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PUBLIC LAW 103-66—AUG. 10, 1993 107 STAT. 481 "(ii) fails to include in such notices the amount allocable to exi)en(litures to which section 162(eXl) applies (determined on the basis of actual amounts rather than the reasonable estimates under paragraph (IXAXii)), then there is hereby imposed on such organization for such taxable year a tax in an amount equal to the product of the highest rate of tax imposed by section 11 for the taxable ^ear and the aggregate amount not included in such notices by reason of such election or failure. "(B) WAIVER WHERE FUTURE ADJUSTMENTS MADE.—The Secretary may waive the tax imposed by subparagraph (AXii) for any taxable year if the organization agrees to a4just its estimates under paragraph (IXAXii) for the fol- lowing taxable year to correct any failures. "(C) TAX TREATED AS INCOME TAX.—For purposes of this title, the tax imposed by subparagraph (A) shall be treated in the same manner as a tax imposed by chapter 1 (relating to income taxes). "(3) EXCEPTION WHERE DUES GENERALLY NONDEDUCTIBLE.— Paragraph (IXA) shall not apply to an organization which estab- lishes to the satisfaction of tne Secretary that substantially all of the dues or other similar amounts paid by persons to such organization are not deductible without regard to section 162(e).'' (d) CONFORMING AMENDMENT.—Section 7871(aX6) is amended 26 use 7871. by striking subparagraph (B) and by redesignating subparagraphs (C) and (D) as subparagraphs (B) ana (C), respectively. (e) EFFECTIVE DATE.—^The amendments made by this section 26USCi62note. shall apply to amounts paid or incurred after December 31, 1993. SEC. 13223. MARK TO MARKET ACCOUNTING METHOD FOR SECURI- TIES DEALERS. (a) GENERAL RULE.—Subpart D of part II of subchapter E of chapter 1 (relating to inventories) is amended by admng at the end thereof the following new section: "SEC. 476. MARK TO MARKET ACCOUNTING METHOD FOR DEALERS IN SECURITIES. "(a) GENERAL RULE.—^Notwithstanding any other provision of this subpart, the following rules shall apply to securities held by a dealer in securities: "(1) Any security which is inventory in the hands of the dealer shall be included in inventory at its fair market value. "(2) In the case of any security which is not inventory in the hands of the dealer and which is held at the close of any taxable year— "(A) the dealer shall recognize gain or loss as if such seciuity were sold for its fair market value on the last business day of such taxable year, and "(B) any gain or loss shall be taken into account for such taxable year. Proper adjustment shall be made in the amount of any gain or loss subsequently realized for gain or loss taken into account under the preceding sentence. "Hie Secretary may provide by regulations for the application of this paragraph at times other than the times provided in this paragraph. "(b) EXCEPTIONS.—