I 
112TH CONGRESS 
1ST SESSION 
H. R. 62 
To amend the Internal Revenue Code of 1986 to reduce international tax 
avoidance and restore a level playing field for American businesses. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 5, 2011 
Mr. DOGGETT 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 
international tax avoidance and restore a level playing 
field for American businesses. 
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 ‘‘International Tax 
Competitiveness Act of 2011’’. 
SEC. 2. TREATMENT OF FOREIGN CORPORATIONS MAN-
AGED AND CONTROLLED IN THE UNITED 
STATES AS DOMESTIC CORPORATIONS. 
(a) IN GENERAL.—Section 7701 of the Internal Rev-
enue Code of 1986 (relating to definitions) is amended by 
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redesignating subsection (p) as subsection (q) and by in-
serting after subsection (o) the following new subsection: 
‘‘(p) CERTAIN CORPORATIONS MANAGED AND CON-
TROLLED IN THE UNITED STATES TREATED AS DOMES-
TIC FOR INCOME TAX.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(a)(4), in the case of a corporation described in 
paragraph (2) if— 
‘‘(A) the corporation would not otherwise 
be treated as a domestic corporation for pur-
poses of this title, but 
‘‘(B) the management and control of the 
corporation occurs, directly or indirectly, pri-
marily within the United States, 
then, solely for purposes of chapter 1 (and any other 
provision of this title relating to chapter 1), the cor-
poration shall be treated as a domestic corporation. 
‘‘(2) CORPORATION DESCRIBED.— 
‘‘(A) IN GENERAL.—A corporation is de-
scribed in this paragraph if— 
‘‘(i) the stock of such corporation is 
regularly traded on an established securi-
ties market, or 
‘‘(ii) the aggregate gross assets of 
such corporation (or any predecessor there-
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of), including assets under management 
for investors, whether held directly or indi-
rectly, at any time during the taxable year 
or 
any 
preceding 
taxable 
year 
is 
$50,000,000 or more. 
‘‘(B) GENERAL
EXCEPTION.—A corpora-
tion shall not be treated as described in this 
paragraph if— 
‘‘(i) such corporation was treated as a 
corporation described in this paragraph in 
a preceding taxable year, 
‘‘(ii) such corporation— 
‘‘(I) is not regularly traded on an 
established securities market, and 
‘‘(II) has, and is reasonably ex-
pected to continue to have, aggregate 
gross assets (including assets under 
management for investors, whether 
held directly or indirectly) of less than 
$50,000,000, and 
‘‘(iii) the Secretary grants a waiver to 
such corporation under this subparagraph. 
‘‘(C) EXCEPTION
FROM
GROSS
ASSETS 
TEST.—Subparagraph (A)(ii) shall not apply to 
a corporation which is a controlled foreign cor-
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poration (as defined in section 957) and which 
is a member of an affiliated group (as defined 
section 1504, but determined without regard to 
section 1504(b)(3)) the common parent of 
which— 
‘‘(i) is a domestic corporation (deter-
mined without regard to this subsection), 
and 
‘‘(ii) has substantial assets (other 
than cash and cash equivalents and other 
than stock of foreign subsidiaries) held for 
use in the active conduct of a trade or 
business in the United States. 
‘‘(3) MANAGEMENT AND CONTROL.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
prescribe regulations for purposes of deter-
mining cases in which the management and 
control of a corporation is to be treated as oc-
curring primarily within the United States. 
‘‘(B) EXECUTIVE OFFICERS AND SENIOR 
MANAGEMENT.—Such regulations shall provide 
that— 
‘‘(i) the management and control of a 
corporation shall be treated as occurring 
primarily within the United States if sub-
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stantially all of the executive officers and 
senior management of the corporation who 
exercise day-to-day responsibility for mak-
ing decisions involving strategic, financial, 
and operational policies of the corporation 
are located primarily within the United 
States, and 
‘‘(ii) individuals who are not executive 
officers and senior management of the cor-
poration (including individuals who are of-
ficers or employees of other corporations in 
the same chain of corporations as the cor-
poration) shall be treated as executive offi-
cers and senior management if such indi-
viduals exercise the day-to-day responsibil-
ities of the corporation described in clause 
(i). 
‘‘(C) CORPORATIONS PRIMARILY HOLDING 
INVESTMENT
ASSETS.—Such regulations shall 
also provide that the management and control 
of a corporation shall be treated as occurring 
primarily within the United States if— 
‘‘(i) the assets of such corporation (di-
rectly or indirectly) consist primarily of as 
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sets being managed on behalf of investors, 
and 
‘‘(ii) decisions about how to invest the 
assets are made in the United States.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning on or 
after the date which is 2 years after the date of the enact-
ment of this Act. 
