I 

117TH CONGRESS 

1ST SESSION H. R. 2847 

To amend the Internal Revenue Code of 1986 to restore the limitation 

on downward attribution of stock ownership in applying the constructive 

ownership rules to controlled foreign corporations, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 26, 2021 

Ms. MOORE of Wisconsin (for herself, Mr. FERGUSON, Mr. SCHNEIDER, and 

Mr. ESTES) 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 restore 

the limitation on downward attribution of stock ownership in applying the constructive ownership rules to controlled foreign corporations, 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. RESTORATION OF LIMITATION ON DOWNWARD 

4 ATTRIBUTION OF STOCK OWNERSHIP IN AP5 PLYING CONSTRUCTIVE OWNERSHIP RULES. 

6 (a) IN GENERAL.—Section 958(b) of the Internal 

7 Revenue Code of 1986 is amended— 


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1 (1) by inserting after paragraph (3) the fol2 lowing: 

3 ‘‘(4) Subparagraphs (A), (B), and (C) of sec4 tion 318(a)(3) shall not be applied so as to consider 

5 a United States person as owning stock which is 

6 owned by a person who is not a United States per7 son.’’, and 

8 (2) by striking ‘‘Paragraph (1)’’ in the last sen9 tence and inserting ‘‘Paragraphs (1) and (4)’’. 

10 (b) FOREIGN CONTROLLED UNITED STATES SHARE11 HOLDERS.—Subpart F of part III of subchapter N of 

12 chapter 1 of such Code is amended by inserting after sec13 tion 951A the following new section: 

14 ‘‘SEC. 951B. AMOUNTS INCLUDED IN GROSS INCOME OF 

15 FOREIGN CONTROLLED UNITED STATES 

16 SHAREHOLDERS. 

17 ‘‘(a) IN GENERAL.—In the case of any foreign con18 trolled United States shareholder of a foreign controlled 

19 foreign corporation— 

20 ‘‘(1) this subpart (other than sections 951A, 

21 951(b), 957, and 965) shall be applied with respect 

22 to such shareholder (separately from, and in addi23 tion to, the application of this subpart without re24 gard to this section)— 


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1 ‘‘(A) by substituting ‘foreign controlled 

2 United States shareholder’ for ‘United States 

3 shareholder’ each place it appears therein, and 

4 ‘‘(B) by substituting ‘foreign controlled 

5 foreign corporation’ for ‘controlled foreign cor6 poration’ each place it appears therein, and 

7 ‘‘(2) sections 951A and 965 shall be applied 

8 with respect to such shareholder— 

9 ‘‘(A) by treating each reference to ‘United 

10 States shareholder’ in such sections as includ11 ing a reference to such shareholder, and 

12 ‘‘(B) by treating each reference to ‘con13 trolled foreign corporation’ in such sections as 

14 including a reference to such foreign controlled 

15 foreign corporation. 

16 ‘‘(b) FOREIGN CONTROLLED UNITED STATES

17 SHAREHOLDER.—For purposes of this section, the term 

18 ‘foreign controlled United States shareholder’ means, with 

19 respect to any foreign corporation, any United States per20 son which would be a United States shareholder with re21 spect to such foreign corporation if— 

22 ‘‘(1) section 951(b) were applied by substituting 

23 ‘more than 50 percent’ for ‘10 percent or more’, and 

24 ‘‘(2) section 958(b) were applied without regard 

25 to paragraph (4) thereof. 


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1 ‘‘(c) FOREIGN CONTROLLED FOREIGN CORPORA2 TION.—For purposes of this section, the term ‘foreign con3 trolled foreign corporation’ means a foreign corporation, 

4 other than a controlled foreign corporation, which would 

5 be a controlled foreign corporation if section 957(a) were 

6 applied— 

7 ‘‘(1) by substituting ‘foreign controlled United 

8 States shareholders’ for ‘United States share9 holders’, and 

10 ‘‘(2) by substituting ‘section 958(b) (other than 

11 paragraph (4) thereof)’ for ‘section 958(b)’. 

12 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 

13 such regulations or other guidance as may be necessary 

14 or appropriate to carry out the purposes of this section, 

15 including regulations or other guidance— 

16 ‘‘(1) to treat a foreign controlled United States 

17 shareholder or a foreign controlled foreign corpora18 tion as a United States shareholder or as a con19 trolled foreign corporation, respectively, for purposes 

20 of provisions of this title other than this subpart, 

21 and 

22 ‘‘(2) to prevent the avoidance of the purposes of 

23 this section.’’. 

24 (c) CLERICAL AMENDMENT.—The table of sections 

25 for subpart F of part III of subchapter N of chapter 1 


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1 of such Code is amended by inserting after the item relat2 ing to section 951A the following new item: 

‘‘Sec. 951B. Amounts included in gross income of foreign controlled United 

States shareholders.’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to— 

5 (1) the last taxable year of foreign corporations 

6 beginning before January 1, 2018, and each subse7 quent taxable year of such foreign corporations, and 

8 (2) taxable years of United States persons in 

9 which or with which such taxable years of foreign 

10 corporations end. 

Æ 


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