Offshore Deferred Compensation Reform Act of 2007

Offshore Deferred Compensation Reform Act of 2007 - Amends the Internal Revenue Code to require the inclusion in gross income for income tax purposes of employee compensation deferred under a nonqualified deferred compensation plan of a nonqualified foreign corporation when there is no substantial risk of forfeiture of the rights to such compensation. Defines "nonqualified foreign corporation" as any foreign corporation unless substantially all of its income is: (1) effectively connected with a trade or business in the United States; or (2) subject to an income tax imposed by a foreign country that has a comprehensive tax treaty with the United States.

[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3923 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 3923

To amend the Internal Revenue Code of 1986 to provide for the treatment 
         of certain foreign nonqualified deferred compensation.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            October 22, 2007

 Mr. Emanuel (for himself, Mr. Blumenauer, and Mr. Doggett) 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 provide for the treatment 
         of certain foreign nonqualified deferred compensation.

    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 ``Offshore Deferred Compensation 
Reform Act of 2007''.

SEC. 2. SPECIAL RULE FOR CERTAIN FOREIGN NONQUALIFIED DEFERRED 
              COMPENSATION.

    (a) In General.--Subpart B of part II of subchapter E of chapter 1 
of the Internal Revenue Code of 1986 (relating to taxable year for 
which items of gross income included) is amended by inserting after 
section 457 the following new section:

``SEC. 457A. CERTAIN FOREIGN NONQUALIFIED DEFERRED COMPENSATION.

    ``(a) In General.--Any compensation which is deferred under a 
nonqualified deferred compensation plan (within the meaning of section 
409A(d)) of a nonqualified foreign corporation is includible in gross 
income for purposes of this chapter when there is no substantial risk 
of forfeiture of the rights to such amount.
    ``(b) Nonqualified Foreign Corporation.--For purposes of this 
section, the term `nonqualified foreign corporation' means any foreign 
corporation unless substantially all of the income of such 
corporation--
            ``(1) is effectively connected with the conduct of a trade 
        or business in the United States, or
            ``(2) is subject to an income tax imposed by a foreign 
        country, but only if--
                    ``(A)(i) such corporation is eligible for benefits 
                of a comprehensive income tax treaty which such country 
                has with the United States which the Secretary 
                determines is satisfactory for purposes of this section 
                and which includes an exchange of information program, 
                or
                    ``(ii) the Secretary determines that such income 
                tax is a comprehensive income tax satisfactory for 
                purposes of this section, and
                    ``(B) a deduction is allowed for compensation 
                described in subsection (a) under rules substantially 
                similar to the rules of this title.
    ``(c) Application of Certain Rules.--Rules similar to the rules of 
paragraphs (4), (5), and (6) of section 409A(d) shall apply for 
purposes of this section.
    ``(d) Regulations.--The Secretary shall prescribe such regulations 
as may be necessary or appropriate to carry out the purposes of this 
section, including regulations disregarding a substantial risk of 
forfeiture in cases where necessary to carry out the purposes of this 
section.''.
    (b) Clerical Amendment.--The table of sections of subpart B of part 
II of subchapter E of chapter 1 of such Code is amended by inserting 
after the item relating to section 457 the following new item:

``Sec. 457A. Certain foreign nonqualified deferred compensation.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to amounts deferred in taxable years beginning after 
        December 31, 2007.
            (2) Earnings.--The amendments made by this section shall 
        apply to earnings on deferred compensation only to the extent 
        that such amendments apply to such compensation.
                                 <all>