An act to amend the Internal Revenue Code of 1954 with respect to excise tax refunds in the case of certain uses of tread rubber, and for other purposes.

(House receded and concurred with an amendment in Senate amendments)

Amends the Internal Revenue Code to provide to tire manufacturers excise tax credits or refunds for tread rubber where tax-paid tread rubber is: (1) destroyed or wasted in the recapping or retreading process; (2) used in the recapping or retreading of tires the sales of which are later adjusted under a warranty or guarantee; or (3) used in the recapping or retreading of tires which are exported, used, or sold as supplies for vessels or aircraft, sold to State or local governments, or sold to nonprofit educational institutions.

Provides for excise tax credits or refunds on retreaded tires which have been sold by a subsequent manufacturer on or in connection with another article manufactured by him or her and exported or sold for specified purposes.

Provides that the period for allowing a credit or making a refund for tire tax or tread rubber tax filed as a result of a warranty or guarantee adjustment shall be one year from the date on which the adjustment is made.

Provides that tires which are exported from the United States, recapped or retreaded outside the United States, and imported into the United States shall be taxed as imported tread rubber to the extent that such rubber is used in the recapping or retreading.

Requires the Secretary of the Treasury, in administering Internal Revenue Code provisions with respect to nonrecognition of gain on the sale or exchange of a residence, to extend from two years to five years the nonrecognition qualification period in the case of an individual who: (1) sold his or her principal residence in 1977; (2) purchased property on which to construct a new principal residence; (3) commenced construction in the same year; (4) brought an action against the builder when the construction was terminated before completion; (5) suspended construction so that the partially constructed residence could be used as evidence in connection with the prosecution of such builder; and (6) obtained judgment but failed to meet statutory requirements with respect to occupancy of the new principal residence because of such suspension of construction.

Permits State taxing authorities which receive Federal tax return information to disclose such information to a State auditing agency for the purpose of auditing the tax authorities.

Excludes the Boundary County Restorium (popularly known as the Bonner's Ferry Restorium) in Bonner's Ferry, Idaho, from the definition of "public institution" under title XVI (Supplemental Security Income for the Aged, Blind and Disabled) of the Social Security Act, to the extent that otherwise residents of such Restorium would be denied supplemental security income payments.

Amends the Internal Revenue Code to exempt amounts paid as entertainment expenses which are includible in the gross income of the recipient, who is not an employee of the taxpayer, from the requirement that such expenses be shown to be directly related to the active conduct of the taxpayer's trade or business in order to qualify for tax deductibility.

Allows a credit against the excise tax on domestic or imported distilled spirits for each proof gallon of the wine and flavors contents of distilled spirits containing wine. Sets the amount of such credit: (1) at $10.50 for the flavors content; and (2), for the wine content, at the excess of $10.50 over the rate of the additional tax on such wine which would be imposed but for its removal to bonded premises. Specifies the points in time for determining the allowance of such credit for domestic and for imported distilled spirits. Denies such credit: (1) in the case of wine content, to any substance which has been subject to distillation at a distilled spirits plant after receipt in bond; and (2), in the case of flavors content, to alcohol derived from flavors made at a distilled spirits plant, and to any distilled spirits product to the extent that the flavors-derived alcohol exceeds two-and-a-half percent of the finished product.

Exempts properly bottled alcohol removed from bonded premises for industrial purposes from the requirement that the Federal tax be paid before such removal.