SEC. 3. CURRENT TAXATION OF ROYALTIES AND OTHER IN-
COME FROM INTANGIBLES RECEIVED FROM 
A CONTROLLED FOREIGN CORPORATION. 
(a) REPEAL OF LOOK-THRU RULE FOR ROYALTIES 
RECEIVED
FROM
CONTROLLED
FOREIGN
CORPORA-
TIONS.—Paragraph (6) of section 954(c) of the Internal 
Revenue Code of 1986 is amended— 
(1) by striking ‘‘rents, and royalties’’ in sub-
paragraph (A) and inserting ‘‘and rents’’, and 
(2) by striking ‘‘, rent, or royalty’’ both places 
it appears in subparagraph (B) and inserting ‘‘or 
rent’’. 
(b) ENTITIES
NOT
PERMITTED
TO
BE
DIS-
REGARDED IN DETERMINING ROYALTIES.—Subsection (c) 
of section 954 of such Code is amended by adding at the 
end the following new paragraph: 
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‘‘(7) ALL ROYALTIES TAKEN INTO ACCOUNT.— 
For purposes of determining the foreign personal 
holding company income which consists of royalties, 
this subsection shall be applied without regard to 
any election to disregard any entity which would be 
taken into account for Federal income tax purposes 
but for such election.’’. 
(c) CERTAIN
OTHER
INCOME
DERIVED
FROM 
UNITED STATES INTANGIBLES TAKEN INTO ACCOUNT AS 
SUBPART F INCOME.—Subsection (d) of section 954 of 
such Code is amended by adding at the end the following 
new paragraph: 
‘‘(5) SPECIAL RULE FOR CERTAIN PRODUCTS 
PRODUCED
PURSUANT
TO
INTANGIBLES
MADE 
AVAILABLE BY UNITED STATES PERSONS.—For pur-
poses of this subsection, personal property shall be 
treated as having been purchased from a related per-
son if any intangible property (within the meaning 
of section 936(h)(3)(B)) made available to a con-
trolled foreign corporation, directly or indirectly, by 
a related person which is a United States person 
contributes, directly or indirectly, to the production 
of such personal property by the controlled foreign 
corporation. The preceding sentence shall not apply 
to any personal property produced directly by the 
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controlled foreign corporation, without regard to any 
election to disregard any entity which would be 
taken into account for Federal income tax purposes 
but for such election.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years of foreign corpora-
tions beginning after December 31, 2011, and to taxable 
years of United States shareholders within which or with 
which such tax years of such foreign corporations end. 
SEC. 4. TAXATION OF BOOT RECEIVED IN REORGANIZA-
TIONS. 
(a) IN GENERAL.—Paragraph (2) of section 356(a) 
of the Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘If an exchange’’ and inserting 
‘‘Except as otherwise provided by the Secretary— 
‘‘(A) IN GENERAL.—If an exchange’’; 
(2) by striking ‘‘then there shall be’’ and all 
that follows through ‘‘February 28, 1913’’ and in-
serting ‘‘then the amount of other property or 
money shall be treated as a dividend to the extent 
of the earnings and profits of the corporation’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(B) CERTAIN REORGANIZATIONS.—In the 
case of a reorganization described in section 
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368(a)(1)(D) with respect to which the require-
ments of subparagraphs (A) and (B) of section 
354(b)(1) are met (or any other reorganization 
specified by the Secretary), in applying sub-
paragraph (A)— 
‘‘(i) the earnings and profits of each 
corporation which is a party to the reorga-
nization shall be taken into account, and 
‘‘(ii) the amount which is a dividend 
(and source thereof) shall be determined 
under rules similar to the rules of para-
graphs (2) and (5) of section 304(b).’’. 
(b) EARNINGS AND PROFITS.—Paragraph (7) of sec-
tion 312(n) of such Code is amended by adding at the 
end the following: ‘‘A similar rule shall apply to an ex-
change to which section 356(a)(1) applies.’’. 
(c) CONFORMING AMENDMENT.—Paragraph (1) of 
section 356(a) of such Code is amended by striking ‘‘then 
the gain’’ and inserting ‘‘then (except as provided in para-
graph (2)) the gain’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to exchanges after the date of the 
enactment of this Act. 
Æ 
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