I 

115TH CONGRESS 

1ST SESSION H. R. 1931 

To amend the Internal Revenue Code of 1986 to discourage corporate inversions and to impose tax on unrepatriated earnings and unrecognized 

gains in connection with corporate expatriations. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 5, 2017 

Mr. DOGGETT (for himself, Mr. BLUMENAUER, Mr. CAPUANO, Mr. CARTWRIGHT, Ms. JUDY CHU of California, Mr. CICILLINE, Mr. COHEN, Mr. 

CONYERS, Mr. CUMMINGS, Mr. DEFAZIO, Ms. DELAURO, Mr. ELLISON, 

Mr. GARAMENDI, Mr. GENE GREEN of Texas, Mr. GRIJALVA, Ms. EDDIE

BERNICE JOHNSON of Texas, Mr. JOHNSON of Georgia, Ms. KAPTUR, 

Mr. KILDEE, Mr. LARSON of Connecticut, Ms. LEE, Mr. LEWIS of Georgia, Mr. LOEBSACK, Mr. LYNCH, Ms. MOORE, Mrs. NAPOLITANO, Ms. 

NORTON, Mr. POCAN, Mr. RASKIN, Ms. ROYBAL-ALLARD, Ms. SCHAKOWSKY, Ms. SLAUGHTER, Mr. THOMPSON of California, Mr. TONKO, 

Ms. VELA ́ZQUEZ, Mrs. WATSON COLEMAN, Mr. WELCH, Mr. GUTIE ́RREZ, 

Mr. YARMUTH, Mr. NADLER, Mr. SCOTT of Virginia, Mr. PAYNE, Ms. 

MCCOLLUM, Ms. PINGREE, Mr. PASCRELL, Mr. LIPINSKI, and Mr. SARBANES) 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 discourage 

corporate inversions and to impose tax on unrepatriated 

earnings and unrecognized gains in connection with corporate expatriations. 

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

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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Corporate EXpatriates 

3 and Inverters Tax Fairness Act’’ or as the ‘‘Corporate 

4 EXIT Fairness Act’’. 

5 SEC. 2. RULES TO DISCOURAGE CORPORATE INVERSIONS 

6 AND IMPOSE TAX ON UNREPATRIATED EARN7 INGS AND UNRECOGNIZED GAINS IN CON8 NECTION WITH CORPORATE EXPATRIATIONS. 

9 (a) RULES RELATING TO CORPORATE INVERSIONS

10 AND CORPORATE EXPATRIATIONS COMPLETED AFTER

11 JANUARY 4, 2017.—Subchapter C of chapter 80 of the 

12 Internal Revenue Code of 1986 is amended by adding at 

13 the end the following new section: 

14 ‘‘SEC. 7874A. RULES RELATING TO CORPORATE INVER15 SIONS AND CORPORATE EXPATRIATIONS. 

16 ‘‘(a) UNREPATRIATED EARNINGS AND UNRECOG17 NIZED GAINS IN CONNECTION WITH CORPORATE EXPA18 TRIATION.— 

19 ‘‘(1) IN GENERAL.—In the case of a corporate 

20 expatriation— 

21 ‘‘(A) the subpart F income of any applica22 ble controlled foreign corporation for its last 

23 taxable year ending before the acquisition date 

24 shall be increased by the accumulated deferred 

25 foreign income of such corporation, and 

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1 ‘‘(B) any gain position stock of any appli2 cable controlled foreign corporation which is 

3 held by an expatriated entity on the acquisition 

4 date shall be treated as sold on such date for 

5 its fair market value. 

6 ‘‘(2) RULES RELATED TO RECOGNITION OF

7 GAIN.— 

8 ‘‘(A) APPLICATION TO DISPOSITIONS DUR9 ING 5 YEARS BEFORE ACQUISITION DATE.—In 

10 the case of any disposition of gain position 

11 stock of any applicable controlled foreign cor12 poration by an expatriated entity at any time 

13 during the 5-year period ending on the acquisi14 tion date with respect to a corporate expatria15 tion, such disposition shall be treated as a sale 

16 of such stock for its fair market value and the 

17 period of limitation on assessment and collec18 tion of any tax with respect to such disposition 

19 under section 6501 or 6502 shall commence not 

20 earlier than the acquisition date. 

