26 U.S.C. § 896 : US Code - Section 896: Adjustment of tax on nationals, residents, and corporations of certain foreign countries

Search 26 U.S.C. § 896 : US Code - Section 896: Adjustment of tax on nationals, residents, and corporations of certain foreign countries

(a) Imposition of more burdensome taxes by foreign country
Whenever the President finds that -
(1) under the laws of any foreign country, considering the tax
system of such foreign country, citizens of the United States not
residents of such foreign country or domestic corporations are
being subjected to more burdensome taxes, on any item of income
received by such citizens or corporations from sources within
such foreign country, than taxes imposed by the provisions of
this subtitle on similar income derived from sources within the
United States by residents or corporations of such foreign
country,
(2) such foreign country, when requested by the United States
to do so, has not acted to revise or reduce such taxes so that
they are no more burdensome than taxes imposed by the provisions
of this subtitle on similar income derived from sources within
the United States by residents or corporations of such foreign
country, and
(3) it is in the public interest to apply pre-1967 tax
provisions in accordance with the provisions of this subsection
to residents or corporations of such foreign country,
the President shall proclaim that the tax on such similar income
derived from sources within the United States by residents or
corporations of such foreign country shall, for taxable years
beginning after such proclamation, be determined under this
subtitle without regard to amendments made to this subchapter and
chapter 3 on or after the date of enactment of this section.
(b) Imposition of discriminatory taxes by foreign country
Whenever the President finds that -
(1) under the laws of any foreign country, citizens of the
United States or domestic corporations (or any class of such
citizens or corporations) are, with respect to any item of
income, being subjected to a higher effective rate of tax than
are nationals, residents, or corporations of such foreign country
(or a similar class of such nationals, residents, or
corporations) under similar circumstances;
(2) such foreign country, when requested by the United States
to do so, has not acted to eliminate such higher effective rate
of tax; and
(3) it is in the public interest to adjust, in accordance with
the provisions of this subsection, the effective rate of tax
imposed by this subtitle on similar income of nationals,
residents, or corporations of such foreign country (or such
similar class of such nationals, residents, or corporations),
the President shall proclaim that the tax on similar income of
nationals, residents, or corporations of such foreign country (or
such similar class of such nationals, residents, or corporations)
shall, for taxable years beginning after such proclamation, be
adjusted so as to cause the effective rate of tax imposed by this
subtitle on such similar income to be substantially equal to the
effective rate of tax imposed by such foreign country on such item
of income of citizens of the United States or domestic corporations
(or such class of citizens or corporations). In implementing a
proclamation made under this subsection, the effective rate of tax
imposed by this subtitle on an item of income may be adjusted by
the disallowance, in whole or in part, of any deduction, credit, or
exemption which would otherwise be allowed with respect to that
item of income or by increasing the rate of tax otherwise
applicable to that item of income.
(c) Alleviation of more burdensome or discriminatory taxes
Whenever the President finds that -
(1) the laws of any foreign country with respect to which the
President has made a proclamation under subsection (a) have been
modified so that citizens of the United States not residents of
such foreign country or domestic corporations are no longer
subject to more burdensome taxes on the item of income derived by
such citizens or corporations from sources within such foreign
country, or
(2) the laws of any foreign country with respect to which the
President has made a proclamation under subsection (b) have been
modified so that citizens of the United States or domestic
corporations (or any class of such citizens or corporations) are
no longer subject to a higher effective rate of tax on the item
of income,
he shall proclaim that the tax imposed by this subtitle on the
similar income of nationals, residents, or corporations of such
foreign country shall, for any taxable year beginning after such
proclamation, be determined under this subtitle without regard to
such subsection.
(d) Notification of Congress required
No proclamation shall be issued by the President pursuant to this
section unless, at least 30 days prior to such proclamation, he has
notified the Senate and the House of Representatives of his
intention to issue such proclamation.
(e) Implementation by regulations
The Secretary shall prescribe such regulations as he deems
necessary or appropriate to implement this section.