I 

114TH CONGRESS 

1ST SESSION H. R. 3812 

To amend the Internal Revenue Code of 1986 to provide for the identification 

of corporate tax haven countries and increased penalties for tax evasion 

practices in haven countries that ship United States jobs overseas, and 

for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 22, 2015 

Mr. MCNERNEY (for himself and Ms. LEE) introduced the following bill; which 

was referred to the Committee on Ways and Means, and in addition to 

the Committee on Oversight and Government Reform, for a period to be 

subsequently determined by the Speaker, in each case for consideration 

of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

for the identification of corporate tax haven countries 

and increased penalties for tax evasion practices in haven 

countries that ship United States jobs overseas, and for 

other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Outsourcing and 

5 Create American Jobs Act of 2015’’. 


emcdonald on DSK67QTVN1PROD with BILLS
2 

•HR 3812 IH

1 SEC. 2. IDENTIFYING CORPORATE TAX HAVEN COUNTRIES 

2 AND INCREASING PENALTIES FOR TAX EVA3 SION PRACTICES IN HAVEN COUNTRIES THAT 

4 SHIP UNITED STATES JOBS OVERSEAS. 

5 Not later than one year after the date of the enact6 ment of this Act, the Secretary of the Treasury shall de7 velop and publish a list of countries the Secretary deter8 mines to be corporate tax haven countries. In developing 

9 such list, the Secretary may consider the following criteria: 

10 (1) Tax rate in the country. 

11 (2) Lack of effective exchange of information 

12 between governments. 

13 (3) Lack of transparency in financial services 

14 sector. 

15 (4) Lack of requirements of substantial eco16 nomic activity. 

17 (5) Incentives which may encourage a United 

18 States corporation to invest abroad rather than do19 mestically. 

20 (6) Other factors deemed relevant by the Sec21 retary. 

22 The Secretary shall review and update such list every 3 

23 years. 


emcdonald on DSK67QTVN1PROD with BILLS
3 

•HR 3812 IH

1 SEC. 3. INCREASE IN PENALTIES FOR CORPORATE TAX 

2 EVASION PRACTICES CONCERNING RETURNS, 

3 DOCUMENTS, AND ACTIVITIES RELATING TO 

4 TAX HAVEN COUNTRIES. 

5 (a) ACCURACY-RELATED PENALTY ON UNDERPAY6 MENTS.—Section 6662 of the Internal Revenue Code of 

7 1986 is amended by adding at the end the following: 

8 ‘‘(l) INCREASE IN PENALTY IN CASE OF TAX HAVEN

9 COUNTRIES.— 

10 ‘‘(1) IN GENERAL.—In the case of any portion 

11 of an underpayment by a corporation for a taxable 

12 year which involves an undisclosed foreign financial 

13 asset located in a tax haven country at any time 

14 during such taxable year, subsection (a) shall be ap15 plied with respect to such portion by substituting ‘60 

16 percent’ for ‘20 percent’. 

17 ‘‘(2) TAX HAVEN COUNTRY.—For purposes of 

18 this subsection, the term ‘tax haven country’ means 

19 a country on the list published under section 2(a) of 

20 the Stop Outsourcing and Create American Jobs Act 

21 of 2015.’’. 

22 (b) UNDERSTATEMENTS WITH RESPECT TO RE23 PORTABLE TRANSACTIONS.—Section 6662A of such Code 

24 is amended by adding at the end the following: 

25 ‘‘(f) INCREASE IN PENALTY IN CASE OF TAX HAVEN

26 COUNTRIES.—In the case of any portion of a reportable 


emcdonald on DSK67QTVN1PROD with BILLS
4 

•HR 3812 IH

1 transaction understatement by a corporation for a taxable 

2 year which involves a transaction that originates, termi3 nates, or otherwise occurs in a tax haven country (as de4 fined in section 6662(l)(2)), subsection (a) shall be applied 

5 with respect to such portion by substituting ‘40 percent’ 

6 for ‘20 percent’.’’. 

7 (c) FRAUD PENALTY.—Section 6663 of such Code is 

8 amended by adding at the end the following: 

9 ‘‘(d) INCREASE IN PENALTY IN CASE OF TAX HAVEN

10 COUNTRIES.—In the case of any fraud by a corporation 

11 involving an activity occurring in a tax haven country (as 

12 defined in section 6662(l)(2)), subsection (a) shall be ap13 plied by substituting ‘100 percent’ for ‘75 percent’.’’. 

14 (d) ERRONEOUS CLAIM FOR CREDIT OR REFUND.— 

15 Section 6676 of such Code is amended by redesignating 

16 subsection (d) as subsection (e) and by inserting after sub17 section (c) the following new subsection: 

18 ‘‘(d) INCREASE IN PENALTY IN CASE OF TAX HAVEN

19 COUNTRIES.—In the case of claim or credit by a corpora20 tion for any excessive amount due for credits or refunds 

21 involving funds held or invested in a tax haven country 

22 (as defined in section 6662(l)(2)), subsection (a) shall be 

23 applied by substituting ‘40 percent’ for ‘20 percent’.’’. 

