II 

110TH CONGRESS 

2D SESSION S. 3659 

To amend the Internal Revenue Code of 1986 to provide for the disclosure 

of schedule M–3 to the Securities and Exchange Commission, to provide 

for the public disclosure of certain information on such schedule, to 

provide penalties for failure to file such schedule or inaccurately reporting 

information on such schedule, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

OCTOBER 1 (legislative day, SEPTEMBER 17), 2008 

Mr. SCHUMER 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 provide 

for the disclosure of schedule M–3 to the Securities and 

Exchange Commission, to provide for the public disclosure of certain information on such schedule, to provide 

penalties for failure to file such schedule or inaccurately 

reporting information on such schedule, and for other 

purposes. 

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 ‘‘Corporate Trans5 parency Act of 2007’’. 


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1 SEC. 2. DISCLOSURE OF BOOK-TAX DIFFERENCES TO SECU2 RITIES AND EXCHANGE COMMISSION. 

3 (a) DISCLOSURE FOR ENFORCEMENT PURPOSES.— 

4 (1) IN GENERAL.—Subsection (l) of section 

5 6103 of the Internal Revenue Code of 1986 (relating 

6 to disclosure of returns and return information for 

7 purposes other than tax administration) is amended 

8 by adding at the end the following new paragraph: 

9 ‘‘(21) DISCLOSURE OF RETURN INFORMATION

10 TO SECURITIES AND EXCHANGE COMMISSION.— 

11 ‘‘(A) IN GENERAL.—The Secretary shall, 

12 upon written request from the Commissioner of 

13 the Securities and Exchange Commission, dis14 close to officers and employees of the Securities 

15 and Exchange Commission return information 

16 of specified public entities relating to the rec17 onciliation of financial income statements re18 ported to the Securities and Exchange Commis19 sion (or to shareholders) with income tax re20 turns. 

21 ‘‘(B) RESTRICTION ON USE OF DISCLOSED

22 INFORMATION.—Any officers and employees of 

23 the Securities and Exchange Commission re24 ceiving return information under subparagraph 

25 (A) shall use such information only— 


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1 ‘‘(i) for the purposes of, and to the 

2 extent necessary in, civil enforcement and 

3 administration of the securities laws (as 

4 defined in section 3 of the Securities and 

5 Exchange Act of 1934), and 

6 ‘‘(ii) for purposes of conducting the 

7 study required under section 5(a) of the 

8 Corporate Transparency Act of 2007. 

9 ‘‘(C) SPECIFIED PUBLIC ENTITY.—For 

10 purposes of this paragraph, the term ‘specified 

11 public entity’ means any entity— 

12 ‘‘(i) issuing any class of securities re13 quired to be registered under section 12 of 

14 the Securities and Exchange Act of 1934, 

15 and 

16 ‘‘(ii) which is required by the Sec17 retary to file schedule M–3. 

18 In the case of an entity which is a member of 

19 an affiliated group filing a consolidated return, 

20 the term ‘specified public entity’ means such 

21 group and not each member thereof.’’. 

22 (2) PROCEDURES AND RECORD KEEPING RE23 LATED TO DISCLOSURE.—Subsection (p)(4) of sec24 tion 6103 of the Internal Revenue Code of 1986 is 

25 amended— 


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1 (A) by striking ‘‘(14), or (17)’’ in the mat2 ter before subparagraph (A) and inserting 

3 ‘‘(14), (17), or (21)’’, and 

4 (B) by striking ‘‘(15), or (17)’’ in subpara5 graph (F)(ii) and inserting ‘‘(15), (17), or 

6 (21)’’. 

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

8 this section shall apply to requests made after the date 

9 of the enactment of this Act. 

10 SEC. 3. PUBLIC DISCLOSURE OF CERTAIN CORPORATE 

11 BOOK-TAX DIFFERENCES. 

12 (a) IN GENERAL.—Subchapter B of chapter 61 of the 

13 Internal Revenue Code of 1986 is amended by inserting 

14 after section 6104 the following new section: 

15 ‘‘SEC. 6104A. PUBLIC DISCLOSURE OF CERTAIN COR16 PORATE BOOK-TAX DIFFERENCES. 

17 ‘‘(a) IN GENERAL.—The Secretary shall make pub18 licly available, on the Internet and at the offices of the 

19 Internal Revenue Service, the information described in 

20 subsection (b) with respect to each specified entity for 

21 each taxable year ending after the date of the enactment 

22 of this section. 

23 ‘‘(b) INFORMATION.—The information described in 

24 this subsection with respect to a specified entity are the 

25 following items: 


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1 ‘‘(1) The name and address of the specified en2 tity. 

3 ‘‘(2) The CUSIP identification number under 

4 which the entity files reports with the Securities and 

5 Exchange Commission, if any. 

6 ‘‘(3) The following information relating to the 

7 worldwide consolidated income statement of the 

8 specified entity for the period ending with or within 

9 the taxable year: 

10 ‘‘(A) The total net income (or loss) shown 

11 on such income statement. 

12 ‘‘(B) The total net income (or loss) of for13 eign entities included on such income statement 

14 but not included on the consolidated tax return 

15 of the specified entity for the taxable year. 

16 ‘‘(C) The total of adjustments (other than 

17 the item described in subparagraph (B)) reflect18 ing the difference between the income (or loss) 

19 shown on such income statement and the item 

20 described in subparagraph (D). 

21 ‘‘(D) The total income (or loss) of all enti22 ties included on both such income statement 

23 and the consolidated tax return of the specified 

24 entity for the taxable year. 


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1 ‘‘(4) The total net income (or loss) shown on 

2 the consolidated income tax return of the specified 

3 entity for the taxable year. 

