S 3659 ISCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for the disclosure of schedule M-3 to the Securities and Exchange Commission, to provide for the public disclosure of certain information on such schedule, to provide penalties for failure to file such schedule or inaccurately reporting information on such schedule, and for other purposes.CommentsClose CommentsPermalink

October 1 (legislative day, September 17), 2008CommentsClose CommentsPermalink

Mr. SCHUMER introduced the following bill; which was read twice and referred to the Committee on FinanceCommentsClose CommentsPermalink

To amend the Internal Revenue Code of 1986 to provide for the disclosure of schedule M-3 to the Securities and Exchange Commission, to provide for the public disclosure of certain information on such schedule, to provide penalties for failure to file such schedule or inaccurately reporting information on such schedule, and for other purposes.CommentsClose CommentsPermalink

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,CommentsClose CommentsPermalink

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Corporate Transparency Act of 2007’.CommentsClose CommentsPermalink

SEC. 2. DISCLOSURE OF BOOK-TAX DIFFERENCES TO SECURITIES AND EXCHANGE COMMISSION.

(a) Disclosure for Enforcement Purposes-CommentsClose CommentsPermalink





(1) IN GENERAL- Subsection (l) of section 6103 of the Internal Revenue Code of 1986 (relating to disclosure of returns and return information for purposes other than tax administration) is amended by adding at the end the following new paragraph:CommentsClose CommentsPermalink





‘(21) DISCLOSURE OF RETURN INFORMATION TO SECURITIES AND EXCHANGE COMMISSION-CommentsClose CommentsPermalink





‘(A) IN GENERAL- The Secretary shall, upon written request from the Commissioner of the Securities and Exchange Commission, disclose to officers and employees of the Securities and Exchange Commission return information of specified public entities relating to the reconciliation of financial income statements reported to the Securities and Exchange Commission (or to shareholders) with income tax returns.CommentsClose CommentsPermalink





‘(B) RESTRICTION ON USE OF DISCLOSED INFORMATION- Any officers and employees of the Securities and Exchange Commission receiving return information under subparagraph (A) shall use such information only--CommentsClose CommentsPermalink





‘(i) for the purposes of, and to the extent necessary in, civil enforcement and administration of the securities laws (as defined in section 3 of the Securities and Exchange Act of 1934), andCommentsClose CommentsPermalink





‘(ii) for purposes of conducting the study required under section 5(a) of the Corporate Transparency Act of 2007.CommentsClose CommentsPermalink





‘(C) SPECIFIED PUBLIC ENTITY- For purposes of this paragraph, the term ‘specified public entity’ means any entity--CommentsClose CommentsPermalink





‘(i) issuing any class of securities required to be registered under section 12 of the Securities and Exchange Act of 1934, andCommentsClose CommentsPermalink





‘(ii) which is required by the Secretary to file schedule M-3.CommentsClose CommentsPermalink





In the case of an entity which is a member of an affiliated group filing a consolidated return, the term ‘specified public entity’ means such group and not each member thereof.’.CommentsClose CommentsPermalink





(2) PROCEDURES AND RECORD KEEPING RELATED TO DISCLOSURE- Subsection (p)(4) of section 6103 of the Internal Revenue Code of 1986 is amended--CommentsClose CommentsPermalink





(A) by striking ‘(14), or (17)’ in the matter before subparagraph (A) and inserting ‘(14), (17), or (21)’, andCommentsClose CommentsPermalink





(B) by striking ‘(15), or (17)’ in subparagraph (F)(ii) and inserting ‘(15), (17), or (21)’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this section shall apply to requests made after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 3. PUBLIC DISCLOSURE OF CERTAIN CORPORATE BOOK-TAX DIFFERENCES.

(a) In General- Subchapter B of chapter 61 of the Internal Revenue Code of 1986 is amended by inserting after section 6104 the following new section:CommentsClose CommentsPermalink

‘SEC. 6104A. PUBLIC DISCLOSURE OF CERTAIN CORPORATE BOOK-TAX DIFFERENCES.

‘(a) In General- The Secretary shall make publicly available, on the Internet and at the offices of the Internal Revenue Service, the information described in subsection (b) with respect to each specified entity for each taxable year ending after the date of the enactment of this section.CommentsClose CommentsPermalink





‘(b) Information- The information described in this subsection with respect to a specified entity are the following items:CommentsClose CommentsPermalink





‘(1) The name and address of the specified entity.CommentsClose CommentsPermalink





‘(2) The CUSIP identification number under which the entity files reports with the Securities and Exchange Commission, if any.CommentsClose CommentsPermalink





‘(3) The following information relating to the worldwide consolidated income statement of the specified entity for the period ending with or within the taxable year:CommentsClose CommentsPermalink





‘(A) The total net income (or loss) shown on such income statement.CommentsClose CommentsPermalink





‘(B) The total net income (or loss) of foreign entities included on such income statement but not included on the consolidated tax return of the specified entity for the taxable year.CommentsClose CommentsPermalink





‘(C) The total of adjustments (other than the item described in subparagraph (B)) reflecting the difference between the income (or loss) shown on such income statement and the item described in subparagraph (D).CommentsClose CommentsPermalink





‘(D) The total income (or loss) of all entities included on both such income statement and the consolidated tax return of the specified entity for the taxable year.CommentsClose CommentsPermalink





‘(4) The total net income (or loss) shown on the consolidated income tax return of the specified entity for the taxable year.CommentsClose CommentsPermalink





