I 
108TH CONGRESS 
1ST SESSION H. R. 2836
To amend the Internal Revenue Code of 1986 to reduce corporate refunds 
by fines and penalties imposed by reason of improper accounting or 
reporting practices or misstatements of its financial position. 
IN THE HOUSE OF REPRESENTATIVES 
JULY 23, 2003
Mr. MEEKS of New York 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 reduce 
corporate refunds by fines and penalties imposed by rea-
son of improper accounting or reporting practices or 
misstatements of its financial position.
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 ‘‘Deadbeat Corporations 
Tax Accountability Act of 2003’’.
SEC. 2. REDUCTION OF CORPORATE REFUNDS BY FINES 
AND PENALTIES IMPOSED BY REASON OF IM-
PROPER ACCOUNTING OR REPORTING PRAC-
TICES OR MISSTATEMENTS OF ITS FINAN-
CIAL POSITION. 
(a) IN GENERAL.—Section 6402 of the Internal Rev-
enue Code of 1986 (relating to authority to make credits 
or refunds) is amended by adding the following new sub-
section: 
‘‘(l) REDUCTION
OF OVERPAYMENT
IN CASE
OF 
OVERSTATED TAXABLE INCOME DUE TO ACCOUNTING 
PRACTICES OR RELATED MISSTATEMENT OF FINANCIAL 
POSITION.—
‘‘(1) IN GENERAL.—Upon receiving notice from 
the Securities and Exchange Commission that a cor-
poration has not paid the full amount of a fine or 
penalty either imposed by a court of competent ju-
risdiction, or agreed to by the corporation, with re-
spect to—
‘‘(A) the corporation’s accounting or re-
porting practices, or 
‘‘(B) a related misstatement of its financial 
position, 
the Secretary shall reduce the amount of any over-
payment to be refunded to such corporation by such 
unpaid balance.
‘‘(2) PRIORITIES FOR OFFSET.—Any overpay-
ment by a corporation shall be reduced pursuant to 
this subsection after such overpayment is reduced 
pursuant to subsection (a) with respect to any liabil-
ity for any internal revenue tax on the part of the 
person who made the overpayment, subsection (d) 
with respect to any past-due, legally enforceable debt 
owed to a Federal agency, subsection (e) with re-
spect to past-due, legally enforceable state income 
tax obligations, and before such overpayment is 
credited to the future liability for any Federal inter-
nal revenue tax of such person pursuant to sub-
section (b). 
‘‘(3) REMITTANCE
OF
AMOUNT
BY
WHICH 
OVERPAYMENT IS REDUCED.—The amount by which 
any overpayment is reduced under paragraph (1) 
shall be remitted by the Secretary to any 
disgorgement fund or account that has been estab-
lished under section 308 of Public Law 107–204, 
116 stat. 745 (2002) with respect to the corpora-
tion, or, if no such fund or account is established, 
retained by the Secretary. 
‘‘(4) NOTIFICATION.—The Securities and Ex-
change Commission shall provide notice to the Sec-
retary within 30 days after—
‘‘(A) court approval of any settlement pro-
viding for less than full payment of a fine or 
penalty described in paragraph (1), or 
‘‘(B) the Commission determines that such 
fine or penalty, or some portion thereof, has be-
come past due, whichever is earlier. 
‘‘(5) TENTATIVE CARRYBACK ADJUSTMENTS.—
If a tentative refund or credit of tax under section 
6411 has been issued with respect to a corporation 
that has failed to fully pay a fine or penalty de-
scribed in paragraph (1), the amount of such unpaid 
balance shall constitute an excessive allowance of a 
tentative carryback adjustment that may be assessed 
as a deficiency in the manner set forth in section 
6213(b)(3) (relating to the assessment of an excess 
tentative carryback or refund adjustment as a math-
ematical or clerical error). 
‘‘(6) REMITTANCE OF RECAPTURED TENTATIVE 
CARRYBACK ADJUSTMENT.—The amount of any ten-
tative carryback adjustment assessed and collected 
pursuant to paragraph (5) shall be remitted or re-
tained by the Secretary in accordance with para-
graph (3). The remittance of any such amount to a 
fund or account described in paragraph (3) shall not 
result in an unpaid tax liability of the corporation.
‘‘(7) COORDINATION WITH TITLE 11.—The Sec-
retary shall take such actions as may be necessary 
or appropriate to carry out the purposes of this sec-
tion where the corporation that has failed to pay the 
full amount of a fine or penalty described in para-
graph (1) is a debtor in a case under title 11 of the 
United States Code, including, but not limited to, 
the filing of an administrative expense claim for any 
amount that constitutes an excessive allowance of a 
tentative carryback adjustment.’’
(b) EFFECTIVE DATE.—This section shall be effec-
tive for fines and penalties imposed or agreed to with re-
spect to a corporation’s accounting or reporting practices, 
or a related misstatement of its financial position, that 
are not fully paid on the date of introduction of this Act, 
and for all such fines and penalties that later become un-
paid or past due.
Æ