under subsection (a), and (B) submits a return, during the correction window, reflecting such tax (as modified by this subsection), the first sentence of subsection (a) shall be applied by substituting 10 percent for 25 percent . (2) Correction window For purposes of this subsection, the term correction window means the period of time beginning on the date on which the tax under subsection (a) is imposed with respect to a shortfall of distributions from an individual retirement plan, and ending on the earlier of— (A) the date on which the Secretary initiates an audit, or otherwise demands payment, with respect to the shortfall of distributions, or (B) the last day of the second taxable year that begins after the end of the taxable year in which the tax under subsection (a) is imposed. . (d) Repeal of tax disqualification penalty (1) In general Paragraph (2) of subsection (e) of section 408 is repealed. (2) Conforming amendments (A) Section 408(e)(1) is amended by striking (2) or . (B) Sections 220(e)(2), 223(e)(2), and 530(e) are each amended by striking paragraphs (2) and (4) of section 408(e) and inserting section 408(e)(4) . (C) Section 4975(c)(3) is amended by striking the account ceases to be an individual retirement account by reason of the application of section 408(e)(2)(A) or if . (e) Statute of limitations Subsection (l) of section 6501 of the Internal Revenue Code of 1986 is amended— (1) in paragraph (1), by inserting (other than with respect to an individual retirement plan) after section 4975