[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6614 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6614

To amend the Internal Revenue Code of 1986 to repeal the limitation on 
  the amount of foreign earned income excludible from gross income by 
citizens or residents of the United States living abroad, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 24, 2008

   Mr. Garrett of New Jersey (for himself, Mr. Price of Georgia, Mr. 
Sullivan, Mrs. Blackburn, Mr. King of Iowa, Mr. Gingrey, Mr. Issa, Ms. 
  Fallin, Mr. Campbell of California, Mr. Kline of Minnesota, and Mr. 
Westmoreland) 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 repeal the limitation on 
  the amount of foreign earned income excludible from gross income by 
citizens or residents of the United States living abroad, and for other 
                               purposes.

    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 ``American Tax Fairness Act of 2008''.

SEC. 2. REPEAL OF LIMITATION ON THE EXCLUSION OF FOREIGN EARNED INCOME 
              BY CITIZENS AND RESIDENTS OF THE UNITED STATES LIVING 
              ABROAD.

    (a) In General.--Subsection (a) of section 911 of the Internal 
Revenue Code of 1986 is amended to read as follows:
    ``(a) Exclusion From Gross Income.--At the election of a qualified 
individual, there shall be excluded from the gross income of such 
individual, and exempt from tax under this subtitle, for any taxable 
year the foreign earned income of such individual.''.
    (b) Conforming Amendments.--
            (1) Subsection (b) of section 911 of such Code is amended 
        to read as follows:
    ``(b) Foreign Earned Income.--For purposes of this section--
            ``(1) In general.--The term `foreign earned income' with 
        respect to any individual means the amount received by such 
        individual from sources within a foreign country or countries 
        which constitute earned income attributable to services 
        performed by such individual during the period described in 
        subparagraph (A) or (B) of subsection (c)(1), whichever is 
        applicable.
            ``(2) Certain amounts not included in foreign earned 
        income.--The foreign earned income for an individual shall not 
        include amounts--
                    ``(A) received as a pension or annuity,
                    ``(B) paid by the United States or an agency 
                thereof to an employee of the United States or an 
                agency thereof,
                    ``(C) included in gross income by reason of section 
                402(b) (relating to taxability of beneficiary of 
                nonexempt trust) or section 403(c) (relating to 
                taxability of beneficiary under a nonqualified 
                annuity), or
                    ``(D) received after the close of the taxable year 
                following the taxable year in which the services to 
                which the amounts are attributable are performed.''.
            (2) Section 911 of such Code is amended by striking 
        subsection (c) and redesignating subsections (d) through (g) as 
        subsections (c) through (f), respectively.
            (3) Subsection (c) of section 911 of such Code (as 
        redesignated under paragraph (2)) is amended--
                    (A) by striking ``, and in applying subsections 
                (b)(2)(A), (c)(1)(B)(ii), and (c)(2)(A)(ii) with 
                respect to such individual, only the days within such 
                period shall be taken into account'' in the flush 
                language at the end of paragraph (4),
                    (B) by striking paragraph (7), and
                    (C) by redesignating paragraphs (8) and (9) as 
                paragraphs (7) and (8), respectively.
            (4) Subparagraph (A) of section 911(c)(7) (as redesignated 
        under paragraphs (2) and (3)) is amended by striking clause 
        (ii) and inserting ``and'' at the end of clause (i).
            (5) Subsection (e) of section 911 of such Code (as 
        redesignated under paragraph (2)) is amended by striking 
        ``subsection (d)(6)'' in the flush language at the end and 
        inserting ``subsection (c)(6)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 3. TREASURY REPORT ON TAXATION OF FOREIGN INCOME.

    Not later than 1 year after the date of the enactment of this Act, 
the Secretary of the Treasury shall submit to the Congress a report on 
the United States taxation of foreign income, including--
            (1) a detailed description of the United States taxation of 
        the foreign income (including earned income, dividends, capital 
        gains, and interest) of United States persons and of foreign 
        persons,
            (2) the recommendations of the Secretary regarding whether 
        and how such taxation could be restructured and whether any 
        particular forms of such taxation should be terminated, and
            (3) the recommendations of the Secretary on creative, 
        market-oriented methods to encourage increased repatriation of 
        income invested outside the United States (including any 
        extension of the temporary dividends received deduction under 
        section 965 of the Internal Revenue Code of 1986).
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