I 

116TH CONGRESS 

2D SESSION H. R. 7309 

To prohibit certain assistance for inverted domestic corporations. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 24, 2020 

Mr. DOGGETT introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Financial Services, 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 prohibit certain assistance for inverted domestic 

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 ‘‘American Assistance 

5 for American Companies Act’’. 


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1 SEC. 2. PROHIBITION ON APPLICATION OF CERTAIN AS2 SISTANCE TO INVERTED DOMESTIC COR3 PORATIONS. 

4 (a) PROHIBITION ON USE OF CERTAIN TAX INCEN5 TIVES.— 

6 (1) NET OPERATING LOSS CARRYBACKS.— 

7 (A) IN GENERAL.—Section 172(b)(1)(D) 

8 of the Internal Revenue Code of 1986 is 

9 amended by adding at the end the following 

10 new clause: 

11 ‘‘(vi) SPECIAL RULE FOR INVERTED

12 DOMESTIC CORPORATIONS.—Clause (i) 

13 shall not apply to any foreign corporation 

14 for any taxable year in which such corpora15 tion is an inverted domestic corporation 

16 (as defined in section 7701(p)(2)), or to 

17 any member of the expanded affiliated 

18 group (as defined in section 7874(c)(1)) of 

19 such a foreign corporation, unless such for20 eign corporation has made an election 

21 under section 7701(p)(1).’’. 

22 (B) EFFECTIVE DATE.—The amendment 

23 made by this section shall take effect as if in24 cluded in section 2303(b) of the CARES Act. 

25 (2) INCREASED LIMITATION ON BUSINESS IN26 TEREST.— 


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1 (A) IN GENERAL.—Section 163(j)(10) of 

2 the Internal Revenue Code of 1986 is amended 

3 by adding at the end the following new sub4 paragraph: 

5 ‘‘(C) SPECIAL RULE FOR INVERTED DO6 MESTIC CORPORATIONS.—Subparagraphs (A) 

7 and (B) shall not apply to any foreign corpora8 tion for any taxable year in which such corpora9 tion is an inverted domestic corporation (as de10 fined in section 7701(p)(2)), or to any member 

11 of the expanded affiliated group (as defined in 

12 section 7874(c)(1)) of such a foreign corpora13 tion, unless such foreign corporation has made 

14 an election under section 7701(p)(1).’’. 

15 (B) EFFECTIVE DATE.—The amendment 

16 made by this section shall take effect as if in17 cluded in section 2306 of the CARES Act. 

18 (3) FEDERAL RESERVE EMERGENCY LENDING

19 FACILITIES.— 

20 (A) IN GENERAL.—No inverted domestic 

21 corporation, as defined in section 7701(p)(2) of 

22 the Internal Revenue Code of 1986, or any 

23 member of the expanded affiliated group (as de24 fined in section 7874(c)(1) of such Code) of 

25 such inverted domestic corporation, may particiVerDate Sep 11 2014 04:39 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7309.IH H7309

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1 pate in any program or facility established by 

2 the Board of Governors of the Federal Reserve 

3 System under the authority of section 13(3) of 

4 the Federal Reserve Act (12 U.S.C. 343) and 

5 with funding authorized under section 4003 of 

6 the CARES Act (Public Law 116–136), includ7 ing the Primary Market Corporate Credit Facil8 ity and the Secondary Market Corporate Credit 

9 Facility. 

10 (B) EXCEPTION.—Subparagraph (A) shall 

11 not apply if the inverted domestic corporation 

12 makes an election under section 7701(p)(1) of 

13 the Internal Revenue Code of 1986. 

14 (C) APPLICABILITY.—This paragraph shall 

15 apply to participation in any program or facility 

16 described in subparagraph (A) established be17 fore, on, or after the date of enactment of this 

18 Act. 

19 (b) ELECTION TO TREAT INVERTED DOMESTIC COR20 PORATIONS AS DOMESTIC CORPORATIONS.— 

21 (1) INVERTED DOMESTIC CORPORATIONS.—Sec22 tion 7701 of the Internal Revenue Code of 1986 is 

23 amended by redesignating subsection (p) as sub24 section (q) and by inserting after subsection (o) the 

25 following new subsection: 


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1 ‘‘(p) INVERTED DOMESTIC CORPORATIONS.— 

2 ‘‘(1) ELECTION TO BE TREATED AS A DOMES3 TIC CORPORATION.— 

4 ‘‘(A) IN GENERAL.—Notwithstanding pa5 ragraphs (4) and (5) of subsection (a), an in6 verted domestic corporation may elect to be 

7 treated as a domestic corporation for taxable 

8 years beginning with the last taxable year which 

9 begins before January 1, 2018. 

10 ‘‘(B) ELECTION.—An election under this 

11 subsection— 

12 ‘‘(i) shall be made not later than 30 

13 days after the date of the enactment of 

14 this subsection, and 

15 ‘‘(ii) once made, shall be irrevocable. 

16 ‘‘(C) TIME FOR FILING RETURNS AND PAY17 MENT OF TAXES.—Notwithstanding sections 

18 6072 and 6151, any return for any taxable year 

19 ending before the date described in subpara20 graph (B)(i), and any payment of taxes or pen21 alties, shall not be considered due before Janu22 ary 1, 2021. 