‘(5) The total temporary differences between the items described in paragraphs (3)(D) and (4).CommentsClose CommentsPermalink





‘(6) The total permanent differences between the items described in paragraphs (3)(D) and (4).CommentsClose CommentsPermalink





‘(c) Specified Entity- For purposes of this subsection, the term ‘specified entity’ means any entity which is required by the Secretary to file schedule M-3. In the case of an entity which is a member of an affiliated group filing a consolidated return, the term ‘specified entity’ means such group and not each member thereof.’.CommentsClose CommentsPermalink





(b) Clerical Amendment- The table of sections for subchapter B of chapter 61 of such Code is amended by inserting after the item relating to section 6104 the following new item:CommentsClose CommentsPermalink





‘Sec. 6104A. Public disclosure of certain corporate book-tax differences.’.CommentsClose CommentsPermalink





(c) Effective Date- The amendment made by this section shall apply to taxable years ending after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 4. PENALTY FOR FAILURE TO FILE AND FILING INACCURATE INFORMATION RELATING TO CERTAIN CORPORATE BOOK-TAX DIFFERENCES.

(a) Failure To File- Section 6652 of the Internal Revenue Code of 1986 is amended by redesignating subsection (m) as subsection (n) and by inserting after subsection (l) the following new subsection:CommentsClose CommentsPermalink





‘(m) Failure To File Information Relating to Certain Corporate Book-Tax Differences-CommentsClose CommentsPermalink





‘(1) IN GENERAL- In the case of--CommentsClose CommentsPermalink





‘(A) any failure by a specified entity to file any statement required by the Secretary relating to the reconciliation of financial statements with income tax returns, orCommentsClose CommentsPermalink





‘(B) any failure by a specified entity--CommentsClose CommentsPermalink





‘(i) to include any of the information required to be shown on such a statement, orCommentsClose CommentsPermalink





‘(ii) to include materially accurate information on such a statement,CommentsClose CommentsPermalink





there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the specified entity an amount equal to the amount determined under paragraph (2) for each such failure.CommentsClose CommentsPermalink





‘(2) AMOUNT-CommentsClose CommentsPermalink





‘(A) CORPORATIONS- In the case of a corporation, the amount determined under this paragraph is--CommentsClose CommentsPermalink





‘(i) $10,000 in the case of such a specified entity with total assets at the end of the taxable year of not more than $50,000,000,CommentsClose CommentsPermalink





‘(ii) $25,000 in the case of such a specified entity with total assets at the end of the taxable year of more than $50,000,000 but not more than $250,000,000,CommentsClose CommentsPermalink





‘(iii) $50,000 in the case of such a specified entity with total assets at the end of the taxable year of more than $250,000,000 but not more than $1,000,000,000, andCommentsClose CommentsPermalink





‘(iv) $100,000 in the case of such a specified entity with total assets at the end of the taxable year of more than $1,000,000,000.CommentsClose CommentsPermalink





‘(B) OTHER ENTITIES- In the case of a specified entity other than a corporation, the amount determined under this paragraph is--CommentsClose CommentsPermalink





‘(i) $5,000 in the case of such a specified entity with gross receipts for the taxable year of not more than $10,000,000,CommentsClose CommentsPermalink





‘(ii) $10,000 in the case of such a specified entity with gross receipts for the taxable year of more than $10,000,000 but not more than $50,000,000,CommentsClose CommentsPermalink





‘(iii) $25,000 in the case of such a specified entity with gross receipts for the taxable year of more than $50,000,000 but not more than $250,000,000,CommentsClose CommentsPermalink





‘(iv) $50,000 in the case of such a specified entity with gross receipts for the taxable year of more than $250,000,000 but not more than $1,000,000,000, andCommentsClose CommentsPermalink





‘(v) $100,000 in the case of such a specified entity with gross receipts for the taxable year of more than $1,000,000,000.CommentsClose CommentsPermalink





‘(3) SPECIFIED ENTITY- For purposes of this subsection, the term ‘specified entity’ has the meaning given such term under section 6104A.’.CommentsClose CommentsPermalink





(b) Effective Date- The amendments made by this sections shall apply to returns and statements filed after the date of the enactment of this Act.CommentsClose CommentsPermalink

SEC. 5. STUDY ON BOOK-TAX DISCLOSURES.

(a) In General-CommentsClose CommentsPermalink





(1) STUDY- The Secretary of the Treasury, in consultation with the Commissioner of the Securities and Exchange Commission and the Joint Committee on Taxation, shall conduct a study on the reconciliation of differences between the financial income statements of specified entities with income tax returns.CommentsClose CommentsPermalink





(2) MATTERS INCLUDED IN STUDY- The study conducted under subsection (a) shall address--CommentsClose CommentsPermalink





(A) the need for additional reporting of book-tax difference to--CommentsClose CommentsPermalink





(i) the Internal Revenue Service, andCommentsClose CommentsPermalink





(ii) the Securities and Exchange Commission, andCommentsClose CommentsPermalink





(B) the benefits and risks of publicly disclosing such differences.CommentsClose CommentsPermalink





(b) Report- Not later than 18 months after the date of the enactment of this Act, the Secretary of the Treasury shall submit to Congress a report on the matters studied under subsection (a) together with any recommendations.CommentsClose CommentsPermalink





(c) Specified Entity- For purposes of this section, the term ‘specified entity’ has the meaning given such term under section 6104A of the Internal Revenue Code of 1986.CommentsClose CommentsPermalink