I 
114TH CONGRESS 
1ST SESSION H. R. 3812 
To amend the Internal Revenue Code of 1986 to provide for the identification 
of corporate tax haven countries and increased penalties for tax evasion 
practices in haven countries that ship United States jobs overseas, and 
for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 22, 2015 
Mr. MCNERNEY (for himself and Ms. LEE) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Oversight and Government Reform, for a period to be 
subsequently determined by the Speaker, in each case for consideration 
of such provisions as fall within the jurisdiction of the committee con-
cerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
for the identification of corporate tax haven countries 
and increased penalties for tax evasion practices in haven 
countries that ship United States jobs overseas, and for 
other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Stop Outsourcing and 
Create American Jobs Act of 2015’’. 
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SEC. 2. IDENTIFYING CORPORATE TAX HAVEN COUNTRIES 
AND INCREASING PENALTIES FOR TAX EVA-
SION PRACTICES IN HAVEN COUNTRIES THAT 
SHIP UNITED STATES JOBS OVERSEAS. 
Not later than one year after the date of the enact-
ment of this Act, the Secretary of the Treasury shall de-
velop and publish a list of countries the Secretary deter-
mines to be corporate tax haven countries. In developing 
such list, the Secretary may consider the following criteria: 
(1) Tax rate in the country. 
(2) Lack of effective exchange of information 
between governments. 
(3) Lack of transparency in financial services 
sector. 
(4) Lack of requirements of substantial eco-
nomic activity. 
(5) Incentives which may encourage a United 
States corporation to invest abroad rather than do-
mestically. 
(6) Other factors deemed relevant by the Sec-
retary. 
The Secretary shall review and update such list every 3 
years. 
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SEC. 3. INCREASE IN PENALTIES FOR CORPORATE TAX 
EVASION PRACTICES CONCERNING RETURNS, 
DOCUMENTS, AND ACTIVITIES RELATING TO 
TAX HAVEN COUNTRIES. 
(a) ACCURACY-RELATED PENALTY ON UNDERPAY-
MENTS.—Section 6662 of the Internal Revenue Code of 
1986 is amended by adding at the end the following: 
‘‘(l) INCREASE IN PENALTY IN CASE OF TAX HAVEN 
COUNTRIES.— 
‘‘(1) IN GENERAL.—In the case of any portion 
of an underpayment by a corporation for a taxable 
year which involves an undisclosed foreign financial 
asset located in a tax haven country at any time 
during such taxable year, subsection (a) shall be ap-
plied with respect to such portion by substituting ‘60 
percent’ for ‘20 percent’. 
‘‘(2) TAX HAVEN COUNTRY.—For purposes of 
this subsection, the term ‘tax haven country’ means 
a country on the list published under section 2(a) of 
the Stop Outsourcing and Create American Jobs Act 
of 2015.’’. 
(b) UNDERSTATEMENTS WITH RESPECT
TO RE-
PORTABLE TRANSACTIONS.—Section 6662A of such Code 
is amended by adding at the end the following: 
‘‘(f) INCREASE IN PENALTY IN CASE OF TAX HAVEN 
COUNTRIES.—In the case of any portion of a reportable 
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transaction understatement by a corporation for a taxable 
year which involves a transaction that originates, termi-
nates, or otherwise occurs in a tax haven country (as de-
fined in section 6662(l)(2)), subsection (a) shall be applied 
with respect to such portion by substituting ‘40 percent’ 
for ‘20 percent’.’’. 
(c) FRAUD PENALTY.—Section 6663 of such Code is 
amended by adding at the end the following: 
‘‘(d) INCREASE IN PENALTY IN CASE OF TAX HAVEN 
COUNTRIES.—In the case of any fraud by a corporation 
involving an activity occurring in a tax haven country (as 
defined in section 6662(l)(2)), subsection (a) shall be ap-
plied by substituting ‘100 percent’ for ‘75 percent’.’’. 
(d) ERRONEOUS CLAIM FOR CREDIT OR REFUND.— 
Section 6676 of such Code is amended by redesignating 
subsection (d) as subsection (e) and by inserting after sub-
section (c) the following new subsection: 
‘‘(d) INCREASE IN PENALTY IN CASE OF TAX HAVEN 
COUNTRIES.—In the case of claim or credit by a corpora-
tion for any excessive amount due for credits or refunds 
involving funds held or invested in a tax haven country 
(as defined in section 6662(l)(2)), subsection (a) shall be 
applied by substituting ‘40 percent’ for ‘20 percent’.’’. 
