,i  #aaf? ,,congress  #b;d ,session  ,h4
 ,r4 #gggb  ,,9 ,,! ,,h\se ,,(          
,,repres5tatives  ,july #bd1 #bjbj ,mr4 
,danny ,k4 ,davis ( ,ill9ois 7= himself1
 ,mr4 ,m>*ant1 ,mr4 ,suozzi1 & ,mr4     
,e/es7 introduc$ ! foll[+ bill2 :i* 0   
ref]r$ to ! ,committee on ,ways & ,means
  ,a ,,bill  ,to am5d ! ,int]nal ,rev5ue
 ,code ( #aihf to provide =             
,int]national ,regulat$ ,inve/m5t       
,companies4  #a4 ,%ort title ,?is ,act  
may be cit$ z ! ,tax ,p>ity = ,u4,s4    
,mutual ,funds ,act ( #bjbj4  #b4       
,int]national regulat$ inve/m5t         
companies  7a7 ,9 g5]al ,sub*apt] ,n (  
*apt] #a ( ! ,int]nal ,rev5ue ,code (   
#aihf is am5d$ by r$esignat+ "p ,v z "p 
,,vi & ins]t+ aft] "p ,,iv ! foll[+ new 
"p3  ,v ,int]national regulat$ inve/m5t 
companies  ,sec4 #iih4 ,def9ition (     
int]national regulat$ inve/m5t company4 
,sec4 #iih;,a4 ,taxation ( ,i,r,i,cs4   
,sec4 #iih;,b4 ,o!r rules4  #iih4       
,def9ition ( int]national regulat$      
inve/m5t company  7a7 ,g5]al rule ,=    

purposes ( ?is title1 ! t]ms            
int]national regulat$ inve/m5t company &
 ,,iric mean1 ) respect to any taxable  
ye>1 a dome/ic corporation :i*1 at all  
times dur+ ! taxable ye>1 meets ! foll[+
 requirem5ts3 7#a7 ,! corporation is    
regi/]$ "u ! ,inve/m5t ,company ,act (  
#aidj4  7#b7 ,except z provid$ 9        
subsection 7c71 ! corporation holds no  
assets o!r ?an ! /ock ( a s+le regulat$ 
inve/m5t company-- 7,a7 to :i* "p ,i (  
sub*apt] ,m applies1 &  7,b7 :i* is n a 
qualifi$ inve/m5t entity 7z def9$ 9     
section #hig7;h77#d77;,a77ii774  7#c7   
,all out/&+ /ock ( ! corporation is held
 by nonresid5t ali5 individuals 7& _!   
=eign e/ates7 & qualifi$ =eign p5sion   
funds 7)9 ! mean+ ( section             
#hig7l77#b774  7#d7 ,! corporation has 9
 effect an election to be treat$ z an   
,,iric4  7b7 ,election ,an election to  
be treat$ z an ,,iric %all apply to !   
taxable ye> = :i* made & all subsequ5t  
taxable ye>s until t]m9at$4 ,su*        
election %all be made = any taxable ye> 

n lat] ?an ! due date 7) ext5sions7 = ! 
return ( tax impos$ by ?is subtitle = ! 
taxable ye>4  7c7 ,p]mitt$ assets ,=    
purposes ( subsection 7a77#b71 an ,,iric
 may hold-- 7#a7 an am\nt ( ca% & ca%   
equival5ts reasonably necess>y or       
appropriate = ! corporation to conduct  
its normal affairs1 &  7#b7 su* o!r     
assets z are incid5tal to !             
corporation's conduct ( its normal      
affairs or o!rwise all[$ by ! ,secret>y4
  7d7 ,t]m9ation  7#a7 ,9 g5]al ,except 
z provid$ 9 p>agraph 7#b71 if a         
corporation fails to meet ! requirem5ts 
( subsection 7a7 at any "t dur+ !       
taxable ye>1 ! corporation %all n be    
treat$ z an ,,iric = su* taxable ye>4   
7#b7 ,inadv]t5t failure  7,a7 ,9 g5]al  
,a corporation :i* fails to meet !      
requirem5ts ( subsection 7a7 = any      
taxable ye> %all nev]!less be consid]$  
to h satisfi$ ! requirem5ts ( su*       
subsection = su* taxable ye> if-- 7i7 ! 
failure 0 due to reasonable cause & n   
due to willful neglect1  7ii7 no lat]   

?an #cj days aft] ! discov]y ( ! ev5t   
caus+ su* failure1 ! corporation meets !
 requirem5ts ( subsection 7a71  7iii7 9 
! case ( a failure to meet ! requirem5ts
 ( subsection 7a77#c7 = any p]iod1 !    
failure 0 caus$ by p]sons n describ$    
!re9 hold+1 9 ! aggregate1 less ?an #a  
p]c5t ( ! /ock 7by value7 ( !           
corporation1 &  7iv7 ! corporation pays 
! additional tax impos$ by reason (     
subp>agraph 7,b74  7,b7 ,imposition (   
additional tax on c]ta9 failures ,9 !   
case ( a failure describ$ 9 subp>agraph 
7,a77iii7 = any taxable ye>1 ! tax      
impos$ by section #iih;,a7a7 on ! ,,iric
 %all be equal to ! sum (--  7i7 ! tax  
det]m9$ "u su* section 7)\t reg>d to ?is
 subp>agraph7 on am\nts receiv$ by !    
,,iric = ! taxable ye> o!r ?an am\nts s 
receiv$ :i* are attributable to /ock    
held by p]sons n describ$ 9 subsection  
7a77#c7 = ! p]iod s held1 plus  7ii7    
#ajj p]c5t ( ! am\nts receiv$ :i* are s 
attributable4  ,! ,secret>y %all        
prescribe rules = ! prop] allocation (  

