Section 6662 of such Code is amended by adding at the end the following new subsection: (m) Application to substantial wealth tax valuation understatement (1) Substantial wealth tax valuation understatement defined (A) In general For purposes of this section, there is a substantial wealth tax valuation understatement if the value of any property claimed on any return of tax imposed by subtitle B–1 is 65 percent or less of the amount determined to be the correct amount of such valuation. (B) Limitation No penalty shall be imposed by reason of subsection (b)(10) unless the portion of the underpayment attributable to substantial wealth tax valuation understatements for the calendar year exceeds $5,000. (2) Increased penalty (A) In general In the case of any portion of an underpayment which is attributable to one or more substantial wealth tax valuation understatement, subsection (a) shall be applied— (i) in the case of a substantial wealth tax valuation understatement which is a gross wealth tax valuation misstatement, by substituting 50 percent for 20 percent , and (ii) in any other case, by substituting 30 percent for 20 percent . (B) Gross wealth tax valuation misstatement For purposes of subparagraph (A), the term gross wealth tax valuation misstatement means a substantial wealth tax valuation understatement, as determined under paragraph (1) by substituting 40 percent for 65 percent . . (e) Exemption of tax exempt entities Section 501(a) of such Code is amended by inserting and subtitle B–1 after this subtitle . (f) Clerical amendment The table of subtitles of such Code is amended by inserting after the item relating to subtitle B the following new item: Subtitle B–1—Wealth tax . (g) Effective date The amendments made by this section shall apply to calendar years beginning after the date of the enactment of this Act.