Page 155 - Tax Reform

PUBLIC LAW 115–97—DEC. 22, 2017 131 STAT. 2205

‘‘(B) DEFERRED NET TAX LIABILITY.—For purposes of
this paragraph, the term ‘deferred net tax liability’ means,
with respect to any taxable year, the amount of net tax
liability payment of which has been deferred under para-
graph (1) and which has not been assessed on a return
of tax for any prior taxable year.
‘‘(C) FAILURE TO REPORT.—In the case of any failure
to report any amount required to be reported under
subparagraph (A) with respect to any taxable year before
the due date for the return of tax for such taxable year,
there shall be assessed on such return as an addition
to tax 5 percent of such amount.
‘‘(8) ELECTION.—Any election under paragraph (1)—
‘‘(A) shall be made by the shareholder of the S corpora-
tion not later than the due date for such shareholder’s
return of tax for the taxable year which includes the close
of the taxable year of such S corporation in which the
amount described in subsection (a) is taken into account,
and
‘‘(B) shall be made in such manner as the Secretary
shall provide.
‘‘(j) REPORTING BY S CORPORATION.—Each S corporation which
is a United States shareholder of a specified foreign corporation
shall report in its return of tax under section 6037(a) the amount
includible in its gross income for such taxable year by reason
of this section and the amount of the deduction allowable by sub-
section (c). Any copy provided to a shareholder under section 6037(b)
shall include a statement of such shareholder’s pro rata share
of such amounts.
‘‘(k) EXTENSION OF LIMITATION ON ASSESSMENT.—Notwith-
standing section 6501, the limitation on the time period for the
assessment of the net tax liability under this section (as defined
in subsection (h)(6)) shall not expire before the date that is 6
years after the return for the taxable year described in such sub-
section was filed.
‘‘(l) RECAPTURE FOR EXPATRIATED ENTITIES.—
‘‘(1) IN GENERAL.—If a deduction is allowed under sub-
section (c) to a United States shareholder and such shareholder
first becomes an expatriated entity at any time during the
10-year period beginning on the date of the enactment of the
Tax Cuts and Jobs Act (with respect to a surrogate foreign
corporation which first becomes a surrogate foreign corporation
during such period), then—
‘‘(A) the tax imposed by this chapter shall be increased
for the first taxable year in which such taxpayer becomes
an expatriated entity by an amount equal to 35 percent
of the amount of the deduction allowed under subsection
(c), and
‘‘(B) no credits shall be allowed against the increase
in tax under subparagraph (A).
‘‘(2) EXPATRIATED ENTITY.—For purposes of this subsection,
the term ‘expatriated entity’ has the same meaning given such
term under section 7874(a)(2), except that such term shall
not include an entity if the surrogate foreign corporation with
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respect to the entity is treated as a domestic corporation under
section 7874(b).