d$uctions to am\nts describ$ 9 ?is      
subp>agraph4  #iih;,a4 ,taxation (      
,i,r,i,cs  7a7 ,9 g5]al ,9 ! case ( an  
,,iric1 !re %all be impos$1 9 lieu ( !  
tax impos$ by section #aa1 a tax equal  
to #cj p]c5t ( ! excess (-- 7#a7 !      
am\nts receiv$ by ! ,,iric :i* 7be=e !  
application ( any treaty7 w\ld be       
subject to tax "u section #hga7;a7 if   
receiv$ by a nonresid5t ali5 individual1
 ov]  7#b7 ! d$uctions prop]ly allocable
 to su* am\nts 7o!r ?an d$uctions all[$ 
"u sections #afc1 #agb1 #bdc1 & su* o!r 
provisions z ! ,secret>y may prescribe 9
 regulations to prev5t abuse74  7b7     
,treaties  7#a7 ,9 g5]al ,9 ! case ( a  
treaty ,,iric1 subsection 7a7 %all be   
appli$ by sub/itut+ #ae p]c5t = #cj     
p]c5t4  7#b7 ,treaty ,,iric ,= purposes 
( p>agraph 7#a71 ! t]m treaty ,,iric    
means an ,,iric-- 7,a7 all ! out/&+ /ock
 ( :i* is held by p]sons resid5t 9 a    
c\ntry t has 9 effect ) ! ,unit$ ,/ates 
an income tax treaty pursuant to :i* su*
 p]sons w\ld1 by reason ( section       

#hid7;a71 be subject to tax "u section  
#hga7;a7 on divid5ds at a rate n great] 
?an #ae p]c5t1 &  7,b7 :i* elects to be 
a treaty ,,iric4  ,rules simil> to !    
rules ( section #iih7;b7 %all apply to  
an election "u subp>agraph 7,b74        
#iih;,b4 ,o!r rules  7a7 ,coord9ation ) 
sub*apt] ,m ,except z provid$ 9         
subsection 7e71 an ,,iric %all n be     
treat$ z a regulat$ inve/m5t company =  
purposes ( ?is title4  7b7 ,no c>ryov]s 
7#a7 ,c>ryov]s to ,,iric ye>s ,no       
c>ry=w>d1 & no c>ryback1 aris+ = a      
taxable ye> = :i* ! corporation is n an 
,,iric may be c>ri$ to a taxable ye> =  
:i* su* corporation is an ,,iric4  7#b7 
,c>ryov]s f ,,iric ye>s ,no c>ry=w>d1 & 
no c>ryback1 %all arise = a taxable ye> 
= :i* a corporation is an ,,iric4  7c7  
,c]ta9 taxes n ,to apply ,sections #ee1 
#eca1 & #eda %all n apply to an ,,iric4 
7d7 ,cr$its n all[$ ,no cr$its "u ?is   
*apt] %all be all[$ to an ,,iric4  7e7  
,r$emptions ,9 apply+ section           
#cjb7;b77#e71 an ,,iric %all be treat$ z

 a publicly (f]$ regulat$ inve/m5t      
company4  7f7 ,reliance on c]tification 
7#a7 ,reliance ,) respect to !          
requirem5t 9 sections #iih7;a77#c7 &    
#iih;,a7b77#b77;,a71 a corporation may  
rely on ! c]tification ( its %>ehold]s1 
unless or until su* "t t ! corporation  
has reason to "k t ! c]tification is    
false or is no long] true4  7#b7        
,r$emption ^u false c]tification ,if a  
corporation has reason to "k t !        
c]tification made by "o ( its %>ehold]s 
is false or is no long] true1 !         
corporation mu/ r$eem ! /ock held by su*
 %>ehold] z soon z reasonably           
practicable 7& 9 no case m ?an #cj days 
aft] ! corporation obta9s su* reason to 
"k74 ,failure to r$eem su* /ock 9 a     
timely mann] %all result 9 ! corporation
 fail+ ! requirem5t ( section           
#iih7;a77#c7 or #iih;,a7b77#b77;,a71    
:i*ev] is applicable4  7#c7             
,c]tification by c]ta9 in/itutions ,=   
purposes ( ?is subsection1 a            
c]tification ) reg>d to a p]son :i* is  

made by an in/itution describ$ 9 section
 #hga7;h77#e77;,b7 9 a =m satisfactory  
to ! ,secret>y "u section #hga7;h7 %all 
be deem$ to be a c]tification by su*    
p]son4  4  7b7 ,cl]ical am5dm5t ,! table
 ( p>ts = sub*apt] ,n ( *apt] #a ( !    
,int]nal ,rev5ue ,code ( #aihf is am5d$ 
by r$esignat+ ! item relat+ to "p ,v z  
relat+ to "p ,,vi & ins]t+ aft] ! item  
relat+ to "p ,,iv ! foll[+ new item3    
,"p ,v--,int]national regulat$ inve/m5t 
companies  4  7c7 ,effective date ,!    
am5dm5ts made by ?is section %all apply 
to taxable ye>s beg9n+ aft] ! date ( !  
enactm5t ( ?is ,act4