21 ‘‘(B) GAIN POSITION STOCK.—For pur22 poses of this subsection, the term ‘gain position 

23 stock’ means any stock if gain would arise from 

24 the sale of such stock. 

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1 ‘‘(C) GAIN TAKEN INTO ACCOUNT; PROPER

2 ADJUSTMENT.—Notwithstanding any other pro3 vision of this title, in the case of any sale under 

4 paragraph (1)(B) or (2)(A), any gain arising 

5 from such sale shall be taken into account for 

6 the taxable year of the sale. In the case of any 

7 sale under paragraph (1)(B), proper adjustment 

8 shall be made in the amount of any gain or loss 

9 subsequently realized for gain taken into ac10 count under the preceding sentence. 

11 ‘‘(b) FOREIGN PARENT TREATED AS DOMESTIC COR12 PORATION.—Notwithstanding section 7701(a)(4)— 

13 ‘‘(1) APPLICATION TO CORPORATE INVER14 SIONS.—In the case of a corporate inversion, the for15 eign corporation making the acquisition described in 

16 subsection (c)(1) shall be treated for purposes of 

17 this title as a domestic corporation. 

18 ‘‘(2) ELECTIVE APPLICATION TO CORPORATE

19 EXPATRIATIONS.—If the common parent of the ex20 panded affiliated group which includes the foreign 

21 corporation making the acquisition in a corporate 

22 expatriation elects the application of this paragraph 

23 and enters into an agreement with the Secretary 

24 providing the Secretary such assurances as the Sec25 retary may require that the application of paragraph 

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1 (1) will be administrable and enforceable with re2 spect to such corporation— 

3 ‘‘(A) such foreign corporation shall be 

4 treated for purposes of this title as a domestic 

5 corporation, and 

6 ‘‘(B) subsection (a) shall not apply with re7 spect to such corporate expatriation. 

8 ‘‘(c) CORPORATE INVERSION; CORPORATE EXPA9 TRIATION.—For purposes of this section— 

10 ‘‘(1) CORPORATE INVERSION.—The term ‘cor11 porate inversion’ means the direct or indirect acqui12 sition (pursuant to a plan or a series of related 

13 transactions) of substantially all of the assets of a 

14 domestic corporation or domestic partnership, sub15 stantially all of the trade or business assets of a do16 mestic corporation or domestic partnership, or sub17 stantially all of the United States trade or business 

18 assets of a foreign partnership, by a foreign corpora19 tion if— 

20 ‘‘(A) such acquisition is completed after 

21 January 4, 2017, 

22 ‘‘(B) after the acquisition the expanded af23 filiated group which includes the foreign cor24 poration does not have substantial business ac25 tivities in the foreign country in which, or 

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1 under the law of which, the foreign corporation 

2 is created or organized, when compared to the 

3 total business activities of such expanded affili4 ated group, and 

5 ‘‘(C) after the acquisition, either— 

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

7 (by vote or value) of the foreign corpora8 tion is held— 

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

10 with respect to a domestic corpora11 tion, by former shareholders of the 

12 domestic corporation by reason of 

13 holding stock in the domestic corpora14 tion, or 

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

16 with respect to a partnership, by 

17 former partners of the partnership by 

18 reason of holding a capital or profits 

19 interest in the partnership, or 

20 ‘‘(ii) the management and control of 

21 the expanded affiliated group which in22 cludes the foreign corporation occurs, di23 rectly or indirectly, primarily within the 

24 United States, and such expanded affilimstockstill on DSK30JT082PROD with BILLS

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1 ated group has significant domestic busi2 ness activities. 

