,,ii #aaf? ,,congress #a/ ,session ,s4 #badj ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,july #ag1 #bjai,mr4 ,durb9 7= himself1 ,mr4 ,re$1 ,ms4 ,w>r51 ,mr4 ,br[n1 ,ms4 ,baldw91 ,mr4 ,:iteh\se1 ,mr4 ,m]kley1 ,mrs4 ,fe9/e91 ,ms4 ,duckwor?1 ,mr4 ,s&]s1 & ,mr4 ,blum5?al7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to am5d ! ,int]nal ,rev5ue ,code ( #aihf to modify ! rules relat+ to inv]t$ corporations4 #a4 ,%ort title ,?is ,act may be cit$ z ! ,/op ,corporate ,inv]sions ,act ( #bjai4 #b4 ,modifications to rules relat+ to inv]t$ corporations 7a7 ,9 g5]al ,subsection 7b7 ( section #ghgd ( ! ,int]nal ,rev5ue ,code ( #aihf is am5d$ to read z foll[s3 7b7 ,inv]t$ corporations treat$ z dome/ic corporations 7#a7 ,9 g5]al ,not)/&+ section #ggja7;a77#d71 a =eign corporation %all be treat$ = purposes ( ?is title z a dome/ic corporation if-- 7,a7 su* corporation w\ld be a surrogate =eign corporation if subsection 7a77#b7 7 appli$ by sub/itut+ #hj p]c5t = #fj p]c5t1 or 7,b7 su* corporation is an inv]t$ dome/ic corporation4 7#b7 ,inv]t$ dome/ic corporation ,= purposes ( ?is subsection1 a =eign corporation %all be treat$ z an inv]t$ dome/ic corporation if1 pursuant to a plan 7or a s]ies ( relat$ transactions7-- 7,a7 ! entity completes aft] ,may #h1 #bjad1 ! direct or indirect acquisition (-- 7i7 sub/antially all ( ! prop]ties held directly or indirectly by a dome/ic corporation1 or 7ii7 sub/antially all ( ! assets (1 or sub/antially all ( ! prop]ties con/itut+ a trade or bus9ess (1 a dome/ic p>tn]%ip1 & 7,b7 aft] ! acquisition1 ei!r-- 7i7 m ?an #ej p]c5t ( ! /ock 7by vote or value7 ( ! entity is held-- 7,i7 9 ! case ( an acquisition ) respect to a dome/ic corporation1 by =m] %>ehold]s ( ! dome/ic corporation by reason ( hold+ /ock 9 ! dome/ic corporation1 or 7,,ii7 9 ! case ( an acquisition ) respect to a dome/ic p>tn]%ip1 by =m] p>tn]s ( ! dome/ic p>tn]%ip by reason ( hold+ a capital or pr(its int]e/ 9 ! dome/ic p>tn]%ip1 or 7ii7 ! managem5t & control ( ! exp&$ affiliat$ gr\p :i* includes ! entity occurs1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates1 & su* exp&$ affiliat$ gr\p has significant dome/ic bus9ess activities4 7#c7 ,exception = corporations ) sub/antial bus9ess activities 9 =eign c\ntry ( organization ,a =eign corporation describ$ 9 p>agraph 7#b7 %all n be treat$ z an inv]t$ dome/ic corporation if aft] ! acquisition ! exp&$ affiliat$ gr\p :i* includes ! entity has sub/antial bus9ess activities 9 ! =eign c\ntry 9 :i* or "u ! law ( :i* ! entity is creat$ or organiz$ :5 comp>$ to ! total bus9ess activities ( su* exp&$ affiliat$ gr\p4 ,= purposes ( subsection 7a77#b77;,b77iii7 & ! prec$+ s5t5ce1 ! t]m sub/antial bus9ess activities %all h ! mean+ giv5 su* t]m "u regulations 9 effect on ,janu>y #ah1 #bjag1 except t ! ,secret>y may issue regulations increas+ ! ?re%old p]c5t 9 any ( ! te/s "u