I 
111TH CONGRESS 
2D SESSION 
H. R. 5982 
To amend the Internal Revenue Code of 1986 to repeal the expansion of 
certain information reporting requirements to corporations and to pay-
ments for property, to eliminate loopholes which encourage companies 
to move operations offshore, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 30, 2010 
Mr. LEVIN (for himself, Mr. OWENS, Mr. MURPHY of New York, Mr. STARK, 
Mr. LEWIS of Georgia, Mr. BLUMENAUER, Mr. PASCRELL, Ms. BERK-
LEY, Mr. CROWLEY, Mr. VAN HOLLEN, Mr. DAVIS of Illinois, Mr. 
ARCURI, Mr. BARROW, Mr. GARAMENDI, Ms. GIFFORDS, Mr. HILL, Mr. 
KRATOVIL, Mr. PERRIELLO, Mr. KIND, Mr. ISRAEL, Ms. CHU, and Ms. 
KOSMAS) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on the 
Budget, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned; which was considered and failed of pas-
sage 
A BILL 
To amend the Internal Revenue Code of 1986 to repeal 
the expansion of certain information reporting require-
ments to corporations and to payments for property, 
to eliminate loopholes which encourage companies to 
move operations offshore, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; 
TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Small Business Tax Relief Act of 2010’’. 
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; amendment of 1986 Code; table of contents. 
TITLE I—REPEAL OF CERTAIN INFORMATION REPORTING 
REQUIREMENTS 
Sec. 101. Repeal of expansion of certain information reporting requirements to 
corporations and to payments for property. 
TITLE II—REVENUE PROVISIONS 
Subtitle A—Foreign Provisions 
Sec. 201. Rules to prevent splitting foreign tax credits from the income to 
which they relate. 
Sec. 202. Denial of foreign tax credit with respect to foreign income not subject 
to United States taxation by reason of covered asset acquisi-
tions. 
Sec. 203. Separate application of foreign tax credit limitation, etc., to items 
resourced under treaties. 
Sec. 204. Limitation on the amount of foreign taxes deemed paid with respect 
to section 956 inclusions. 
Sec. 205. Special rule with respect to certain redemptions by foreign subsidi-
aries. 
Sec. 206. Modification of affiliation rules for purposes of rules allocating inter-
est expense. 
Sec. 207. Termination of special rules for interest and dividends received from 
persons meeting the 80-percent foreign business requirements. 
Sec. 208. Source rules for income on guarantees. 
Sec. 209. Limitation on extension of statute of limitations for failure to notify 
Secretary of certain foreign transfers. 
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Subtitle B—Other Revenue Provisions 
Sec. 211. Required minimum 10-year term, etc., for grantor retained annuity 
trusts. 
Sec. 212. Crude tall oil ineligible for cellulosic biofuel producer credit. 
Sec. 213. Increase in information return penalties. 
Sec. 214. Treatment of securities of a controlled corporation exchanged for as-
sets in certain reorganizations. 
TITLE III—PAYGO COMPLIANCE 
Sec. 301. Paygo compliance. 
TITLE I—REPEAL OF CERTAIN 
INFORMATION 
REPORTING 
REQUIREMENTS 
SEC. 101. REPEAL OF EXPANSION OF CERTAIN INFORMA-
TION REPORTING REQUIREMENTS TO COR-
PORATIONS AND TO PAYMENTS FOR PROP-
ERTY. 
Section 9006 of the Patient Protection and Afford-
able Care Act is repealed. Each provision of law amended 
by such section is amended to read as such provision 
would read if such section had never been enacted. 
TITLE II—REVENUE PROVISIONS 
Subtitle A—Foreign Provisions 
SEC. 201. RULES TO PREVENT SPLITTING FOREIGN TAX 
CREDITS FROM THE INCOME TO WHICH THEY 
RELATE. 
(a) IN GENERAL.—Subpart A of part III of sub-
chapter N of chapter 1 is amended by adding at the end 
the following new section: 
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‘‘SEC. 909. SUSPENSION OF TAXES AND CREDITS UNTIL RE-
LATED INCOME TAKEN INTO ACCOUNT. 
‘‘(a) IN GENERAL.—If there is a foreign tax credit 
splitting event with respect to a foreign income tax paid 
or accrued by the taxpayer, such tax shall not be taken 
into account for purposes of this title before the taxable 
year in which the related income is taken into account 
under this chapter by the taxpayer. 