3 ‘‘(2) CORPORATE EXPATRIATION.—The term 

4 ‘corporate expatriation’ means any acquisition which 

5 is not described in paragraph (1) but which would 

6 be so described if paragraph (1) were applied with7 out regard to subparagraphs (B) and (C) thereof. 

8 ‘‘(3) DETERMINATIONS WITH RESPECT TO MAN9 AGEMENT AND CONTROL AND BUSINESS ACTIVI10 TIES.— 

11 ‘‘(A) MANAGEMENT AND CONTROL.—For 

12 purposes of paragraph (1)(C)(ii)— 

13 ‘‘(i) IN GENERAL.—The Secretary 

14 shall prescribe regulations for purposes of 

15 determining cases in which the manage16 ment and control of an expanded affiliated 

17 group is to be treated as occurring, directly 

18 or indirectly, primarily within the United 

19 States. 

20 ‘‘(ii) EXECUTIVE OFFICERS AND SEN21 IOR MANAGEMENT.—Such regulations shall 

22 provide that the management and control 

23 of an expanded affiliated group shall be 

24 treated as occurring, directly or indirectly, 

25 primarily within the United States if submstockstill on DSK30JT082PROD with BILLS

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1 stantially all of the executive officers and 

2 senior management of the expanded affili3 ated group who exercise day-to-day respon4 sibility for making decisions involving stra5 tegic, financial, and operational policies of 

6 the expanded affiliated group are based or 

7 primarily located within the United States. 

8 Individuals who in fact exercise such day9 to-day responsibilities shall be treated as 

10 executive officers and senior management 

11 regardless of their title. 

12 ‘‘(B) SUBSTANTIAL BUSINESS ACTIVI13 TIES.—For purposes of paragraph (1)(B), the 

14 term ‘substantial business activities’ shall have 

15 the meaning given such term under regulations 

16 in effect on January 4, 2017, except that the 

17 Secretary may issue regulations increasing the 

18 threshold percent in any of the tests under such 

19 regulations for determining if business activities 

20 constitute substantial business activities for 

21 purposes of this subsection. 

22 ‘‘(C) SIGNIFICANT DOMESTIC BUSINESS

23 ACTIVITIES.—For purposes of paragraph 

24 (1)(C)(ii), an expanded affiliated group has sigmstockstill on DSK30JT082PROD with BILLS

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1 nificant domestic business activities if at least 

2 25 percent of— 

3 ‘‘(i) the employees of the group are 

4 based in the United States, 

5 ‘‘(ii) the employee compensation in6 curred by the group is incurred with re7 spect to employees based in the United 

8 States, 

9 ‘‘(iii) the assets of the group are lo10 cated in the United States, or 

11 ‘‘(iv) the income of the group is de12 rived in the United States, 

13 determined in the same manner as such deter14 minations are made for purposes of determining 

15 substantial business activities under regulations 

16 referred to in subparagraph (B) as in effect on 

17 January 4, 2017, but applied by treating all 

18 references in such regulations to ‘foreign coun19 try’ and ‘relevant foreign country’ as references 

20 to ‘the United States’. The Secretary may issue 

21 regulations decreasing the threshold percent in 

22 any of the tests under such regulations for de23 termining if business activities constitute sig24 nificant domestic business activities for pur25 poses of this subsection. 

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1 ‘‘(4) CERTAIN STOCK DISREGARDED.—There 

2 shall not be taken into account in determining own3 ership under paragraph (1)(C)(i)— 

4 ‘‘(A) stock held by members of the ex5 panded affiliated group which includes the for6 eign corporation, or 

7 ‘‘(B) stock of such foreign corporation 

8 which is sold in a public offering related to the 

9 acquisition described in the matter preceding 

10 subparagraph (A) of paragraph (1). 

