I 
113TH CONGRESS 
2D SESSION 
H. R. 5549 
To amend the Internal Revenue Code to include in income the unrepatriated 
earnings of groups that include an inverted corporation. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 18, 2014 
Mr. DOGGETT introduced the following bill; which was referred to the 
Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code to include in income 
the unrepatriated earnings of groups that include an 
inverted corporation. 
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 ‘‘Pay What You Owe 
Before You Go Act’’. 
SEC. 2. RECAPTURE OF UNREPATRIATED EARNINGS OF 
GROUPS 
INCLUDING 
AN 
INVERTED 
COR-
PORATION. 
(a) IN GENERAL.—Section 7874 of the Internal Rev-
enue Code of 1986 is amended by redesignating subsection 
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(g) as subsection (h) and by inserting after subsection (f) 
the following new subsection: 
‘‘(g) RECAPTURE
OF
TAX
ON
UNREPATRIATED 
EARNINGS.— 
‘‘(1) IN GENERAL.—The subpart F income of 
any applicable controlled foreign corporation for its 
last taxable year ending before the acquisition date 
shall be increased by the accumulated deferred for-
eign income of the corporation. 
‘‘(2) APPLICABLE CONTROLLED FOREIGN COR-
PORATION.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The term ‘applicable 
controlled foreign corporation’ means any con-
trolled foreign corporation with respect to 
which— 
‘‘(i) a covered entity was a United 
States shareholder at any time during the 
5-year period ending on the acquisition 
date, or 
‘‘(ii) a member of the same expanded 
affiliated group as a covered entity was a 
United States shareholder at any time dur-
ing the 5-year period ending on the acqui-
sition date. 
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‘‘(B) COVERED ENTITY.—The term ‘cov-
ered entity’ means, with respect to a controlled 
foreign corporation, any entity which— 
‘‘(i) is treated as a surrogate foreign 
corporation under subsection (a)(2)(B), de-
termined— 
‘‘(I) by substituting ‘September 
18, 2014’ for ‘March 4, 2003’ each 
place it appears, 
‘‘(II) by substituting ‘more than 
50 percent’ for ‘at least 60 percent’ in 
clause (ii) thereof, and 
‘‘(III) by disregarding clause (iii) 
thereof, and 
‘‘(ii) is not treated as a domestic cor-
poration by reason of subsection (b). 
‘‘(3) ACCUMULATED
DEFERRED
FOREIGN
IN-
COME.—For purposes of this section— 
‘‘(A) IN
GENERAL.—The term ‘accumu-
lated deferred foreign income’ means the excess 
of— 
‘‘(i) the undistributed earnings of the 
controlled foreign corporation, over 
‘‘(ii) the undistributed U.S. earnings 
of such controlled foreign corporation. 
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‘‘(B) UNDISTRIBUTED
EARNINGS.—The 
term ‘undistributed earnings’ means the earn-
ings and profits of the controlled foreign cor-
poration described in section 959(c)(3), deter-
mined— 
‘‘(i) as of the close of the taxable year 
described in paragraph (1), 
‘‘(ii) without diminution by reason of 
distributions made during such taxable 
year, and 
‘‘(iii) without regard to this sub-
section. 
For purposes of this chapter, any determination 
with respect to the treatment of distributions 
described in clause (ii) shall be made after the 
application of this subsection to the earnings 
and profits described in the matter preceding 
clause (i). 
‘‘(C) UNDISTRIBUTED
U.S. EARNINGS.— 
The term ‘undistributed U.S. earnings’ has the 
meaning given the term ‘post-1986 undistrib-
uted U.S. earnings’ in section 245(a)(5), deter-
mined— 
‘‘(i) as of the close of the taxable year 
described in paragraph (1), and 
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‘‘(ii) without regard to ‘post-1986’ 
each place it appears in the matter before 
subparagraph (A). 
‘‘(4) ACQUISITION DATE.—For purposes of this 
section, the term ‘acquisition date’ means the date 
the covered entity completes the acquisition de-
scribed in subsection (a)(2)(B)(i) (after the applica-
tion of paragraph (2)(B)(i) of this subsection).’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply with respect to taxable years end-
ing after September 18, 2014. 
Æ 
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