A bill to delay the increase in the current year liability test for estimated tax purposes, to authorize the waiver of estimated tax penalties in certain cases, to change the date on which withholding certificates are required to take effect, and to revise the estimated tax provisions applicable to corporations.

Delays for one year, from 1987 until 1988, implementation of the increase from 80 percent to 90 percent in the current year liability test for estimated tax payments by individuals.

Authorizes the Secretary of the Treasury to waive individual estimated tax penalties for taxpayers filing a withholding allowance certificate (W-4 form) or W-4A form (revised W-4) by June 1, 1987.

Prohibits an addition to any tax imposed on underpayments of estimated tax installments by corporations due on or before June 15, 1987, under certain circumstances (thus permitting corporations to use their 1986 tax in determining certain estimated tax installment amounts).

Amends the Internal Revenue Code (IRC) to allow employers to elect to have revised withholding certificates put into effect more promptly than is required under current law.

Amends IRC provisions dealing with estimated income tax payments by corporations.

Establishes the amount of the penalty for underpayment of estimated tax at the amount of the underpayment for the period of underpayment, plus interest on such amount. Revises the schedule for the payment of estimated tax installments. Specifies that the amount of the required annual estimated tax payment shall be the lesser of: (1) 90 percent of the current tax shown on the taxpayer's return (corporations having a taxable income of at least $1,000,000 for any taxable year during a specified period must use this option); (2) 100 percent of the preceding year's tax liability; or (3) an amount equal to the tax computed at the rates applicable to the taxable year but based on the data and law relevant to the preceding taxable year. Permits lower estimated tax payments if the taxpayer can show that the installment payments or adjusted seasonal installments made over the year were adequate for each quarter based on annualized income and adjusted seasonal installment concepts described in this bill.

Exempts from an estimated tax penalty any taxpayer whose tax liability is less than $40.

Requires an addition to income tax when an adjustment of overpayment of estimated income tax by a corporation, made before the 15th day of the third month following the close of the taxable year, is found to be excessive.

Repeals provisions of the IRC dealing with installment payments of estimated income tax by corporations.