11 ‘‘(5) PLAN DEEMED IN CERTAIN CASES.—If a 

12 foreign corporation completes an acquisition which 

13 would be described in paragraph (1) or (2) if such 

14 acquisition were pursuant to a plan and such acqui15 sition is completed— 

16 ‘‘(A) in the case of an acquisition which 

17 would be so described in paragraph (1), during 

18 the 4-year period beginning on the date which 

19 is 2 years before the ownership requirements of 

20 paragraph (1)(C)(i) are met, or 

21 ‘‘(B) in the case of an acquisition which 

22 would be so described in paragraph (2), during 

23 the 4-year period ending on the acquisition 

24 date, 

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1 such acquisition shall be treated as pursuant to a 

2 plan. 

3 ‘‘(6) CERTAIN TRANSFERS DISREGARDED.—The 

4 transfer of properties or liabilities (including by con5 tribution or distribution) shall be disregarded if such 

6 transfers are part of a plan a principal purpose of 

7 which is to avoid the purposes of this section. 

8 ‘‘(7) SPECIAL RULE FOR RELATED PARTNER9 SHIPS.—For purposes of applying paragraph 

10 (1)(C)(i) to the acquisition of a trade or business of 

11 a partnership, except as provided in regulations, all 

12 partnerships which are under common control (with13 in the meaning of section 482) shall be treated as 

14 1 partnership. 

15 ‘‘(8) REGULATIONS.—The Secretary shall pre16 scribe such regulations as may be appropriate to de17 termine whether any transaction or series of trans18 actions is a corporate inversion or corporate expa19 triation, including regulations— 

20 ‘‘(A) to treat warrants, options, contracts 

21 to acquire stock, convertible debt interests, and 

22 other similar interests as stock, and 

23 ‘‘(B) to treat stock as not stock. 

24 ‘‘(d) OTHER DEFINITIONS.—For purposes of this 

25 section— 

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1 ‘‘(1) ACCUMULATED DEFERRED FOREIGN IN2 COME.— 

3 ‘‘(A) IN GENERAL.—The term ‘accumu4 lated deferred foreign income’ means the excess 

5 of— 

6 ‘‘(i) the undistributed earnings of the 

7 controlled foreign corporation, over 

8 ‘‘(ii) the undistributed U.S. earnings 

9 of such controlled foreign corporation. 

10 ‘‘(B) UNDISTRIBUTED EARNINGS.—The 

11 term ‘undistributed earnings’ means the earn12 ings and profits of the controlled foreign cor13 poration described in section 959(c)(3), deter14 mined— 

15 ‘‘(i) as of the close of the taxable year 

16 described in subparagraph (A), 

17 ‘‘(ii) without diminution by reason of 

18 distributions made during such taxable 

19 year, and 

20 ‘‘(iii) without regard to this para21 graph. 

22 For purposes of this chapter, any determination 

23 with respect to the treatment of distributions 

24 described in clause (ii) shall be made after the 

25 application of this paragraph to the earnings 

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1 and profits described in the matter preceding 

2 clause (i). 

3 ‘‘(C) UNDISTRIBUTED U.S. EARNINGS.— 

4 The term ‘undistributed U.S. earnings’ has the 

5 meaning given the term ‘post-1986 undistrib6 uted U.S. earnings’ in paragraph (5) of section 

7 245(a), determined— 

8 ‘‘(i) as of the close of the taxable year 

9 described in subparagraph (A) of this 

10 paragraph, and 

11 ‘‘(ii) without regard to ‘post-1986’ 

12 each place it appears in the matter before 

13 subparagraph (A) of such paragraph (5). 

14 ‘‘(2) APPLICABLE CONTROLLED FOREIGN COR15 PORATION.—The term ‘applicable controlled foreign 

16 corporation’ means, with respect to any expatriated 

17 entity, any controlled foreign corporation with re18 spect to which such entity was a United States 

19 shareholder at any time during the 5-year period 

20 ending on the acquisition date. 

