[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 2662 Introduced in Senate (IS)]
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114th CONGRESS
2d Session
S. 2662
To amend the Internal Revenue Code to include in income the
unrepatriated earnings of groups that include an inverted corporation.
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IN THE SENATE OF THE UNITED STATES
March 10, 2016
Mr. Brown (for himself, Mr. Durbin, and Mr. Schumer) introduced the
following bill; which was read twice and referred to the Committee on
Finance
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A BILL
To amend the Internal Revenue Code to include in income the
unrepatriated earnings of groups that include an inverted corporation.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Pay What You Owe Before You Go
Act''.
SEC. 2. RECAPTURE OF UNREPATRIATED EARNINGS OF GROUPS INCLUDING AN
INVERTED CORPORATION.
(a) In General.--Section 7874 of the Internal Revenue Code of 1986
is amended by redesignating subsection (g) as subsection (h) and by
inserting after subsection (f) the following new subsection:
``(g) Recapture of Tax on Unrepatriated Earnings.--
``(1) In general.--The subpart F income of any applicable
controlled foreign corporation for its last taxable year ending
before the acquisition date shall be increased by the
accumulated deferred foreign income of the corporation.
``(2) Applicable controlled foreign corporation.--For
purposes of this subsection--
``(A) In general.--The term `applicable controlled
foreign corporation' means any controlled foreign
corporation with respect to which--
``(i) a covered entity was a United States
shareholder at any time during the 5-year
period ending on the acquisition date, or
``(ii) a member of the same expanded
affiliated group as a covered entity was a
United States shareholder at any time during
the 5-year period ending on the acquisition
date.
``(B) Covered entity.--The term `covered entity'
means, with respect to a controlled foreign
corporation, any entity which--
``(i) is treated as a surrogate foreign
corporation under subsection (a)(2)(B),
determined--
``(I) by substituting `March 9,
2016' for `March 4, 2003' each place it
appears,
``(II) by substituting `more than
50 percent' for `at least 60 percent'
in clause (ii) thereof, and
``(III) by disregarding clause
(iii) thereof, and
``(ii) is not treated as a domestic
corporation by reason of subsection (b).
``(3) Accumulated deferred foreign income.--For purposes of
this section--
``(A) In general.--The term `accumulated deferred
foreign income' means the excess of--
``(i) the undistributed earnings of the
controlled foreign corporation, over
``(ii) the undistributed U.S. earnings of
such controlled foreign corporation.
``(B) Undistributed earnings.--The term
`undistributed earnings' means the earnings and profits
of the controlled foreign corporation described in
section 959(c)(3), determined--
``(i) as of the close of the taxable year
described in paragraph (1),
``(ii) without diminution by reason of
distributions made during such taxable year,
and
``(iii) without regard to this subsection.
For purposes of this chapter, any determination with
respect to the treatment of distributions described in
clause (ii) shall be made after the application of this
subsection to the earnings and profits described in the
matter preceding clause (i).
``(C) Undistributed u.s. earnings.--The term
`undistributed U.S. earnings' has the meaning given the
term `post-1986 undistributed U.S. earnings' in section
245(a)(5), determined--
``(i) as of the close of the taxable year
described in paragraph (1), and
``(ii) without regard to `post-1986' each
place it appears in the matter before
subparagraph (A).
``(4) Acquisition date.--For purposes of this section, the
term `acquisition date' means the date the covered entity
completes the acquisition described in subsection (a)(2)(B)(i)
(after the application of paragraph (2)(B)(i) of this
subsection).''.
(b) Effective Date.--The amendments made by this section shall
apply with respect to taxable years ending after March 9, 2016.
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