Commonwealth of the Northern Mariana Is-
lands. 
(B) MIRROR CODE TAX SYSTEM.—For pur-
poses of this section, the term ‘‘mirror code tax 
system’’ means, with respect to any possession 
of the United States, the income tax system of 
such possession if the income tax liability of the 
residents of such possession under such system 
is determined by reference to the income tax 
laws of the United States as if such possession 
were the United States. 
(C) TREATMENT OF PAYMENTS.—For pur-
poses of section 1324(b)(2) of title 31, United 
States Code, the payments under this section 
shall be treated in the same manner as a refund 
due from sections referred to in such section 
1324(b)(2). 
SEC. 3. DENIAL OF DEDUCTION FOR OUTSOURCING EX-
PENSES. 
(a) IN GENERAL.—Part IX of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by adding at the end the following new section: 
VerDate Sep 11 2014 
03:50 Jul 09, 2015
Jkt 049200
PO 00000
Frm 00009
Fmt 6652
Sfmt 6201
E:\BILLS\H2963.IH
H2963
smartinez on DSK4TPTVN1PROD with BILLS
‘‘SEC. 280I. OUTSOURCING EXPENSES. 
‘‘(a) IN GENERAL.—No deduction otherwise allow-
able under this chapter shall be allowed for any specified 
outsourcing expense. 
‘‘(b) SPECIFIED OUTSOURCING EXPENSE.—For pur-
poses of this section— 
‘‘(1) IN
GENERAL.—The term ‘specified out-
sourcing expense’ means— 
‘‘(A) any eligible expense paid or incurred 
by the taxpayer in connection with the elimi-
nation of any business unit of the taxpayer (or 
of any member of any expanded affiliated group 
in which the taxpayer is also a member) located 
within the United States, and 
‘‘(B) any eligible expense paid or incurred 
by the taxpayer in connection with the estab-
lishment of any business unit of the taxpayer 
(or of any member of any expanded affiliated 
group in which the taxpayer is also a member) 
located outside the United States, 
if such establishment constitutes the relocation of 
business unit so eliminated. For purposes of the pre-
ceding sentence, a relocation shall not be treated as 
failing to occur merely because such elimination oc-
curs in a different taxable year than such establish-
ment. 
VerDate Sep 11 2014 
03:50 Jul 09, 2015
Jkt 049200
PO 00000
Frm 00010
Fmt 6652
Sfmt 6201
E:\BILLS\H2963.IH
H2963
smartinez on DSK4TPTVN1PROD with BILLS
‘‘(2) APPLICATION
OF
CERTAIN
DEFINITIONS 
AND RULES.— 
‘‘(A) DEFINITIONS.—For purposes of this 
section, the terms ‘eligible expenses’, ‘business 
unit’, and ‘expanded affiliated group’ shall have 
the respective meanings given such terms by 
section 45S(b). 
‘‘(B) OPERATING EXPENSES NOT TAKEN 
INTO ACCOUNT.—A rule similar to the rule of 
section 45S(b)(6) shall apply for purposes of 
this section. 
‘‘(c) SPECIAL RULES.— 
‘‘(1) APPLICATION
TO
DEDUCTIONS
FOR
DE-
PRECIATION
AND
AMORTIZATION.—In the case of 
any portion of a specified outsourcing expense which 
is not deductible in the taxable year in which paid 
or incurred, such portion shall neither be chargeable 
to capital account nor amortizable. 
‘‘(2) POSSESSIONS TREATED AS PART OF THE 
UNITED STATES.—For purposes of this section, the 
term ‘United States’ shall be treated as including 
each possession of the United States (including the 
Commonwealth of Puerto Rico and the Common-
wealth of the Northern Mariana Islands). 
VerDate Sep 11 2014 
03:50 Jul 09, 2015
Jkt 049200
PO 00000
Frm 00011
Fmt 6652
Sfmt 6201
E:\BILLS\H2963.IH
H2963
smartinez on DSK4TPTVN1PROD with BILLS
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
such regulations or other guidance as may be necessary 
or appropriate to carry out the purposes of this section, 
including regulations which provide (or create a rebuttable 
presumption) that certain establishments of business units 
outside the United States will be treated as relocations 
(based on timing or such other factors as the Secretary 
may provide) of business units eliminated within the 
United States.’’. 
(b) LIMITATION ON SUBPART F INCOME OF CON-
TROLLED FOREIGN CORPORATIONS DETERMINED WITH-
OUT REGARD TO SPECIFIED OUTSOURCING EXPENSES.— 
Section 952(c) of such Code is amended by adding at the 
end the following new paragraph: 
‘‘(4) EARNINGS
AND
PROFITS
DETERMINED 
WITHOUT REGARD TO SPECIFIED OUTSOURCING EX-
PENSES.—For purposes of this subsection, earnings 
and profits of any controlled foreign corporation 
shall be determined without regard to any specified 
outsourcing 
expense 
(as 
defined 
in 
section 
280I(b)).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for part IX of subchapter B of chapter 1 of such Code 
is amended by adding at the end the following new item: 
‘‘Sec. 280I. Outsourcing expenses.’’. 
VerDate Sep 11 2014 
03:50 Jul 09, 2015
Jkt 049200
PO 00000
Frm 00012
Fmt 6652
Sfmt 6211
E:\BILLS\H2963.IH
H2963
smartinez on DSK4TPTVN1PROD with BILLS
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred after 
the date of the enactment of this Act. 
Æ 
VerDate Sep 11 2014 
03:50 Jul 09, 2015
Jkt 049200
PO 00000
Frm 00013
Fmt 6652
Sfmt 6301
E:\BILLS\H2963.IH
H2963
smartinez on DSK4TPTVN1PROD with BILLS