21 ‘‘(3) EXPATRIATED ENTITY.—The term ‘expa22 triated entity’ means— 

23 ‘‘(A) the corporation or partnership re24 ferred to in the matter preceding subparagraph 

25 (A) of subsection (c)(1) (including with respect 

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1 to the application of such subsection pursuant 

2 to subsection (c)(2)), and 

3 ‘‘(B) any United States person who is re4 lated (within the meaning of section 267(b) or 

5 707(b)(1)) to a corporation or partnership de6 scribed in subparagraph (A). 

7 ‘‘(4) ACQUISITION DATE.—The term ‘acquisi8 tion date’ means the date on which the acquisition 

9 described in paragraph (1) or (2) of subsection (c), 

10 as the case may be, is completed. 

11 ‘‘(5) EXPANDED AFFILIATED GROUP.—The 

12 term ‘expanded affiliated group’ means an affiliated 

13 group as defined in section 1504(a) but without re14 gard to section 1504(b)(3), except that section 

15 1504(a) shall be applied by substituting ‘more than 

16 50 percent’ for ‘at least 80 percent’ each place it ap17 pears. 

18 ‘‘(e) SPECIAL RULES.— 

19 ‘‘(1) CREDITS NOT ALLOWED AGAINST TAX ON

20 UNREPATRIATED EARNINGS AND UNRECOGNIZED

21 GAINS.—In the case of any expatriated entity and 

22 any United States shareholder of an applicable con23 trolled foreign corporation, credits (other than the 

24 credit allowed by section 901) shall be allowed 

25 against the tax imposed by chapter 1 on such entity 

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1 or corporation for any taxable year with respect to 

2 which any amount is included in income under sub3 section (a) only to the extent such tax exceeds the 

4 product of— 

5 ‘‘(A) the amount so included in income, 

6 and 

7 ‘‘(B) the highest rate of tax specified in 

8 section 11(b)(1). 

9 For purposes of determining the credit allowed by 

10 section 901, such income shall be treated as from 

11 sources within the United States. 

12 ‘‘(2) COORDINATION WITH SECTION 172 AND

13 MINIMUM TAX.—Rules similar to the rules of para14 graphs (3) and (4) of section 860E(a) shall apply 

15 for purposes of subsection (a). 

16 ‘‘(f) SPECIAL RULE FOR TREATIES.—Nothing in sec17 tion 894 or 7852(d) or in any other provision of law shall 

18 be construed as permitting an exemption, by reason of any 

19 treaty obligation of the United States heretofore or here20 after entered into, from the provisions of this section. 

21 ‘‘(g) REGULATIONS.—The Secretary shall provide 

22 such regulations as are necessary to carry out this section, 

23 including regulations providing for such adjustments to 

24 the application of this section as are necessary to prevent 

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1 the avoidance of the purposes of this section, including the 

2 avoidance of such purposes through— 

3 ‘‘(1) the use of related persons, pass-through or 

4 other noncorporate entities, or other intermediaries, 

5 or 

6 ‘‘(2) transactions designed to have persons 

7 cease to be (or not become) members of expanded 

8 affiliated groups or related persons.’’. 

9 (b) MODIFICATIONS TO RULES RELATING TO COR10 PORATE INVERSIONS COMPLETED ON OR BEFORE JANU11 ARY 4, 2017.— 

12 (1) IN GENERAL.—Subsection (b) of section 

13 7874 of the Internal Revenue Code of 1986 is 

14 amended to read as follows: 

15 ‘‘(b) INVERTED CORPORATIONS TREATED AS DO16 MESTIC CORPORATIONS.— 

17 ‘‘(1) IN GENERAL.—Notwithstanding section 

18 7701(a)(4), a foreign corporation shall be treated for 

19 purposes of this title as a domestic corporation if— 

20 ‘‘(A) such corporation would be a surro21 gate foreign corporation if subsection (a)(2) 

22 were applied by substituting ‘80 percent’ for 

23 ‘60 percent’, or 

24 ‘‘(B) such corporation is an inverted do25 mestic corporation. 

