Modification of standards for awarding of costs and certain fees

(a) Small businesses eligible without regard to net worth Subparagraph (D) of section 7430(c)(4) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (i)(II), by striking the period at the end of clause (ii) and inserting, and, and by adding at the end the following new clause: (iii) in the case of an eligible small business, the net worth limitation in clause (ii) of such section shall not apply.. (b) Eligible small business Paragraph (4) of section 7430(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph: (F) Eligible small business (i) In general For purposes of subparagraph (D)(iii), the term eligible small business means, with respect to any proceeding commenced in a taxable year— (I) a corporation the stock of which is not publicly traded, (II) a partnership, or (III) a sole proprietorship, if the average annual gross receipts of such corporation, partnership, or sole proprietorship for the 3-taxable-year period preceding such taxable year does not exceed $50,000,000. For purposes of applying the test under the preceding sentence, rules similar to the rules of paragraphs (2) and (3) of section 448(c) shall apply. (ii) Adjustment for inflation In the case of any calendar year after 2025, the $50,000,000 amount in clause (i) shall be increased by an amount equal to— (I) such dollar amount, multiplied by (II) the cost-of-living adjustment determined under section 1(f)(3) for such calendar year, determined by substituting calendar year 2024 for calendar year 2016 in subparagraph (A)(ii) thereof. If any amount as increased under the preceding sentence is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500.. (c) Effective date The amendments made by this section shall apply to proceedings commenced after the date of the enactment of this Act.