I 
113TH CONGRESS 
2D SESSION 
H. R. 5443 
To amend the Internal Revenue Code of 1986 to end tax deferrals on 
profits accumulated offshore and to terminate the deferral of active 
income of controlled foreign corporations. 
IN THE HOUSE OF REPRESENTATIVES 
SEPTEMBER 10, 2014 
Mr. POCAN 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 end tax 
deferrals on profits accumulated offshore and to termi-
nate the deferral of active income of controlled foreign 
corporations. 
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 ‘‘Putting America First 
Corporate Tax Act’’. 
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SEC. 2. INCLUSION IN SUBPART F INCOME OF INVEST-
MENTS BY CONTROLLED FOREIGN CORPORA-
TIONS WITH RESPECT TO MEMBERS OF FOR-
EIGN 
GROUP 
WHICH 
INCLUDES 
UNITED 
STATES SHAREHOLDER. 
(a) IN GENERAL.—Section 956(a)(1)(A) of the Inter-
nal Revenue Code of 1986 is amended to read as follows: 
‘‘(A) such shareholder’s pro rata share of 
the average of— 
‘‘(i) the amounts of United States 
property, and 
‘‘(ii) in the case of a controlled foreign 
corporation which is a member of an ex-
panded affiliated group the common parent 
of which is not a United States person, the 
amount of foreign group property, 
held (directly or indirectly) by the controlled 
foreign corporation as of the close of each quar-
ter of such taxable year, over’’. 
(b) FOREIGN GROUP PROPERTY.—Section 956 of 
such Code is amended by redesignating subsections (d) 
and (e) as subsections (e) and (f), respectively, and by in-
serting after subsection (c) the following new subsection: 
‘‘(d) FOREIGN GROUP PROPERTY; EXPANDED AF-
FILIATED GROUP.—For purposes of this section— 
‘‘(1) FOREIGN GROUP PROPERTY.— 
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‘‘(A) IN
GENERAL.—The term ‘foreign 
group property’ means any stock or obligation 
of any foreign person which is not a controlled 
foreign corporation. 
‘‘(B) EXCEPTIONS.—Such term shall not 
include— 
‘‘(i) the stock or obligation of any en-
tity if less than 25 percent of the total 
combined voting power of such entity, im-
mediately after the acquisition of any stock 
in such entity by the controlled foreign cor-
poration, is owned (directly or indirectly) 
by the common parent referred to in sub-
section (a)(1)(A)(ii), and 
‘‘(ii) property described in subpara-
graph (C), (I), (J), or (K) of subsection 
(c)(2), applied by substituting ‘foreign per-
son’ for ‘United States person’ in such 
subparagraphs (C) and (J). 
‘‘(2) EXPANDED
AFFILIATED
GROUP.—The 
term ‘expanded affiliated group’ means an affiliated 
group as defined in section 1504(a), determined— 
‘‘(A) by substituting ‘more than 50 per-
cent’ for ‘at least 80 percent’ each place it ap-
pears, and 
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‘‘(B) without regard to paragraphs (2) and 
(3) of section 1504(b). 
A partnership or any other entity (other than a cor-
poration) shall be treated as a member of an ex-
panded affiliated group if such entity controls (as 
determined under section 954(d)(3)), or is controlled 
by (as so determined), members of such group (in-
cluding any entity treated as a member of such 
group by reason of this sentence). 
‘‘(3) APPLICATION TO NON-CORPORATE ENTI-
TIES.—In the case of any entity which is not a cor-
poration— 
‘‘(A) any reference in this subsection to 
stock shall be treated as a reference to any eq-
uity or profits interest in such entity, and 
‘‘(B) except as otherwise provided by the 
Secretary, paragraph (1)(B)(i) shall be applied 
by substituting ‘25 percent (by value) of the 
beneficial interests in such entity’ for ‘25 per-
cent of the total combined voting power of such 
entity’.’’. 
(c) APPLICATION
OF RULES
FOR PLEDGES
AND 
GUARANTEES.—Section 956(e) of such Code, as so redes-
ignated, is amended to read as follows: 
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‘‘(e) PLEDGES AND GUARANTEES.—For purposes of 
subsection (a), a controlled foreign corporation shall, 
under regulations prescribed by the Secretary, be consid-
ered as holding— 
‘‘(1) an obligation of a United States person if 
such controlled foreign corporation is a pledgor or 
guarantor of such obligation, and 
‘‘(2) an obligation of a foreign person if such 
controlled foreign corporation or, to the extent pro-
vided under such regulations, any United States 
shareholder of such controlled foreign corporation, is 
a pledgor or guarantor of such obligation.’’. 
(d) APPLICATION OF LIMITATION ON AMOUNT OF 
FOREIGN TAXES DEEMED PAID WITH RESPECT TO SEC-
TION 956 INCLUSIONS.—Notwithstanding section 214(b) 
of Public Law 111–226, section 960(c) of the Internal 
Revenue Code of 1986 shall apply to acquisitions of for-
eign group property (as defined in 956(d) of such Code, 
as amended by this section) after December 31, 2010, in 
addition to acquisitions of United States property (as de-
fined in section 956(c) of such Code) after such date. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years of controlled for-
eign corporations ending after the date of the enactment 
of this Act and to taxable years of United States share-
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holders in which or with which such taxable years of con-
trolled foreign corporations end. 
SEC. 3. TERMINATION OF DEFERRAL OF ACTIVE INCOME 
OF CONTROLLED FOREIGN CORPORATIONS. 
(a) IN GENERAL.—Section 952 of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new subsection: 
‘‘(d) SPECIAL APPLICATION OF SUBPART.— 
‘‘(1) IN GENERAL.—For taxable years begin-
ning after December 31, 2014, notwithstanding any 
other provision of this subpart, the term ‘subpart F 
income’ means, in the case of any controlled foreign 
corporation, the income of such corporation derived 
from any foreign country. 
‘‘(2) APPLICABLE RULES.—Rules similar to the 
rules under the last sentence of subsection (a) and 
subsection (d) shall apply to this subsection.’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall apply to taxable years beginning after 
December 31, 2014. 
Æ 
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