I 

110TH CONGRESS 

2D SESSION H. R. 5602 

To amend the Internal Revenue Code of 1986 and the Social Security Act 

to treat certain domestically controlled foreign persons performing services under contract with the United States Government as American 

employers for purposes of certain employment taxes and benefits. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 13, 2008 

Mr. ELLSWORTH (for himself, Mr. EMANUEL, Mr. MCDERMOTT, Mr. LEWIS

of Georgia, and Mr. POMEROY) introduced the following bill; which was 

referred to the Committee on Ways and Means 

A BILL 

To amend the Internal Revenue Code of 1986 and the Social 

Security Act to treat certain domestically controlled foreign persons performing services under contract with the 

United States Government as American employers for 

purposes of certain employment taxes and benefits. 

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 ‘‘Fair Share Act of 

5 2008’’. 


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1 SEC. 2. CERTAIN DOMESTICALLY CONTROLLED FOREIGN 

2 PERSONS PERFORMING SERVICES UNDER 

3 CONTRACT WITH UNITED STATES GOVERN4 MENT TREATED AS AMERICAN EMPLOYERS. 

5 (a) FICA TAXES.—Section 3121 of the Internal Rev6 enue Code of 1986 (relating to definitions) is amended by 

7 adding at the end the following new subsection: 

8 ‘‘(z) TREATMENT OF CERTAIN FOREIGN PERSONS AS

9 AMERICAN EMPLOYERS.— 

10 ‘‘(1) IN GENERAL.—If any employee of a for11 eign person is performing services in connection with 

12 a contract between the United States Government 

13 (or any instrumentality thereof) and any member of 

14 any domestically controlled group of entities which 

15 includes such foreign person, such foreign person 

16 shall be treated for purposes of this chapter as an 

17 American employer with respect to such services per18 formed by such employee. 

19 ‘‘(2) DOMESTICALLY CONTROLLED GROUP OF

20 ENTITIES.—For purposes of this subsection— 

21 ‘‘(A) IN GENERAL.—The term ‘domesti22 cally controlled group of entities’ means a con23 trolled group of entities the common parent of 

24 which is a domestic corporation. 

25 ‘‘(B) CONTROLLED GROUP OF ENTITIES.— 

26 The term ‘controlled group of entities’ means a 


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1 controlled group of corporations as defined in 

2 section 1563(a)(1), except that— 

3 ‘‘(i) ‘more than 50 percent’ shall be 

4 substituted for ‘at least 80 percent’ each 

5 place it appears therein, and 

6 ‘‘(ii) the determination shall be made 

7 without regard to subsections (a)(4) and 

8 (b)(2) of section 1563. 

9 A partnership or any other entity (other than a 

10 corporation) shall be treated as a member of a 

11 controlled group of entities if such entity is con12 trolled (within the meaning of section 

13 954(d)(3)) by members of such group (includ14 ing any entity treated as a member of such 

15 group by reason of this sentence). 

16 ‘‘(3) LIABILITY OF COMMON PARENT.—In the 

17 case of a foreign person who is a member of any do18 mestically controlled group of entities, the common 

19 parent of such group shall be jointly and severally 

20 liable for any tax under this chapter for which such 

21 foreign person is liable by reason of this subsection. 

22 ‘‘(4) CROSS REFERENCE.—For relief from taxes 

23 in cases covered by certain international agreements, 

24 see sections 3101(c) and 3111(c).’’. 


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1 (b) SOCIAL SECURITY BENEFITS.—Subsection (e) of 

2 section 210 of the Social Security Act (42 U.S.C. 410(e)) 

3 is amended— 

4 (1) by striking ‘‘(e) The term’’ and inserting 

5 ‘‘(e)(1) The term’’, 

6 (2) by redesignating paragraphs (1) through 

7 (6) as subparagraphs (A) through (F), respectively, 

8 and 

9 (3) by adding at the end the following new 

10 paragraph: 

11 ‘‘(2)(A) If any employee of a foreign person is 

12 performing services in connection with a contract be13 tween the United States Government (or any instru14 mentality thereof) and any member of any domesti15 cally controlled group of entities which includes such 

16 foreign person, such foreign person shall be treated 

17 for purposes of this chapter as an American em18 ployer with respect to such services performed by 

19 such employee. 

20 ‘‘(B) For purposes of this paragraph— 

21 ‘‘(i) The term ‘domestically controlled 

22 group of entities’ means a controlled group of 

23 entities the common parent of which is a do24 mestic corporation. 


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1 ‘‘(ii) The term ‘controlled group of entities’ 

2 means a controlled group of corporations as de3 fined in section 1563(a)(1) of the Internal Rev4 enue Code of 1986, except that— 

5 ‘‘(I) ‘more than 50 percent’ shall be 

6 substituted for ‘at least 80 percent’ each 

7 place it appears therein, and 

8 ‘‘(II) the determination shall be made 

9 without regard to subsections (a)(4) and 

10 (b)(2) of section 1563 of such Code. 

11 A partnership or any other entity (other than a 

12 corporation) shall be treated as a member of a 

13 controlled group of entities if such entity is con14 trolled (within the meaning of section 954(d)(3) 

15 of such Code) by members of such group (in16 cluding any entity treated as a member of such 

17 group by reason of this sentence).’’. 

18 (c) EFFECTIVE DATE.—The amendment made by 

19 this section shall apply to services performed after the 

20 date of the enactment of this Act. 

Æ 


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