A bill to amend the Internal Revenue Code of 1986 to allow certain entities to elect not to make changes in their taxable years required by the Tax Reform Act of 1986, and for other purposes.

[AI summary unavailable — showing source text] Amends the Internal Revenue Code to permit a partnership, S corporation, or personal service corporation, unless it is part of a tiered structure, to elect to have a taxable year other than the required one, but generally only if the deferral period of the taxable year elected is three months or less. (Current law requires partnerships, S corporations, and personal service corporations, in most cases, to conform their taxable years to the calendar years used by their owners.) Subjects the principals of a partnership or S corporation electing to change taxable years to additional estimated tax requirements to offset any tax deferral resulting from such election. Imposes deduction limitations on a personal service corporation that changes taxable years. Provides that an election with respect to taxable year shall be made by the partnership, S corporation, or personal service corporation and shall be binding on all partners and shareholders. Sets forth the formula for determining the additional tax requirement when a taxpayer: (1) is a partner or shareholder in at least one such entity during any applicable election years of the entity that end within the taxpayer's taxable year; and …