I 

108TH CONGRESS 

1ST SESSION H. R. 2836

To amend the Internal Revenue Code of 1986 to reduce corporate refunds 

by fines and penalties imposed by reason of improper accounting or 

reporting practices or misstatements of its financial position. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 23, 2003

Mr. MEEKS of New York introduced the following bill; which was referred to 

the Committee on Ways and Means 

A BILL

To amend the Internal Revenue Code of 1986 to reduce 

corporate refunds by fines and penalties imposed by reason of improper accounting or reporting practices or 

misstatements of its financial position.

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 ‘‘Deadbeat Corporations 

5 Tax Accountability Act of 2003’’. 
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1 SEC. 2. REDUCTION OF CORPORATE REFUNDS BY FINES 

2 AND PENALTIES IMPOSED BY REASON OF IM3 PROPER ACCOUNTING OR REPORTING PRAC4 TICES OR MISSTATEMENTS OF ITS FINAN5 CIAL POSITION. 

6 (a) IN GENERAL.—Section 6402 of the Internal Rev7 enue Code of 1986 (relating to authority to make credits 

8 or refunds) is amended by adding the following new sub9 section: 

10 ‘‘(l) REDUCTION OF OVERPAYMENT IN CASE OF

11 OVERSTATED TAXABLE INCOME DUE TO ACCOUNTING

12 PRACTICES OR RELATED MISSTATEMENT OF FINANCIAL

13 POSITION.—

14 ‘‘(1) IN GENERAL.—Upon receiving notice from 

15 the Securities and Exchange Commission that a cor16 poration has not paid the full amount of a fine or 

17 penalty either imposed by a court of competent ju18 risdiction, or agreed to by the corporation, with re19 spect to—

20 ‘‘(A) the corporation’s accounting or re21 porting practices, or 

22 ‘‘(B) a related misstatement of its financial 

23 position, 

24 the Secretary shall reduce the amount of any over25 payment to be refunded to such corporation by such 

26 unpaid balance. 
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1 ‘‘(2) PRIORITIES FOR OFFSET.—Any overpay2 ment by a corporation shall be reduced pursuant to 

3 this subsection after such overpayment is reduced 

4 pursuant to subsection (a) with respect to any liabil5 ity for any internal revenue tax on the part of the 

6 person who made the overpayment, subsection (d) 

7 with respect to any past-due, legally enforceable debt 

8 owed to a Federal agency, subsection (e) with re9 spect to past-due, legally enforceable state income 

10 tax obligations, and before such overpayment is 

11 credited to the future liability for any Federal inter12 nal revenue tax of such person pursuant to sub13 section (b). 

14 ‘‘(3) REMITTANCE OF AMOUNT BY WHICH

15 OVERPAYMENT IS REDUCED.—The amount by which 

16 any overpayment is reduced under paragraph (1) 

17 shall be remitted by the Secretary to any 

18 disgorgement fund or account that has been estab19 lished under section 308 of Public Law 107–204, 

20 116 stat. 745 (2002) with respect to the corpora21 tion, or, if no such fund or account is established, 

22 retained by the Secretary. 

23 ‘‘(4) NOTIFICATION.—The Securities and Ex24 change Commission shall provide notice to the Sec25 retary within 30 days after—
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1 ‘‘(A) court approval of any settlement pro2 viding for less than full payment of a fine or 

3 penalty described in paragraph (1), or 

4 ‘‘(B) the Commission determines that such 

5 fine or penalty, or some portion thereof, has be6 come past due, whichever is earlier. 

7 ‘‘(5) TENTATIVE CARRYBACK ADJUSTMENTS.—

8 If a tentative refund or credit of tax under section 

9 6411 has been issued with respect to a corporation 

10 that has failed to fully pay a fine or penalty de11 scribed in paragraph (1), the amount of such unpaid 

12 balance shall constitute an excessive allowance of a 

13 tentative carryback adjustment that may be assessed 

14 as a deficiency in the manner set forth in section 

15 6213(b)(3) (relating to the assessment of an excess 

16 tentative carryback or refund adjustment as a math17 ematical or clerical error). 

18 ‘‘(6) REMITTANCE OF RECAPTURED TENTATIVE

19 CARRYBACK ADJUSTMENT.—The amount of any ten20 tative carryback adjustment assessed and collected 

21 pursuant to paragraph (5) shall be remitted or re22 tained by the Secretary in accordance with para23 graph (3). The remittance of any such amount to a 

24 fund or account described in paragraph (3) shall not 

25 result in an unpaid tax liability of the corporation. 
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1 ‘‘(7) COORDINATION WITH TITLE 11.—The Sec2 retary shall take such actions as may be necessary 

3 or appropriate to carry out the purposes of this sec4 tion where the corporation that has failed to pay the 

5 full amount of a fine or penalty described in para6 graph (1) is a debtor in a case under title 11 of the 

7 United States Code, including, but not limited to, 

8 the filing of an administrative expense claim for any 

9 amount that constitutes an excessive allowance of a 

10 tentative carryback adjustment.’’

11 (b) EFFECTIVE DATE.—This section shall be effec12 tive for fines and penalties imposed or agreed to with re13 spect to a corporation’s accounting or reporting practices, 

14 or a related misstatement of its financial position, that 

15 are not fully paid on the date of introduction of this Act, 

16 and for all such fines and penalties that later become un17 paid or past due.

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