II 

118TH CONGRESS 

2D SESSION S. 4011 

To amend the Internal Revenue Code of 1986 to end the tax-free treatment 

of certain corporate reorganizations that involve large corporations. 

IN THE SENATE OF THE UNITED STATES 

MARCH 21, 2024 

Mr. WHITEHOUSE (for himself and Mr. VANCE) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to end the 

tax-free treatment of certain corporate reorganizations 

that involve large corporations. 

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 Subsidizing Giant 

5 Mergers Act’’. 


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1 SEC. 2. MODIFICATION OF RULES RELATING TO COR2 PORATE REORGANIZATIONS FOR CERTAIN 

3 LARGE CORPORATIONS. 

4 (a) ACQUISITIVE REORGANIZATIONS.—Section 

5 368(a)(2) of the Internal Revenue Code of 1986 is amend6 ed by adding at the end the following new subparagraph: 

7 ‘‘(I) SPECIAL RULES WITH RESPECT TO

8 CERTAIN ACQUISITIVE REORGANIZATIONS DE9 SCRIBED IN PARAGRAPH (1)(A), (1)(B), (1)(C), 

10 AND (1)(D).— 

11 ‘‘(i) IN GENERAL.—A merger, consoli12 dation, acquisition, or transfer which is de13 scribed in clause (ii) shall not be treated as 

14 a merger, consolidation, acquisition, or 

15 transfer described in paragraph (1)(A), 

16 (1)(B), (1)(C), or (1)(D). 

17 ‘‘(ii) TRANSACTIONS DESCRIBED.—A 

18 merger, consolidation, acquisition, or 

19 transfer is described in this clause if— 

20 ‘‘(I) such merger, consolidation, 

21 acquisition, or transfer is, or is treat22 ed as, the acquisition of the stock or 

23 assets of another corporation, 

24 ‘‘(II) such merger, consolidation, 

25 acquisition, or transfer is not excepted 

26 under clause (iii), and 


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1 ‘‘(III) the combined average an2 nual gross receipts of the acquiring 

3 corporation and the acquired corpora4 tion for the 3-taxable year period 

5 which precedes the taxable year in 

6 which the merger, consolidation, ac7 quisition, or transfer is completed ex8 ceeds $500,000,000. 

9 ‘‘(iii) EXCEPTIONS.—A merger, con10 solidation, acquisition, or transfer is ex11 cepted under this clause if— 

12 ‘‘(I) either the acquiring corpora13 tion or the acquired corporation con14 trols the other immediately before 

15 (and, if both corporations continue to 

16 exist, after) the merger, consolidation, 

17 acquisition, or transfer (as the case 

18 may be), 

19 ‘‘(II) any other corporation con20 trols both the acquiring corporation 

21 and the acquired corporation imme22 diately before (and, if both corpora23 tions continue to exist, after) the 

24 merger, consolidation, acquisition, or 

25 transfer (as the case may be), or 


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1 ‘‘(III) either the acquiring cor2 poration or the acquired corporation 

3 meets the gross receipts test of sec4 tion 448(c)(1) for the taxable year in 

5 which the merger, consolidation, ac6 quisition, or transfer is completed. 

7 ‘‘(iv) AGGREGATION AND OTHER SPE8 CIAL RULES.—Rules similar to the rules of 

9 paragraphs (2) and (3) of section 448(c) 

10 shall apply for purposes of clause (i)(II), 

11 except that (unless otherwise provided by 

12 the Secretary) the rules of section 

13 448(c)(2) shall not apply in determining 

14 the average annual gross receipts of the 

15 acquired corporation. 

16 ‘‘(v) INFLATION ADJUSTMENT.—In 

17 the case of any taxable year beginning 

18 after 2024, the dollar amount in clause 

19 (ii)(III) shall be increased by an amount 

20 equal to— 

21 ‘‘(I) such dollar amount, multi22 plied by 

23 ‘‘(II) the cost-of-living adjust24 ment determined under section 1(f)(3) 

25 for the calendar year in which such 


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1 taxable year begins, determined by 

2 substituting ‘calendar year 2023’ for 

3 ‘calendar year 2016’ in subparagraph 

4 (A)(ii) thereof. 

