109 HR 1234 IH: Corporate Accountability Tax Gap Act of 2005 U.S. House of Representatives 2005-03-10 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

I 109th CONGRESS 1st Session H. R. 1234 IN THE HOUSE OF REPRESENTATIVES March 10, 2005 Mr. Doggett (for himself, Mr. Stark, Mr. McDermott, Mr. Lewis of Georgia, Mr. Emanuel, Mr. Allen, Ms. Baldwin, Ms. Berkley, Ms. Bordallo, Mr. Brown of Ohio, Ms. Carson, Mr. Davis of Illinois, Ms. DeLauro, Mr. Fattah, Mr. Filner, Mr. Gene Green of Texas, Mr. Grijalva, Mr. Kucinich, Ms. Lee, Mrs. Maloney, Ms. Norton, Mr. Owens, Mr. Ryan of Ohio, Mr. Sanders, Ms. Slaughter, Ms. Solis, Mr. Tierney, Mrs. Jones of Ohio, Mr. Waxman, and Ms. Woolsey) 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 require greater transparency of corporate tax accounting measures, to facilitate analysis of financial statements, to permit inspection of true corporate tax liability and understand the tax strategies undertaken by corporations, to discourage abusive tax sheltering activities, and to restore investor confidence in publicly traded corporations.

1.

Short title

This Act may be cited as the Corporate Accountability Tax Gap Act of 2005.

2.

Availability of certain tax information of publicly traded corporations

(a)

In general

Section 6103 of the Internal Revenue Code of 1986 is amended by redesignating subsection (q) as subsection (r) and by inserting after subsection (p) the following new subsection: (q)

Public disclosure of certain corporate tax information

(1)

In general

Each specified corporation shall, on the date that it files its return of tax imposed by chapter 1 for each taxable year, electronically file the information described in paragraph (2) for such year. Not later than 30 days after receiving such information, the Secretary shall make it electronically available to the public as a single document and as part of a searchable database as provided in paragraph (3). (2)

Information

The information described in this paragraph with respect to a corporation for a taxable year are the following items: (A)Net corporate income tax as shown on the return for such year. (B)Amount shown as Federal income tax expense on its annual statement (if any) filed with the Securities and Exchange Commission. (C)Taxable income as shown on such return. (D)Adjusted book income. (E)The portion of the total difference between taxable income and adjusted book income which is attributable to each of the following: (i)Transactions disclosable under section 6011. (ii)Depreciation differences. (iii)Stock options. (iv)Income from entities consolidated for book income purposes but not for Federal income tax purposes. (v)Income from pension funds or tax-exempt bonds. (vi)Other items, pursuant to regulations prescribed by the Secretary. (F)An explanation of the differences between taxable income and adjusted book income that are attributable to one or more of the following: (i)Transactions referred to in subparagraph (E)(i). (ii)Other items specified in regulations referred to in subparagraph (E)(vi). (iii)Any additional information that the Secretary determines would be useful in enforcing this title, including any information which is an indicia of abusive tax avoidance schemes. (3)

Access

The Secretary shall make the information described in paragraph (2) accessible electronically by a search which uses the following items: (A)Name of the corporation. (B)Headquarters location by postal zip code. (C)Each category of such information. (D)Taxable year or other time period to which such information relates. (E)The CUSIP identification number under which the corporation files reports with the Securities and Exchange Commission. (4)

Specified corporation

For purposes of this subsection, the term specified corporation means— (A)any corporation issuing any class of securities required to be registered under section 12 of the Securities Exchange Act of 1934, and (B)any other domestic corporation which is a member of an affiliated group (as defined in section 1504) which includes a corporation described in subparagraph (A).In the case of a corporation which is a member of an affiliated group filing a consolidated return, the term specified corporation means such group and not each member thereof. (5)

Other definitions

For purposes of this subsection— (A)

Net corporate income tax

The term net corporate income tax means the sum of regular tax liability (as defined by section 26(b)) and the tax imposed by section 55, reduced by the credits allowable under part IV of subchapter A of chapter 1. (B)

Adjusted book income

The term adjusted book income means book income reported to the Securities and Exchange Commission (or to shareholders) without reduction for preferred stock dividends, Federal income taxes, and income, war profits, or excess profits taxes imposed by any foreign country or possession of the United States.. (b)

Effective date

The amendment made by subsection (a) shall apply to taxable years ending after the date of the enactment of this Act.

3.

Study of tax shelter activity

(a)

Study

The Secretary of the Treasury (or the Secretary’s delegate) shall, in coordination with the Joint Committee on Taxation, Committee on Finance of the Senate, and the Committee on Ways and Means of the House of Representatives, conduct a study of recent known corporate tax shelter activity, including information gained from the tax shelter amnesty announced in Internal Revenue Service Announcement 2002–02 and from the study of Enron tax returns by the Committee on Finance of the Senate. (b)

Report

Not later than 1 year after the date of the enactment of this Act, the report of such study shall be submitted to the Committee on Finance of the Senate and the Committee on Ways and Means of the House of Representatives. Such report shall include recommendations (if any) for— (1)requiring additional information on the reconciliation of book/tax accounting and publicly disclosing that additional information under section 6103(q) of the Internal Revenue Code of 1986, and (2)publicly disclosing additional information from the corporate income tax return.Such report also shall include a description of the actions that such Secretary has taken toward implementing any such recommendations.