su* regulations = det]m9+ if bus9ess activities con/itute sub/antial bus9ess activities = purposes ( ?is p>agraph4 7#d7 ,managem5t & control ,= purposes ( p>agraph 7#b77;,b77ii7-- 7,a7 ,9 g5]al ,! ,secret>y %all prescribe regulations = purposes ( det]m9+ cases 9 :i* ! managem5t & control ( an exp&$ affiliat$ gr\p is to be treat$ z occurr+1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates4 ,! regulations prescrib$ "u ! prec$+ s5t5ce %all apply to p]iods aft] ,may #h1 #bjad4 7,b7 ,executive (fic]s & s5ior managem5t ,su* regulations %all provide t ! managem5t & control ( an exp&$ affiliat$ gr\p %all be treat$ z occurr+1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates if sub/antially all ( ! executive (fic]s & s5ior managem5t ( ! exp&$ affiliat$ gr\p :o ex]cise day-to-day responsibility = mak+ decisions involv+ /rategic1 f9ancial1 & op]ational policies ( ! exp&$ affiliat$ gr\p are bas$ or prim>ily locat$ )9 ! ,unit$ ,/ates4 ,individuals :o 9 fact ex]cise su* day-to-day responsibilities %all be treat$ z executive (fic]s & s5ior managem5t reg>dless ( _! title4 7#e7 ,significant dome/ic bus9ess activities ,= purposes ( p>agraph 7#b77;,b77ii71 an exp&$ affiliat$ gr\p has significant dome/ic bus9ess activities if at lea/ #be p]c5t (-- 7,a7 ! employees ( ! gr\p are bas$ 9 ! ,unit$ ,/ates1 7,b7 ! employee comp5sation incurr$ by ! gr\p is incurr$ ) respect to employees bas$ 9 ! ,unit$ ,/ates1 7,c7 ! assets ( ! gr\p are locat$ 9 ! ,unit$ ,/ates1 or 7,d7 ! income ( ! gr\p is d]iv$ 9 ! ,unit$ ,/ates1 det]m9$ 9 ! same mann] z su* det]m9ations are made = purposes ( det]m9+ sub/antial bus9ess activities "u regulations ref]r$ to 9 p>agraph 7#c7 z 9 effect on ,janu>y #ah1 #bjag1 b appli$ by treat+ all ref]5ces 9 su* regulations to =eign c\ntry & relevant =eign c\ntry z ref]5ces to ! ,unit$ ,/ates4 ,! ,secret>y may issue regulations decreas+ ! ?re%old p]c5t 9 any ( ! te/s "u su* regulations = det]m9+ if bus9ess activities con/itute significant dome/ic bus9ess activities = purposes ( ?is p>agraph4 4 7b7 ,con=m+ am5dm5ts 7#a7 ,clause 7i7 ( section #ghgd7;a77#b77;,b7 ( su* ,code is am5d$ by /rik+ aft] ,m>* #d1 #bjjc1 & ins]t+ aft] ,m>* #d1 #bjjc1 & be=e ,may #h1 #bjad14 7#b7 ,subsection 7c7 ( section #ghgd ( su* ,code is am5d$-- 7,a7 9 p>agraph 7#b7-- 7i7 by /rik+ subsection 7a77#b77;,b77ii7 & ins]t+ subsections 7a77#b77;,b77ii7 & 7b77#b77;,b77i72 & 7ii7 by ins]t+ or 7b77#b77;,a7 aft] 7a77#b77;,b77i7 9 subp>agraph 7,b72 7,b7 9 p>agraph 7#c71 by ins]t+ or 7b77#b77;,b77i71 z ! case may be1 aft] 7a77#b77;,b77ii72 7,c7 9 p>agraph 7#e71 by /rik+ subsection 7a77#b77;,b77ii7 & ins]t+ subsections 7a77#b77;,b77ii7 & 7b77#b77;,b77i72 & 7,d7 9 p>agraph 7#f71 by ins]t+ or inv]t$ dome/ic corporation1 z ! case may be1 aft] surrogate =eign corporation4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s end+ aft] ,may #h1 #bjad4