24 (e) WILLFUL ATTEMPT TO EVADE OR DEFEAT

25 TAX.—Section 7201 of such Code is amended by adding 


emcdonald on DSK67QTVN1PROD with BILLS
5 

•HR 3812 IH

1 at the end the following new sentence: ‘‘In the case of an 

2 attempt by a corporation which involves a tax haven coun3 try (as defined in section 6662(l)(2)), the preceding sen4 tence shall be applied by substituting ‘$1,000,000’ for 

5 ‘$500,000’.’’. 

6 (f) FRAUD AND FALSE STATEMENTS.—Section 7206 

7 of such Code is amended by adding at the end the fol8 lowing new sentence: ‘‘In the case of an offense by a cor9 poration described in the preceding sentence which in10 volves a tax haven country (as defined in section 

11 6662(l)(2)), the preceding sentence shall be applied by 

12 substituting ‘$1,000,000’ for ‘$500,000’.’’. 

13 (g) FRAUDULENT RETURNS, STATEMENTS, OR

14 OTHER DOCUMENTS.—Section 7207 of such Code is 

15 amended by adding at the end the following new sentence: 

16 ‘‘In the case of an offense by a corporation described in 

17 either of the two preceding sentences which involves a tax 

18 haven country (as defined in section 6662(l)(2)), the ap19 propriate sentence shall be applied by substituting 

20 ‘$150,000’ for ‘$50,000’.’’. 

21 (h) EFFECTIVE DATE.— 

22 (1) The amendments made by subsections (a) 

23 and (b) shall apply to underpayments attributable to 

24 transactions entered into after the date on which the 

25 list developed under section 2 is first published. 


emcdonald on DSK67QTVN1PROD with BILLS
6 

•HR 3812 IH

1 (2) The amendment made by subsection (c) 

2 shall apply to returns the due date for which (deter3 mined without regard to extensions) is after the date 

4 on which the list developed under section 2 is first 

5 published. 

6 (3) The amendment made by subsection (d) 

7 shall apply to refunds and credits attributable to 

8 transactions entered into after the date on which the 

9 list developed under section 2 is first published. 

10 (4) The amendment made by subsections (e), 

11 (f), and (g) shall apply to offenses committed after 

12 the date on which the list developed under section 2 

13 is first published. 

14 SEC. 4. PREFERENCES IN GOVERNMENT CONTRACTS. 

15 (a) PREFERENCE.—A Federal department or agency 

16 may give a preference in the award of a contract for the 

17 procurement of goods or services in a fiscal year to any 

18 potential contractor that has not engaged in outsourcing 

19 during the fiscal year preceding the fiscal year in which 

20 the contract is awarded. 

21 (b) REQUIREMENT TO REQUEST OUTSOURCING IN22 FORMATION FROM POTENTIAL CONTRACTORS.— 

23 (1) IN GENERAL.—In any solicitation for offers 

24 for a contract issued by a Federal department or 

25 agency in a fiscal year, the department or agency 


emcdonald on DSK67QTVN1PROD with BILLS
7 

•HR 3812 IH

1 shall request each offeror for the contract to provide 

2 information regarding whether the offeror engaged 

3 in outsourcing during the fiscal year preceding the 

4 fiscal year in which the contract is to be awarded. 

5 (2) PENALTY AND DEBARMENT.—Any offeror 

6 found to be in violation of paragraph (1), including 

7 making a false statement regarding the offeror’s en8 gagement in outsourcing— 

9 (A) shall, notwithstanding section 1001 of 

10 title 18, United States Code, be liable to the 

11 United States for a civil penalty in an amount 

12 not more than the value of the contract the of13 feror is seeking; and 

14 (B) shall be debarred, by the head of the 

15 department or agency soliciting the offer, from 

16 contracting with the Federal Government for a 

17 period of two years starting on the date on 

18 which the offeror is found to be in violation of 

19 paragraph (1). 

20 (3) EFFECTIVE DATE.—This subsection shall 

21 apply to solicitations for contracts issued on and 

22 after the date occurring one year after the date of 

23 the enactment of this Act. 

24 (c) OUTSOURCING DEFINED.—In this section, the 

25 term ‘‘outsourcing’’ means the laying off of a United 


emcdonald on DSK67QTVN1PROD with BILLS
8 

•HR 3812 IH

1 States worker from a job, and the hiring or contracting 

2 for the same job to be performed in a foreign country. 

3 SEC. 5. DEFICIT REDUCTION. 

4 Amounts which the Secretary of the Treasury esti5 mates are received in the Treasury by reason of this Act 

6 are hereby set aside for the reduction of the public debt. 

Æ 


emcdonald on DSK67QTVN1PROD with BILLS