4 ‘‘(5) The total temporary differences between 

5 the items described in paragraphs (3)(D) and (4). 

6 ‘‘(6) The total permanent differences between 

7 the items described in paragraphs (3)(D) and (4). 

8 ‘‘(c) SPECIFIED ENTITY.—For purposes of this sub9 section, the term ‘specified entity’ means any entity which 

10 is required by the Secretary to file schedule M–3. In the 

11 case of an entity which is a member of an affiliated group 

12 filing a consolidated return, the term ‘specified entity’ 

13 means such group and not each member thereof.’’. 

14 (b) CLERICAL AMENDMENT.—The table of sections 

15 for subchapter B of chapter 61 of such Code is amended 

16 by inserting after the item relating to section 6104 the 

17 following new item: 

‘‘Sec. 6104A. Public disclosure of certain corporate book-tax differences.’’. 

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

19 this section shall apply to taxable years ending after the 

20 date of the enactment of this Act. 

21 SEC. 4. PENALTY FOR FAILURE TO FILE AND FILING INAC22 CURATE INFORMATION RELATING TO CER23 TAIN CORPORATE BOOK-TAX DIFFERENCES. 

24 (a) FAILURE TO FILE.—Section 6652 of the Internal 

25 Revenue Code of 1986 is amended by redesignating subVerDate Aug 31 2005 18:21 Oct 04, 2008 Jkt 079200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3659.IS S3659

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1 section (m) as subsection (n) and by inserting after sub2 section (l) the following new subsection: 

3 ‘‘(m) FAILURE TO FILE INFORMATION RELATING TO

4 CERTAIN CORPORATE BOOK-TAX DIFFERENCES.— 

5 ‘‘(1) IN GENERAL.—In the case of— 

6 ‘‘(A) any failure by a specified entity to file 

7 any statement required by the Secretary relat8 ing to the reconciliation of financial statements 

9 with income tax returns, or 

10 ‘‘(B) any failure by a specified entity— 

11 ‘‘(i) to include any of the information 

12 required to be shown on such a statement, 

13 or 

14 ‘‘(ii) to include materially accurate in15 formation on such a statement, 

16 there shall be paid (on notice and demand by the 

17 Secretary and in the same manner as tax) by the 

18 specified entity an amount equal to the amount de19 termined under paragraph (2) for each such failure. 

20 ‘‘(2) AMOUNT.— 

21 ‘‘(A) CORPORATIONS.—In the case of a 

22 corporation, the amount determined under this 

23 paragraph is— 

24 ‘‘(i) $10,000 in the case of such a 

25 specified entity with total assets at the end 


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1 of the taxable year of not more than 

2 $50,000,000, 

3 ‘‘(ii) $25,000 in the case of such a 

4 specified entity with total assets at the end 

5 of the taxable year of more than 

6 $50,000,000 but not more than 

7 $250,000,000, 

8 ‘‘(iii) $50,000 in the case of such a 

9 specified entity with total assets at the end 

10 of the taxable year of more than 

11 $250,000,000 but not more than 

12 $1,000,000,000, and 

13 ‘‘(iv) $100,000 in the case of such a 

14 specified entity with total assets at the end 

15 of the taxable year of more than 

16 $1,000,000,000. 

17 ‘‘(B) OTHER ENTITIES.—In the case of a 

18 specified entity other than a corporation, the 

19 amount determined under this paragraph is— 

20 ‘‘(i) $5,000 in the case of such a spec21 ified entity with gross receipts for the tax22 able year of not more than $10,000,000, 

23 ‘‘(ii) $10,000 in the case of such a 

24 specified entity with gross receipts for the 


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1 taxable year of more than $10,000,000 but 

2 not more than $50,000,000, 

3 ‘‘(iii) $25,000 in the case of such a 

4 specified entity with gross receipts for the 

5 taxable year of more than $50,000,000 but 

6 not more than $250,000,000, 

7 ‘‘(iv) $50,000 in the case of such a 

8 specified entity with gross receipts for the 

9 taxable year of more than $250,000,000 

10 but not more than $1,000,000,000, and 

11 ‘‘(v) $100,000 in the case of such a 

12 specified entity with gross receipts for the 

13 taxable year of more than $1,000,000,000. 

14 ‘‘(3) SPECIFIED ENTITY.—For purposes of this 

15 subsection, the term ‘specified entity’ has the mean16 ing given such term under section 6104A.’’. 

17 (b) EFFECTIVE DATE.—The amendments made by 

18 this sections shall apply to returns and statements filed 

19 after the date of the enactment of this Act. 

20 SEC. 5. STUDY ON BOOK-TAX DISCLOSURES. 

21 (a) IN GENERAL.— 

22 (1) STUDY.—The Secretary of the Treasury, in 

23 consultation with the Commissioner of the Securities 

24 and Exchange Commission and the Joint Committee 

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1 ation of differences between the financial income 

2 statements of specified entities with income tax re3 turns. 

4 (2) MATTERS INCLUDED IN STUDY.—The study 

5 conducted under subsection (a) shall address— 

6 (A) the need for additional reporting of 

7 book-tax difference to— 

8 (i) the Internal Revenue Service, and 

9 (ii) the Securities and Exchange Com10 mission, and 

11 (B) the benefits and risks of publicly dis12 closing such differences. 

13 (b) REPORT.—Not later than 18 months after the 

14 date of the enactment of this Act, the Secretary of the 

15 Treasury shall submit to Congress a report on the matters 

16 studied under subsection (a) together with any rec17 ommendations. 

18 (c) SPECIFIED ENTITY.—For purposes of this sec19 tion, the term ‘‘specified entity’’ has the meaning given 

20 such term under section 6104A of the Internal Revenue 

21 Code of 1986. 

Æ 


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