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

2 purposes of this subsection, a foreign corporation 

3 shall be treated as an inverted domestic corporation 

4 if, pursuant to a plan (or a series of related trans5 actions)— 

6 ‘‘(A) the entity completes after May 8, 

7 2014, and on or before January 4, 2017, the 

8 direct or indirect acquisition of— 

9 ‘‘(i) substantially all of the assets of a 

10 domestic corporation or domestic partner11 ship, 

12 ‘‘(ii) substantially all of the trade or 

13 business assets of a domestic corporation 

14 or domestic partnership, or 

15 ‘‘(iii) substantially all of the United 

16 States trade or business assets of a foreign 

17 partnership, and 

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

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

20 (by vote or value) of the entity is held— 

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

22 with respect to a domestic corpora23 tion, by former shareholders of the 

24 domestic corporation by reason of 

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1 holding stock in the domestic corpora2 tion, or 

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

4 with respect to a partnership, by 

5 former partners of the partnership by 

6 reason of holding a capital or profits 

7 interest in the partnership, or 

8 ‘‘(ii) the management and control of 

9 the expanded affiliated group which in10 cludes the entity occurs, directly or indi11 rectly, primarily within the United States, 

12 and such expanded affiliated group has 

13 significant domestic business activities. 

14 ‘‘(3) EXCEPTION FOR CORPORATIONS WITH

15 SUBSTANTIAL BUSINESS ACTIVITIES IN FOREIGN

16 COUNTRY OF ORGANIZATION.—A foreign corporation 

17 described in paragraph (2) shall not be treated as an 

18 inverted domestic corporation if after the acquisition 

19 the expanded affiliated group which includes the en20 tity has substantial business activities in the foreign 

21 country in which or under the law of which the enti22 ty is created or organized when compared to the 

23 total business activities of such expanded affiliated 

24 group. For purposes of subsection (a)(2)(B)(iii) and 

25 the preceding sentence, the term ‘substantial busimstockstill on DSK30JT082PROD with BILLS

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1 ness activities’ shall have the meaning given such 

2 term under regulations in effect on May 8, 2014, ex3 cept that the Secretary may issue regulations in4 creasing the threshold percent in any of the tests 

5 under such regulations for determining if business 

6 activities constitute substantial business activities for 

7 purposes of this paragraph. 

8 ‘‘(4) MANAGEMENT AND CONTROL.—For pur9 poses of paragraph (2)(B)(ii)— 

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

11 prescribe regulations for purposes of deter12 mining cases in which the management and 

13 control of an expanded affiliated group is to be 

14 treated as occurring, directly or indirectly, pri15 marily within the United States. The regula16 tions prescribed under the preceding sentence 

17 shall apply to periods after May 8, 2014. 

18 ‘‘(B) EXECUTIVE OFFICERS AND SENIOR

19 MANAGEMENT.—Such regulations shall provide 

20 that the management and control of an ex21 panded affiliated group shall be treated as oc22 curring, directly or indirectly, primarily within 

23 the United States if substantially all of the ex24 ecutive officers and senior management of the 

25 expanded affiliated group who exercise day-tomstockstill on DSK30JT082PROD with BILLS

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1 day responsibility for making decisions involving 

2 strategic, financial, and operational policies of 

3 the expanded affiliated group are based or pri4 marily located within the United States. Indi5 viduals who in fact exercise such day-to-day re6 sponsibilities shall be treated as executive offi7 cers and senior management regardless of their 

8 title. 

9 ‘‘(5) SIGNIFICANT DOMESTIC BUSINESS ACTIVI10 TIES.—For purposes of paragraph (2)(B)(ii), an ex11 panded affiliated group has significant domestic 

12 business activities if at least 25 percent of— 

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

14 in the United States, 

15 ‘‘(B) the employee compensation incurred 

16 by the group is incurred with respect to employ17 ees based in the United States, 

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

19 the United States, or 

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

21 the United States, 

22 determined in the same manner as such determina23 tions are made for purposes of determining substan24 tial business activities under regulations referred to 

25 in paragraph (3) as in effect on May 8, 2014, but 

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1 applied by treating all references in such regulations 

2 to ‘foreign country’ and ‘relevant foreign country’ as 

3 references to ‘the United States’. The Secretary may 

4 issue regulations decreasing the threshold percent in 

5 any of the tests under such regulations for deter6 mining if business activities constitute significant 

7 domestic business activities for purposes of this 

8 paragraph.’’. 

