Reversing the Expatriation of Profits Offshore Act
Latest action · Jun 28, 2002 Placed on Senate Legislative Calendar under General Orders. Calendar No. 465.
Progress
Where this bill reached, and when. A stage with no date was not reached; one that failed a vote and later carried shows the date it carried.
- IntroducedApr 11, 2002
- Passed SenateNot reached
- Passed HouseNot reached
- To the PresidentNot reached
- Became lawNot reached
Summary
Defines an "acquired entity" as a domestic corporation or partnership substantially all of the properties of which are acquired by a foreign incorporated entity, after which more than 50 percent but less than 80 percent of the stock (by vote or value) of the foreign incorporated entity is held by former shareholders (or partners) of the domestic corporation or partnership. Defines "inversion gains" as certain specified income or gain by reason of transfer of stock or other properties by an acquired entity as part of its acquisition by a foreign incorporated entity or by a "foreign related person" (defined as a foreign person who bears any of certain specified relationships with respect to an acquired entity or who is under the same common control as such entity).
Sets forth the following rules for inversion gains of acquired entities and party transactions of such entities: (1) to provide as a general rule that taxable income of an acquired entity (or any expanded affiliated group including such entity) cannot be less than the inversion gain; (2) that tax credits shall not be permitted to be used against tax on inversion gain (subject to specified conditions); (3) special rules for partnerships; (4) that the Secretary of the Treasury may provide that income or gain from transactions in the ordinary course of a trade or business not count as inversion gain to the extent such treatment is not inconsistent with the purposes of the purposes of this Act; (5) rules to coordinate this Act with section 172 and the minimum tax; and (6) that a three-year statutory period shall exist for the assessment of any deficiency attributable to the inversion gain of any taxpayer; (7) that such entities make a mandatory submission to the Secretary consisting of an annual prefiling, advance pricing, or other agreement specified by the Secretary, with specified penalties for failure to file; and (8) modifications of the limitation on interest deduction.
Excludes stock held by members of an expanded affiliated group which includes a foreign incorporated entity or stock of a foreign incorporated entity which is sold in a public offering related to a domestic acquisition by the entity from counting in determining ownership for purposes of the entity's classification as an inverted domestic corporation or an acquired entity. Invalidates certain transfers of properties or liabilities deemed to be aimed at avoiding this Act. Specifies that in cases covered under this Act involving domestic partnerships being bought, except as provided by regulations, all partnerships under common control shall be treated as one partnership. Directs the Secretary to prescribe regulations necessary to treat certain specified interests (including warrants and contracts to acquire stock) as stock and to treat stock as not stock.
Waives provisions of this Act dealing with acquisitions of domestic corporations or partnerships from applying to certain acquired entities substantially all of the properties of which are subsequently acquired by domestic corporations which have stock traded on an established securities market.
Directs the Secretary to issue regulations, including to prevent: (1) avoidance of portions of this Act through use of related persons, pass-through or other noncorporate entities, or other intermediaries; and (2) transactions designed to have individuals cease to be or not become members of expanded affiliated groups or related persons.
Provides for confidentiality of certain annual approval agreements on return positions for related party transactions by acquired entities (as well as for relevant background information) and exempts such transactions from open public inspection.
Requires the Secretary to submit with any report on advance pricing agreements required by Federal law a report regarding approval agreements covered under this Act, which shall be treated for confidentiality purposes in the same manner as reports on advanced pricing.
Specifies that the Secretary shall require entities involved in transactions to which this Act applies to report to the Secretary and other relevant persons as the Secretary prescribes such information as is necessary for proper tax treatment of such transactions.
(Sec. 3) Increases scope under which the Secretary may act to modify reinsurance agreements to take account of the amount of taxable income of each party, to take effect after April 11, 2002.
Cosponsors 11
Members who signed on, in the order they did. Signatures ran from Apr 11, 2002 to Sep 23, 2002; 1 is an original cosponsor, there from the day it was introduced.
| Seat | Cosponsor | Signed on | |
|---|---|---|---|
| D-MT | Max Baucus | Original | Apr 11, 2002 |
| D-CT | Christopher J. Dodd | May 14, 2002 | |
| I-CT | Joseph I. Lieberman | May 15, 2002 | |
| D-MN | Paul D. Wellstone | Jun 11, 2002 | |
| D-DE | Thomas R. Carper | Jun 13, 2002 | |
| R-AZ | John McCain | Jun 18, 2002 | |
| D-MO | Jean Carnahan | Jul 11, 2002 | |
| D-GA | Zell Miller | Jul 16, 2002 | |
| D-SD | Tim Johnson | Jul 18, 2002 | |
| R-ME | Susan M. Collins | Sep 3, 2002 | |
| D-IA | Tom Harkin | Sep 23, 2002 |
Committees 1
Where it was sent and what each committee and subcommittee did with it, in order.
| Chamber | Committee | What it did |
|---|---|---|
| Senate | Finance Committee | Referred Apr 11, 2002Markup Jun 18, 2002Reported Jun 28, 2002 |
Actions 6
Everything that happened, newest first.
