PUBLIC LAW 104-188—AUG. 20, 1996
110 STAT. 1825
the Secretary may waive all or part of the tax imposed by
this subsection.".
(b) EFFECTIVE DATE. —The amendment made by this section 26 USC 4971
shall take effect as if included in the amendment made by clause note,
(ii) of section 751(a)(9)(B) of the Retirement Protection Act of 1994
(108 Stat. 5020).
SEC. 1465. DATE FOR ADOPTION OF PLAN AMENDMENTS.
26 USC 401 note
If any amendment made by this subtitle requires an amendment to any plan or annuity contract, such amendment shall not
be required to be made before the first day of the first plan year
beginning on or after January 1, 1998, if—
(1) during the period after such amendment takes effect
and before such first plan year, the plan or contract is operated
in accordance with the requirements of such amendment, and
(2) such amendment applies retroactively to such period.
In the case of a governmental plan (as defined in section 414(d)
of the Internal Revenue Code of 1986), this section shall be applied
by substituting "2000" for "1998".
Subtitle E—Foreign Simplification
SEC. 1501. REPEAL OF INCLUSION OF CERTAIN EARNINGS INVESTED
IN EXCESS PASSIVE ASSETS.
(a) IN GENERAL.—
(1) REPEAL OF INCLUSION.— Paragraph (1) of section 951(a)
(relating to amounts included in gross income of United States
shareholders) is amended by striking subparagraph (C), by
striking "; and" at the end of subparagraph (B) and inserting
a period, and by adding "and" at the end of subparagraph
(A).
(2) REPEAL OF INCLUSION AMOUNT.— Section 956A (relating
to earnings invested in excess passive assets) is repealed.
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (G) of section 904(d)(3), as amended by
section 1703(i)(l), is amended by striking "subparagraph (B)
or (C) of section 951(a)(1)" and inserting "section 951(a)(1)(B)".
(2) Paragraph (1) of section 956(b) is amended to read
as follows:
"(1) APPLICABLE EARNINGS.—For purposes of this section,
the term 'applicable earnings' means, with respect to any controlled foreign corporation, the sum of—
"(A) the amount (not including a deficit) referred to
in section 316(a)(1), and
"(B) the amount referred to in section 316(a)(2),
but reduced by distributions made during the taxable year
and by earnings and profits described in section 959(c)(1).".
(3) Paragraph (3) of section 956(b) is amended to read
as follows:
"(3) SPECIAL RULE WHERE CORPORATION CEASES TO BE CON-
TROLLED FOREIGN CORPORATION. —I f any foreign corporation
ceases to be a controlled foreign corporation during any taxable
year—
"(A) the determination of any United States shareholder's pro rata share shall be made on the basis of stock
owned (within the meaning of section 958(a)) by such share-
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