23 ‘‘(2) INVERTED DOMESTIC CORPORATION.—For 

24 purposes of this subsection, the term ‘inverted do25 mestic corporation’ means any foreign corporation 


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1 which, pursuant to a plan (or a series of related 

2 transactions)— 

3 ‘‘(A) completes after March 4, 2003, the 

4 direct or indirect acquisition of— 

5 ‘‘(i) substantially all of the properties 

6 held directly or indirectly by a domestic 

7 corporation, or 

8 ‘‘(ii) substantially all of the assets of, 

9 or substantially all of the properties consti10 tuting a trade or business of, a domestic 

11 partnership, and 

12 ‘‘(B) after the acquisition, either— 

13 ‘‘(i) more than 50 percent of the stock 

14 (by vote or value) of the corporation is 

15 held— 

16 ‘‘(I) in the case of an acquisition 

17 with respect to a domestic corpora18 tion, by former shareholders of the 

19 domestic corporation by reason of 

20 holding stock in the domestic corpora21 tion, or 

22 ‘‘(II) in the case of an acquisition 

23 with respect to a domestic partner24 ship, by former partners of the do25 mestic partnership by reason of holdVerDate Sep 11 2014 04:39 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H7309.IH H7309

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1 ing a capital or profits interest in the 

2 domestic partnership, or 

3 ‘‘(ii) the management and control of 

4 the expanded affiliated group which in5 cludes the corporation occurs, directly or 

6 indirectly, primarily within the United 

7 States, and such expanded affiliated group 

8 has significant domestic business activities. 

9 ‘‘(3) EXCEPTION FOR CORPORATIONS WITH

10 SUBSTANTIAL BUSINESS ACTIVITIES IN FOREIGN

11 COUNTRY OF ORGANIZATION.—Such term shall not 

12 include a foreign corporation described in paragraph 

13 (2) if after the acquisition the expanded affiliated 

14 group which includes the corporation has substantial 

15 business activities in the foreign country in which or 

16 under the law of which the corporation is created or 

17 organized when compared to the total business ac18 tivities of such expanded affiliated group. For pur19 poses of the preceding sentence, the term ‘substan20 tial business activities’ shall have the meaning given 

21 such term under regulations in effect on January 

22 18, 2017, except that the Secretary may issue regu23 lations increasing the threshold percent in any of the 

24 tests under such regulations for determining if busiVerDate Sep 11 2014 04:39 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H7309.IH H7309

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1 ness activities constitute substantial business activi2 ties for purposes of this paragraph. 

3 ‘‘(4) MANAGEMENT AND CONTROL.—For pur4 poses of paragraph (2)(B)(ii)— 

5 ‘‘(A) IN GENERAL.—The Secretary shall 

6 prescribe regulations for purposes of deter7 mining cases in which the management and 

8 control of an expanded affiliated group is to be 

9 treated as occurring, directly or indirectly, pri10 marily within the United States. The regula11 tions prescribed under the preceding sentence 

12 shall apply to periods after March 4, 2003. 

13 ‘‘(B) EXECUTIVE OFFICERS AND SENIOR

14 MANAGEMENT.—Such regulations shall provide 

15 that the management and control of an ex16 panded affiliated group shall be treated as oc17 curring, directly or indirectly, primarily within 

18 the United States if substantially all of the ex19 ecutive officers and senior management of the 

20 expanded affiliated group who exercise day-to21 day responsibility for making decisions involving 

22 strategic, financial, and operational policies of 

23 the expanded affiliated group are based or pri24 marily located within the United States. Indi25 viduals who in fact exercise such day-to-day reVerDate Sep 11 2014 04:39 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H7309.IH H7309

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1 sponsibilities shall be treated as executive offi2 cers and senior management regardless of their 

3 title. 

4 ‘‘(5) SIGNIFICANT DOMESTIC BUSINESS ACTIVI5 TIES.—For purposes of paragraph (2)(B)(ii), an ex6 panded affiliated group has significant domestic 

7 business activities if at least 25 percent of— 

8 ‘‘(A) the employees of the group are based 

9 in the United States, 

10 ‘‘(B) the employee compensation incurred 

11 by the group is incurred with respect to employ12 ees based in the United States, 

13 ‘‘(C) the assets of the group are located in 

14 the United States, or 

15 ‘‘(D) the income of the group is derived in 

16 the United States, 

17 determined in the same manner as such determina18 tions are made for purposes of determining substan19 tial business activities under regulations referred to 

20 in paragraph (3) as in effect on January 18, 2017, 

21 but applied by treating all references in such regula22 tions to ‘foreign country’ and ‘relevant foreign coun23 try’ as references to ‘the United States’. The Sec24 retary may issue regulations decreasing the thresh25 old percent in any of the tests under such regulaVerDate Sep 11 2014 04:39 Jul 11, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H7309.IH H7309

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1 tions for determining if business activities constitute 

2 significant domestic business activities for purposes 

3 of this paragraph. 

4 ‘‘(6) DEFINITIONS AND OTHER RULES.— 

5 ‘‘(A) EXPANDED AFFILIATED GROUP.— 

6 The term ‘expanded affiliated group’ has the 

7 meaning give such term under section 

8 7874(c)(1). 

9 ‘‘(B) OTHER RULES.—Rules similar to the 

10 rules of paragraphs (2), (3), (5), and (6) of sec11 tion 7874(c) shall apply for purposes of this 

12 subsection.’’. 

Æ 


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