‘‘(b) SPECIAL RULES WITH RESPECT TO SECTION 
902 CORPORATIONS.—If there is a foreign tax credit split-
ting event with respect to a foreign income tax paid or 
accrued by a section 902 corporation, such tax shall not 
be taken into account— 
‘‘(1) for purposes of section 902 or 960, or 
‘‘(2) for purposes of determining earnings and 
profits under section 964(a), 
before the taxable year in which the related income is 
taken into account under this chapter by such section 902 
corporation or a domestic corporation which meets the 
ownership requirements of subsection (a) or (b) of section 
902 with respect to such section 902 corporation. 
‘‘(c) SPECIAL RULES.—For purposes of this sec-
tion— 
‘‘(1) APPLICATION TO PARTNERSHIPS, ETC.—In 
the case of a partnership, subsections (a) and (b) 
shall be applied at the partner level. Except as oth-
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erwise provided by the Secretary, a rule similar to 
the rule of the preceding sentence shall apply in the 
case of any S corporation or trust. 
‘‘(2) TREATMENT OF FOREIGN TAXES AFTER 
SUSPENSION.—In the case of any foreign income tax 
not taken into account by reason of subsection (a) 
or (b), except as otherwise provided by the Sec-
retary, such tax shall be so taken into account in the 
taxable year referred to in such subsection (other 
than for purposes of section 986(a)) as a foreign in-
come tax paid or accrued in such taxable year. 
‘‘(d) DEFINITIONS.—For purposes of this section— 
‘‘(1) 
FOREIGN
TAX
CREDIT
SPLITTING 
EVENT.—There is a foreign tax credit splitting event 
with respect to a foreign income tax if the related 
income is (or will be) taken into account under this 
chapter by a covered person. 
‘‘(2) FOREIGN INCOME TAX.—The term ‘foreign 
income tax’ means any income, war profits, or excess 
profits tax paid or accrued to any foreign country or 
to any possession of the United States. 
‘‘(3) RELATED INCOME.—The term ‘related in-
come’ means, with respect to any portion of any for-
eign income tax, the income (or, as appropriate, 
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earnings and profits) to which such portion of for-
eign income tax relates. 
‘‘(4) COVERED
PERSON.—The term ‘covered 
person’ means, with respect to any person who pays 
or accrues a foreign income tax (hereafter in this 
paragraph referred to as the ‘payor’)— 
‘‘(A) any entity in which the payor holds, 
directly or indirectly, at least a 10 percent own-
ership interest (determined by vote or value), 
‘‘(B) any person which holds, directly or 
indirectly, at least a 10 percent ownership in-
terest (determined by vote or value) in the 
payor, 
‘‘(C) any person which bears a relationship 
to the payor described in section 267(b) or 
707(b), and 
‘‘(D) any other person specified by the 
Secretary for purposes of this paragraph. 
‘‘(5) SECTION
902
CORPORATION.—The term 
‘section 902 corporation’ means any foreign corpora-
tion with respect to which one or more domestic cor-
porations meets the ownership requirements of sub-
section (a) or (b) of section 902. 
‘‘(e) REGULATIONS.—The Secretary may issue such 
regulations or other guidance as is necessary or appro-
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priate to carry out the purposes of this section, including 
regulations or other guidance which provides— 
‘‘(1) appropriate exceptions from the provisions 
of this section, and 
‘‘(2) for the proper application of this section 
with respect to hybrid instruments.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for subpart A of part III of subchapter N of chapter 1 
is amended by adding at the end the following new item: 
‘‘Sec. 909. Suspension of taxes and credits until related income taken into ac-
count.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to— 
(1) foreign income taxes (as defined in section 
909(d) of the Internal Revenue Code of 1986, as 
added by this section) paid or accrued after Decem-
ber 31, 2010; and 
(2) foreign income taxes (as so defined) paid or 
accrued by a section 902 corporation (as so defined) 
on or before such date (and not deemed paid under 
section 902(a) or 960 of such Code on or before 
such date), but only for purposes of applying sec-
tions 902 and 960 with respect to periods after such 
date. 
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Section 909(b)(2) of the Internal Revenue Code of 1986, 
as added by this section, shall not apply to foreign income 
taxes described in paragraph (2). 
SEC. 202. DENIAL OF FOREIGN TAX CREDIT WITH RESPECT 
TO 
FOREIGN 
INCOME 
NOT 
SUBJECT 
TO 
UNITED STATES TAXATION BY REASON OF 
COVERED ASSET ACQUISITIONS. 