(e) WILLFUL ATTEMPT TO EVADE
OR DEFEAT 
TAX.—Section 7201 of such Code is amended by adding 
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at the end the following new sentence: ‘‘In the case of an 
attempt by a corporation which involves a tax haven coun-
try (as defined in section 6662(l)(2)), the preceding sen-
tence shall be applied by substituting ‘$1,000,000’ for 
‘$500,000’.’’. 
(f) FRAUD AND FALSE STATEMENTS.—Section 7206 
of such Code is amended by adding at the end the fol-
lowing new sentence: ‘‘In the case of an offense by a cor-
poration described in the preceding sentence which in-
volves a tax haven country (as defined in section 
6662(l)(2)), the preceding sentence shall be applied by 
substituting ‘$1,000,000’ for ‘$500,000’.’’. 
(g) FRAUDULENT
RETURNS, STATEMENTS, 
OR 
OTHER DOCUMENTS.—Section 7207 of such Code is 
amended by adding at the end the following new sentence: 
‘‘In the case of an offense by a corporation described in 
either of the two preceding sentences which involves a tax 
haven country (as defined in section 6662(l)(2)), the ap-
propriate sentence shall be applied by substituting 
‘$150,000’ for ‘$50,000’.’’. 
(h) EFFECTIVE DATE.— 
(1) The amendments made by subsections (a) 
and (b) shall apply to underpayments attributable to 
transactions entered into after the date on which the 
list developed under section 2 is first published. 
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(2) The amendment made by subsection (c) 
shall apply to returns the due date for which (deter-
mined without regard to extensions) is after the date 
on which the list developed under section 2 is first 
published. 
(3) The amendment made by subsection (d) 
shall apply to refunds and credits attributable to 
transactions entered into after the date on which the 
list developed under section 2 is first published. 
(4) The amendment made by subsections (e), 
(f), and (g) shall apply to offenses committed after 
the date on which the list developed under section 2 
is first published. 
SEC. 4. PREFERENCES IN GOVERNMENT CONTRACTS. 
(a) PREFERENCE.—A Federal department or agency 
may give a preference in the award of a contract for the 
procurement of goods or services in a fiscal year to any 
potential contractor that has not engaged in outsourcing 
during the fiscal year preceding the fiscal year in which 
the contract is awarded. 
(b) REQUIREMENT TO REQUEST OUTSOURCING IN-
FORMATION FROM POTENTIAL CONTRACTORS.— 
(1) IN GENERAL.—In any solicitation for offers 
for a contract issued by a Federal department or 
agency in a fiscal year, the department or agency 
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shall request each offeror for the contract to provide 
information regarding whether the offeror engaged 
in outsourcing during the fiscal year preceding the 
fiscal year in which the contract is to be awarded. 
(2) PENALTY AND DEBARMENT.—Any offeror 
found to be in violation of paragraph (1), including 
making a false statement regarding the offeror’s en-
gagement in outsourcing— 
(A) shall, notwithstanding section 1001 of 
title 18, United States Code, be liable to the 
United States for a civil penalty in an amount 
not more than the value of the contract the of-
feror is seeking; and 
(B) shall be debarred, by the head of the 
department or agency soliciting the offer, from 
contracting with the Federal Government for a 
period of two years starting on the date on 
which the offeror is found to be in violation of 
paragraph (1). 
(3) EFFECTIVE
DATE.—This subsection shall 
apply to solicitations for contracts issued on and 
after the date occurring one year after the date of 
the enactment of this Act. 
(c) OUTSOURCING DEFINED.—In this section, the 
term ‘‘outsourcing’’ means the laying off of a United 
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States worker from a job, and the hiring or contracting 
for the same job to be performed in a foreign country. 
SEC. 5. DEFICIT REDUCTION. 
Amounts which the Secretary of the Treasury esti-
mates are received in the Treasury by reason of this Act 
are hereby set aside for the reduction of the public debt. 
Æ 
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