I 

111TH CONGRESS 

2D SESSION H. R. 5473 

To amend the Internal Revenue Code of 1986 to exclude from personal 

holding company income dividends which are received from foreign affiliates and which are reinvested in the United States. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 28, 2010 

Ms. LINDA T. SA ́NCHEZ of California 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 exclude 

from personal holding company income dividends which 

are received from foreign affiliates and which are reinvested in the United States. 

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 ‘‘Investing Income at 

5 Home Act of 2010’’. 

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1 SEC. 2. EXCLUSION FROM PERSONAL HOLDING COMPANY 

2 INCOME OF DIVIDENDS WHICH ARE RE3 CEIVED FROM FOREIGN AFFILIATES AND 

4 WHICH ARE REINVESTED IN THE UNITED 

5 STATES. 

6 (a) IN GENERAL.—Paragraph (1) of section 543(a) 

7 of the Internal Revenue Code of 1986 is amended by strik8 ing ‘‘and’’ at the end of subparagraph (C), by striking the 

9 period at the end of subparagraph (D) and inserting ‘‘, 

10 and’’, and by adding at the end the following new subpara11 graph: 

12 ‘‘(E) foreign affiliate dividends designated 

13 for reinvestment in the United States (within 

14 the meaning of subsection (b)(5)).’’. 

15 (b) FOREIGN AFFILIATE DIVIDENDS DESIGNATED

16 FOR REINVESTMENT.—Subsection (b) of section 543 of 

17 such Code is amended by adding at the end the following 

18 new paragraph: 

19 ‘‘(5) FOREIGN AFFILIATE DIVIDENDS DES20 IGNATED FOR REINVESTMENT.—For purposes of 

21 subsection (a)(1)(E)— 

22 ‘‘(A) IN GENERAL.—A dividend is de23 scribed in subsection (a)(1)(E) if— 

24 ‘‘(i) the dividend is received by the 

25 taxpayer from an affiliated foreign cor26 poration, and 

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1 ‘‘(ii) the taxpayer designates (on the 

2 taxpayer’s return for the taxable year in 

3 which received) the dividend for reinvest4 ment in the United States (as described in 

5 section 965(b)(4)(B)), including as a 

6 source for funding compensation and bene7 fits for both existing and newly hired work8 ers (other than for executives), by the tax9 payer or 1 or more members of an affili10 ated group which includes the taxpayer. 

11 ‘‘(B) AFFILIATED FOREIGN CORPORA12 TION.—For purposes of subparagraph (A), the 

13 term ‘affiliated foreign corporation’ means any 

14 foreign corporation if stock possessing at least 

15 10 percent of the total combined voting power 

16 of all outstanding classes of stock entitled to 

17 vote is owned in the aggregate by the taxpayer 

18 and members of the an affiliated group which 

19 includes the taxpayer. 

20 ‘‘(C) FAILURE TO REINVEST WITHIN 5

21 YEARS.—If, at the end of the 5th taxable year 

22 following the taxable year in which the dividend 

23 is received, the dividend is not reinvested in the 

24 United States as described in subparagraph 

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1 (A)(ii), the taxpayer shall pay a tax equal to 

2 the sum of— 

3 ‘‘(i) the product of— 

4 ‘‘(I) the amount of the dividend 

5 not so reinvested, and 

6 ‘‘(II) the rate of tax in effect 

7 under section 541 on the date that 

8 the dividend was received, and 

9 ‘‘(ii) the amount of interest that 

10 would be assessed under section 6601 if 

11 the amount of tax determined under clause 

12 (i) were treated as an underpayment for 

13 the taxable year in which the dividend was 

14 received. 

15 ‘‘(D) AFFILIATED GROUP.—For purposes 

16 of this paragraph, the term ‘affiliated group’ 

17 has the meaning given to such term by section 

18 1504(a).’’. 

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

20 this section shall apply to dividends received in taxable 

21 years beginning on or after the date of the enactment of 

22 this Act. 

Æ 

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