1. Short title
This Act may be cited as the “Stop Outsourcing and Create American Jobs Act of 2013”.
Stop Outsourcing and Create American Jobs Act of 2013
A BILL
To amend the Internal Revenue Code of 1986 to provide for the identification of corporate tax haven countries and increased penalties for tax evasion practices in haven countries that ship United States jobs overseas, and for other purposes.
2. Identifying corporate tax haven countries and increasing penalties for tax evasion practices in haven countries that ship United States jobs overseas
Not later than one year after the date of the enactment of this Act, the Secretary of the Treasury shall develop and publish a list of countries the Secretary determines to be corporate tax haven countries. In developing such list, the Secretary may consider the following criteria:
Tax rate in the country.
Lack of effective exchange of information between governments.
Lack of transparency in financial services sector.
Lack of requirements of substantial economic activity.
Incentives which may encourage a United States corporation to invest abroad rather than domestically.
Other factors deemed relevant by the Secretary.
3. Increase in penalties for corporate tax evasion practices concerning returns, documents, and activities relating to tax haven countries
Accuracy-Related penalty on underpayments— Section 6662 of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(k) Increase in penalty in case of tax haven countries
“(1) In general—In the case of any portion of an underpayment by a corporation for a taxable year which involves an undisclosed foreign financial asset located in a tax haven country at any time during such taxable year, subsection (a) shall be applied with respect to such portion by substituting “60 percent” for “20 percent”.
“(2) Tax haven country—For purposes of this subsection, the term tax haven country means a country on the list published under section 2(a) of the Stop Outsourcing and Create American Jobs Act of 2013.”
Understatements with respect to reportable transactions— Section 6662A of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(f) Increase in penalty in case of tax haven countries—In the case of any portion of a reportable transaction understatement by a corporation for a taxable year which involves a transaction that originates, terminates, or otherwise occurs in a tax haven country (as defined in section 6662(k)(2)), subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”.”
Fraud penalty— Section 6663 of the Internal Revenue Code of 1986 is amended by adding at the end the following:
“(d) Increase in penalty in case of tax haven countries—In the case of any fraud by a corporation involving an activity occurring in a tax haven country (as defined in section 6662(k)(2)), subsection (a) shall be applied by substituting “100 percent” for “75 percent”.”
Erroneous claim for credit or refund— Section 6676 of the Internal Revenue Code of 1986 is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:
“(d) Increase in penalty in case of tax haven countries—In the case of claim or credit by a corporation for any excessive amount due for credits or refunds involving funds held or invested in a tax haven country (as defined in section 6662(k)(2)), subsection (a) shall be applied by substituting “40 percent” for “20 percent”.”
Willful attempt To evade or defeat tax— Section 7201 of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: “In the case of an attempt by a corporation which involves a tax haven country (as defined in section 6662(k)(2)), the preceding sentence shall be applied by substituting “$1,000,000” for “$500,000”.”.
Fraud and false statements— Section 7206 of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: “In the case of an offense by a corporation described in the preceding sentence which involves a tax haven country (as defined in section 6662(k)(2)), the preceding sentence shall be applied by substituting “$1,000,000” for “$500,000”.”.
Fraudulent returns, statements, or other documents— Section 7207 of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: “In the case of an offense by a corporation described in either of the two preceding sentences which involves a tax haven country (as defined in section 6662(k)(2)), the appropriate sentence shall be applied by substituting “$150,000” for “$50,000”.”.
Effective date—
The amendments made by subsections (a) and (b) shall apply to underpayments attributable to transactions entered into after the date on which the list developed under section 2 is first published.
The amendment made by subsection (c) shall apply to returns the due date for which (determined without regard to extensions) is after the date on which the list developed under section 2 is first published.
The amendment made by subsection (d) shall apply to refunds and credits attributable to transactions entered into after the date on which the list developed under section 2 is first published.
The amendment made by subsections (e), (f), and (g) shall apply to offenses committed after the date on which the list developed under section 2 is first published.
4. Preferences in Government contracts
Preference— A Federal department or agency may give a preference in the award of a contract for the procurement of goods or services in a fiscal year to any potential contractor that has not engaged in outsourcing during the fiscal year preceding the fiscal year in which the contract is awarded.
Requirement To request outsourcing information from potential contractors—
In general— In any solicitation for offers for a contract issued by a Federal department or agency in a fiscal year, the department or agency shall request each offeror for the contract to provide information regarding whether the offeror engaged in outsourcing during the fiscal year preceding the fiscal year in which the contract is to be awarded.
Penalty and debarment— Any offeror found to be in violation of paragraph (1), including making a false statement regarding the offeror’s engagement in outsourcing—
shall, notwithstanding section 1001 of title 18, United States Code, be liable to the United States for a civil penalty in an amount not more than the value of the contract the offeror is seeking; and
shall be debarred, by the head of the department or agency soliciting the offer, from contracting with the Federal Government for a period of two years starting on the date on which the offeror is found to be in violation of paragraph (1).
Effective date— This subsection shall apply to solicitations for contracts issued on and after the date occurring one year after the date of the enactment of this Act.
Outsourcing defined— In this section, the term outsourcing means the laying off of a United States worker from a job, and the hiring or contracting for the same job to be performed in a foreign country.
5. Deficit reduction
Amounts which the Secretary of the Treasury estimates are received in the Treasury by reason of this Act are hereby set aside for the reduction of the public debt.