9 (2) CONFORMING AMENDMENTS.— 

10 (A) Clause (i) of section 7874(a)(2)(B) of 

11 such Code is amended by striking ‘‘after March 

12 4, 2003,’’ and inserting ‘‘after March 4, 2003, 

13 and before May 9, 2014,’’. 

14 (B) Subsection (c) of section 7874 of such 

15 Code is amended— 

16 (i) in paragraph (2)— 

17 (I) by striking ‘‘subsection 

18 (a)(2)(B)(ii)’’ and inserting ‘‘sub19 sections (a)(2)(B)(ii) and 

20 (b)(2)(B)(i)’’, and 

21 (II) by inserting ‘‘or (b)(2)(A)’’ 

22 after ‘‘(a)(2)(B)(i)’’ in subparagraph 

23 (B), 

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1 (ii) in paragraph (3), by inserting ‘‘or 

2 (b)(2)(B)(i), as the case may be,’’ after 

3 ‘‘(a)(2)(B)(ii)’’, 

4 (iii) in paragraph (5), by striking 

5 ‘‘subsection (a)(2)(B)(ii)’’ and inserting 

6 ‘‘subsections (a)(2)(B)(ii) and 

7 (b)(2)(B)(i)’’, and 

8 (iv) in paragraph (6), by inserting ‘‘or 

9 inverted domestic corporation, as the case 

10 may be,’’ after ‘‘surrogate foreign corpora11 tion’’. 

12 (c) TECHNICAL AND CONFORMING AMENDMENTS

13 RELATED TO STOCK COMPENSATION OF INSIDERS IN EX14 PATRIATED CORPORATIONS.— 

15 (1) Section 4985(a)(1) of such Code is amended 

16 by striking ‘‘section 1(h)(1)(C)’’ and inserting ‘‘sec17 tion 1(h)(1)(D)’’. 

18 (2) Section 4985(c) of such Code is amended by 

19 inserting ‘‘or section 7874A(c)(1) (without regard to 

20 subparagraph (C) thereof)’’ after ‘‘section 

21 7874(a)(2)(B)(i)’’. 

22 (3) Section 4985(e)(2)(A) of such Code is 

23 amended by inserting ‘‘or section 7874A(d)(3)’’ 

24 after ‘‘section 7874(a)(2)’’. 

25 (d) CLERICAL AMENDMENTS.— 

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1 (1) The heading for section 7874 of such Code 

2 is amended by striking ‘‘EXPATRIATED ENTITIES

3 AND THEIR FOREIGN PARENTS’’ and inserting 

4 ‘‘CORPORATE INVERSIONS COMPLETED ON OR

5 BEFORE JANUARY 4, 2017’’. 

6 (2) The table of sections for subchapter C of 

7 chapter 80 of such Code is amended by striking the 

8 item relating to section 7874 and inserting the fol9 lowing new items: 

‘‘Sec. 7874. Rules relating to corporate inversions completed on or before January 4, 2017. 

‘‘Sec. 7874A. Rules relating to corporate inversions and corporate expatriations.’’. 

10 (e) EFFECTIVE DATE.— 

11 (1) IN GENERAL.—Except as provided in para12 graph (2), the amendments made by this section 

13 shall apply taxable years ending after January 4, 

14 2017. 

15 (2) MODIFICATIONS TO RULES RELATING TO

16 CORPORATE INVERSIONS COMPLETED ON OR BE17 FORE JANUARY 4, 2017.—The amendments made by 

18 subsection (b) shall apply to taxable years ending 

19 after May 8, 2014. 

Æ 

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