HR 5602
110th CONGRESS
2d Session
H. R. 5602
To amend the Internal Revenue Code of 1986 and the Social Security
Act to treat certain domestically controlled foreign persons performing services
under contract with the United States Government as American employers for
purposes of certain employment taxes and benefits.
IN THE HOUSE OF REPRESENTATIVES
March 13, 2008
Mr. ELLSWORTH (for himself, Mr. EMANUEL, Mr. MCDERMOTT, Mr. LEWIS of Georgia,
and Mr. POMEROY) introduced the following bill; which was referred to the
Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 and the Social Security
Act to treat certain domestically controlled foreign persons performing services
under contract with the United States Government as American employers for
purposes of certain employment taxes and benefits.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Fair Share Act of 2008'.
SEC. 2. CERTAIN DOMESTICALLY CONTROLLED FOREIGN PERSONS PERFORMING SERVICES
UNDER CONTRACT WITH UNITED STATES GOVERNMENT TREATED AS AMERICAN EMPLOYERS.
(a) FICA Taxes- Section 3121 of the Internal Revenue Code of 1986 (relating
to definitions) is amended by adding at the end the following new subsection:
`(z) Treatment of Certain Foreign Persons as American Employers-
`(1) IN GENERAL- If any employee of a foreign person is performing services
in connection with a contract between the United States Government (or any
instrumentality thereof) and any member of any domestically controlled group
of entities which includes such foreign person, such foreign person shall
be treated for purposes of this chapter as an American employer with respect
to such services performed by such employee.
`(2) DOMESTICALLY CONTROLLED GROUP OF ENTITIES- For purposes of this subsection--
`(A) IN GENERAL- The term `domestically controlled group of entities'
means a controlled group of entities the common parent of which is a domestic
corporation.
`(B) CONTROLLED GROUP OF ENTITIES- The term `controlled group of entities'
means a controlled group of corporations as defined in section 1563(a)(1),
except that--
`(i) `more than 50 percent' shall be substituted for `at least 80 percent'
each place it appears therein, and
`(ii) the determination shall be made without regard to subsections
(a)(4) and (b)(2) of section 1563.
A partnership or any other entity (other than a corporation) shall be
treated as a member of a controlled group of entities if such entity is
controlled (within the meaning of section 954(d)(3)) by members of such
group (including any entity treated as a member of such group by reason
of this sentence).
`(3) LIABILITY OF COMMON PARENT- In the case of a foreign person who is
a member of any domestically controlled group of entities, the common parent
of such group shall be jointly and severally liable for any tax under this
chapter for which such foreign person is liable by reason of this subsection.
`(4) CROSS REFERENCE- For relief from taxes in cases covered by certain
international agreements, see sections 3101(c) and 3111(c).'.
(b) Social Security Benefits- Subsection (e) of section 210 of the Social
Security Act (42 U.S.C. 410(e)) is amended--
(1) by striking `(e) The term' and inserting `(e)(1) The term',
(2) by redesignating paragraphs (1) through (6) as subparagraphs (A) through
(F), respectively, and
(3) by adding at the end the following new paragraph:
`(2)(A) If any employee of a foreign person is performing services in connection
with a contract between the United States Government (or any instrumentality
thereof) and any member of any domestically controlled group of entities
which includes such foreign person, such foreign person shall be treated
for purposes of this chapter as an American employer with respect to such
services performed by such employee.
`(B) For purposes of this paragraph--
`(i) The term `domestically controlled group of entities' means a controlled
group of entities the common parent of which is a domestic corporation.
`(ii) The term `controlled group of entities' means a controlled group
of corporations as defined in section 1563(a)(1) of the Internal Revenue
Code of 1986, except that--
`(I) `more than 50 percent' shall be substituted for `at least 80 percent'
each place it appears therein, and
`(II) the determination shall be made without regard to subsections
(a)(4) and (b)(2) of section 1563 of such Code.
A partnership or any other entity (other than a corporation) shall be
treated as a member of a controlled group of entities if such entity is
controlled (within the meaning of section 954(d)(3) of such Code) by members
of such group (including any entity treated as a member of such group
by reason of this sentence).'.
(c) Effective Date- The amendment made by this section shall apply to services
performed after the date of the enactment of this Act.
END
