 20 ‘‘(b) MAXIMUM PENALTY PER RETURN.—The max- 21 imum penalty under this section on failures with respect 22 to any 1 return shall not exceed $1,000,000. 23 ‘‘(c) DEFICIENCY PROCEDURES NOT TO APPLY.— 24 Subchapter B of chapter 63 (relating to deficiency proce- 25 VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 5825 IH dures for income, estate, gift, and certain excise taxes) 1 shall not apply with respect to the assessment or collection 2 of any penalty imposed by this section.’’. 3 (c) CLERICAL AMENDMENTS.— 4 (1) The table of sections for subpart A of part 5 III of subchapter A of chapter 61 of such Code is 6 amended by inserting after the item relating to sec- 7 tion 6039J the following new item: 8 ‘‘Sec. 6039K. Returns by certain investors with respect to certain specified medical care providers.’’. (2) The table of sections for part II of sub- 9 chapter B of chapter 68 of such Code is amended 10 by adding at the end the following new item: 11 ‘‘Sec. 6726. Failure to file correct information return with respect to specified medical care providers.’’. (d) EFFECTIVE DATE.—The amendments made by 12 this subsection shall apply to returns with respect to tax- 13 able years of specified medical care providers beginning 14 after the date of the enactment of this Act. 15 Æ VerDate Sep 11 2014 00:18 Feb 11, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H5825.IH H5825 kjohnson on DSK79L0C42PROD with BILLS