5 If any amount as increased under the pre6 ceding sentence is not a multiple of 

7 $1,000,000, such amount shall be rounded 

8 to the nearest multiple of $1,000,000. 

9 ‘‘(vi) REGULATIONS AND GUID10 ANCE.—The Secretary may prescribe such 

11 regulations and other guidance as are nec12 essary or appropriate to carry out, and to 

13 prevent the abuse of the purposes of, this 

14 subparagraph, including rules— 

15 ‘‘(I) to prevent the avoidance of 

16 the application of this subparagraph 

17 through the use of a series of trans18 actions designed and executed as 

19 parts of a unitary plan, and 

20 ‘‘(II) for the nonapplication of 

21 the rules of clause (i) where such non22 application is consistent with the pur23 poses of this subparagraph.’’. 

24 (b) TRANSFERS TO CORPORATIONS CONTROLLED BY

25 TRANSFERORS.—Section 351 is amended by redesignating 


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1 subsection (h) as subsection (i) and by inserting after sub2 section (g) the following new subsection: 

3 ‘‘(h) SPECIAL RULE WITH RESPECT TO MULTIPLE

4 TRANSFERORS.— 

5 ‘‘(1) IN GENERAL.—Subsection (a) shall not 

6 apply to any transfer of property by two or more 

7 persons which are corporations if the combined aver8 age annual gross receipts of such persons for the 3- 

9 taxable year period which precedes the taxable year 

10 of the transfer exceeds $500,000,000. 

11 ‘‘(2) EXCEPTION.—Clause (i) shall not apply 

12 if— 

13 ‘‘(A) such persons control the corporation 

14 to which the property is transferred imme15 diately before the transfer, 

16 ‘‘(B) another corporation controls all such 

17 persons and the corporation to which the prop18 erty is transferred immediately before the 

19 transfer, or 

20 ‘‘(C) all such persons meet the gross re21 ceipts test of section 448(c)(1) for the taxable 

22 year in which the transfer is made. 

23 ‘‘(3) AGGREGATION AND OTHER SPECIAL

24 RULES.—Rules similar to the rules of paragraphs 


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1 (2) and (3) of section 448(c) shall apply for pur2 poses of paragraph (1). 

3 ‘‘(4) INFLATION ADJUSTMENT.—In the case of 

4 any taxable year beginning after 2024, the dollar 

5 amount in paragraph (1) shall be increased by an 

6 amount equal to— 

7 ‘‘(A) such dollar amount, multiplied by 

8 ‘‘(B) the cost-of-living adjustment deter9 mined under section 1(f)(3) for the calendar 

10 year in which such taxable year begins, deter11 mined by substituting ‘calendar year 2023’ for 

12 ‘calendar year 2016’ in subparagraph (A)(ii) 

13 thereof. 

14 If any amount as increased under the preceding sen15 tence is not a multiple of $1,000,000, such amount 

16 shall be rounded to the nearest multiple of 

17 $1,000,000. 

18 ‘‘(5) REGULATIONS AND GUIDANCE.—The Sec19 retary may prescribe such regulations and other 

20 guidance as are necessary or appropriate to carry 

21 out, and to prevent the abuse of the purposes of, 

22 this subparagraph, including rules— 

23 ‘‘(A) to prevent the avoidance of the appli24 cation of this subsection through the use of a 


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1 series of transactions designed and executed as 

2 parts of a unitary plan, and 

3 ‘‘(B) for the nonapplication of the rules of 

4 paragraph (1) where such nonapplication is 

5 consistent with the purposes of this sub6 section.’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to transfers after the date of the 

9 enactment of this Act. 

Æ 


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