- Jun 28, 2002Committee on Finance. Reported by Senator Baucus with an amendment in the nature of a substitute. With written report No. 107-188.
- Jun 28, 2002Placed on Senate Legislative Calendar under General Orders. Calendar No. 465.
- Jun 18, 2002Committee on Finance. Ordered to be reported with an amendment favorably.
- Apr 11, 2002Introduced in Senate
- Apr 11, 2002Sponsor introductory remarks on measure. (CR S2592)
- Apr 11, 2002Read twice and referred to the Committee on Finance. (text of measure as introduced: CR S2592-2594)
In the Congressional Record 1
Days the Record’s own index lists this bill, newest first, with the pages and the members it names. Pages starting H are the House, S the Senate, E Extensions of Remarks.
| Where | In the Record | Members | Date |
|---|---|---|---|
| Senate | Debate and remarks S2592–S2594Text printed S2592Explanations S2593 | Chuck Grassley R-IA (text), Max Baucus D-MT | Apr 11, 2002 |
Research
What has been written about this bill: committee reports, cost estimates, the sponsor’s authority statement, printed hearings and the Congressional Research Service’s work.
Committee report
Congressional Budget Office cost estimates 2
- Jul 15, 2002S. 2119, Reversing the Expatriation of Profits Offshore Act<p>Cost estimate for the bill as ordered reported by the Senate Committee on Finance on June 18, 2002</p>
- Jul 15, 2002S. 2119, Reversing the Expatriation of Profits Offshore ActCost estimate for the bill as ordered reported by the Senate Committee on Finance on June 18, 2002
Printed hearings 3
Hearings whose printed record names this bill, newest first: hearings on it, and wider hearings where it came up.
| Number | Hearing | Committee | Held |
|---|---|---|---|
| S. Hrg. 107-811 | CORPORATE INVERSION70 pages | Appropriations Committee | Oct 16, 2002 |
| Serial No. 107-75 | CORPORATE INVERSIONS78 pages | Ways and Means Committee | Jun 25, 2002 |
| Serial No. 107-73 | CORPORATE INVERSIONS52 pages | Ways and Means Committee | Jun 6, 2002 |
Titles 3
Every title it has carried, official and short, at each stage.
- Official Title as Introduced
- A bill to amend the Internal Revenue Code of 1986 to provide for the tax treatment of inverted corporate entities and of transactions with such entities, and for other purposes.
- Short Titles as Introduced
- Reversing the Expatriation of Profits Offshore Act
- Short Titles as Reported to Senate
- Reversing the Expatriation of Profits Offshore Act
Subjects
Assigned by the Library of Congress. Policy area: Taxation.
- Administrative procedure
- Administrative remedies
- Affiliated corporations
- Business income tax
- Capital gains tax
- Civil Rights and Liberties, Minority Issues
- Commerce
- Congress
- Congressional reporting requirements
- Corporate debt
- Corporate management
- Corporate mergers
- Corporation taxes
- Department of the Treasury
- Finance and Financial Sector
- Foreign corporations
- Foreign Trade and International Finance
- Freedom of information
- Government Operations and Politics
- Income tax
- Intangible property
- Interest
- Law
- Licenses
- Minimum tax
- Partnerships
- Reinsurance
- Stocks
- Tax administration
- Tax credits
- Tax deductions
- Tax evasion
- Tax havens
- Tax penalties
- Tax returns
- Taxation
- Taxation of foreign income
Text 2
Each version as it was printed, newest first.
- Jun 28, 2002Reported to Senate
- Apr 11, 2002Introduced in Senate
Everything here is as published by Congress: the summary is the Congressional Research Service's, the action wording is the clerks', and the subjects are the Library of Congress's. How far it got is read from the actions themselves, taking the most recent one of each kind, so a bill that failed a vote and later passed is shown as having passed. Records come from this bill on Congress.gov and govinfo.gov; cost estimates are the Congressional Budget Office's, and the hearings are the printed hearings GovInfo publishes, which can appear months after the hearing.