(a) IN GENERAL.—Section 901 is amended by redes-
ignating subsection (m) as subsection (n) and by inserting 
after subsection (l) the following new subsection: 
‘‘(m) DENIAL OF FOREIGN TAX CREDIT WITH RE-
SPECT TO FOREIGN INCOME NOT SUBJECT TO UNITED 
STATES TAXATION BY REASON OF COVERED ASSET AC-
QUISITIONS.— 
‘‘(1) IN GENERAL.—In the case of a covered 
asset acquisition, the disqualified portion of any for-
eign income tax determined with respect to the in-
come or gain attributable to the relevant foreign as-
sets— 
‘‘(A) shall not be taken into account in de-
termining the credit allowed under subsection 
(a), and 
‘‘(B) in the case of a foreign income tax 
paid by a section 902 corporation (as defined in 
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section 909(d)(5)), shall not be taken into ac-
count for purposes of section 902 or 960. 
‘‘(2) COVERED ASSET ACQUISITION.—For pur-
poses of this section, the term ‘covered asset acquisi-
tion’ means— 
‘‘(A) a qualified stock purchase (as defined 
in section 338(d)(3)) to which section 338(a) 
applies, 
‘‘(B) any transaction which— 
‘‘(i) is treated as an acquisition of as-
sets for purposes of this chapter, and 
‘‘(ii) is treated as the acquisition of 
stock of a corporation (or is disregarded) 
for purposes of the foreign income taxes of 
the relevant jurisdiction, 
‘‘(C) any acquisition of an interest in a 
partnership which has an election in effect 
under section 754, and 
‘‘(D) to the extent provided by the Sec-
retary, any other similar transaction. 
‘‘(3) DISQUALIFIED PORTION.—For purposes of 
this section— 
‘‘(A) IN GENERAL.—The term ‘disqualified 
portion’ means, with respect to any covered 
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asset acquisition, for any taxable year, the ratio 
(expressed as a percentage) of— 
‘‘(i) the aggregate basis differences 
(but not below zero) allocable to such tax-
able year under subparagraph (B) with re-
spect to all relevant foreign assets, divided 
by 
‘‘(ii) the income on which the foreign 
income tax referred to in paragraph (1) is 
determined (or, if the taxpayer fails to sub-
stantiate such income to the satisfaction of 
the Secretary, such income shall be deter-
mined by dividing the amount of such for-
eign income tax by the highest marginal 
tax rate applicable to such income in the 
relevant jurisdiction). 
‘‘(B) 
ALLOCATION
OF
BASIS
DIF-
FERENCE.—For 
purposes 
of 
subparagraph 
(A)(i)— 
‘‘(i) IN
GENERAL.—The basis dif-
ference with respect to any relevant foreign 
asset shall be allocated to taxable years 
using the applicable cost recovery method 
under this chapter. 
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‘‘(ii) SPECIAL RULE FOR DISPOSITION 
OF ASSETS.—Except as otherwise provided 
by the Secretary, in the case of the disposi-
tion of any relevant foreign asset— 
‘‘(I) the basis difference allocated 
to the taxable year which includes the 
date of such disposition shall be the 
excess of the basis difference with re-
spect to such asset over the aggregate 
basis difference with respect to such 
asset which has been allocated under 
clause (i) to all prior taxable years, 
and 
‘‘(II) no basis difference with re-
spect to such asset shall be allocated 
under clause (i) to any taxable year 
thereafter. 
‘‘(C) BASIS DIFFERENCE.— 
‘‘(i) IN
GENERAL.—The term ‘basis 
difference’ means, with respect to any rel-
evant foreign asset, the excess of— 
‘‘(I) the adjusted basis of such 
asset immediately after the covered 
asset acquisition, over 
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‘‘(II) the adjusted basis of such 
asset immediately before the covered 
asset acquisition. 
‘‘(ii) BUILT-IN LOSS ASSETS.—In the 
case of a relevant foreign asset with re-
spect to which the amount described in 
clause (i)(II) exceeds the amount described 
in clause (i)(I), such excess shall be taken 
into account under this subsection as a 
basis difference of a negative amount. 
‘‘(iii) SPECIAL RULE FOR SECTION 338 
ELECTIONS.—In the case of a covered 
asset acquisition described in paragraph 
(2)(A), the covered asset acquisition shall 
be treated for purposes of this subpara-
graph as occurring at the close of the ac-
quisition date (as defined in section 
338(h)(2)). 
‘‘(4) RELEVANT
FOREIGN
ASSETS.—For pur-
poses of this section, the term ‘relevant foreign 
asset’ means, with respect to any covered asset ac-
quisition, any asset (including any goodwill, going 
concern value, or other intangible) with respect to 
such acquisition if income, deduction, gain, or loss 
attributable to such asset is taken into account in 
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