26 U.S.C. § 999 : US Code - Section 999: Reports by taxpayers; determinations

Search 26 U.S.C. § 999 : US Code - Section 999: Reports by taxpayers; determinations

(a) International boycott reports by taxpayers
(1) Report required
If any person, or a member of a controlled group (within the
meaning of section 993(a)(3)) which includes that person, has
operations in, or related to -
(A) a country (or with the government, a company, or a
national of a country) which is on the list maintained by the
Secretary under paragraph (3), or
(B) any other country (or with the government, a company, or
a national of that country) in which such person or such member
had operations during the taxable year if such person (or, if
such person is a foreign corporation, any United States
shareholder of that corporation) knows or has reason to know
that participation in or co-operation with an international
boycott is required as a condition of doing business within
such country or with such government, company, or national,
that person or shareholder (within the meaning of section 951(b))
shall report such operations to the Secretary at such time and in
such manner as the Secretary prescribes, except that in the case
of a foreign corporation such report shall be required only of a
United States shareholder (within the meaning of such section) of
such corporation.
(2) Participation and cooperation; request therefor
A taxpayer shall report whether he, a foreign corporation of
which he is a United States shareholder, or any member of a
controlled group which includes the taxpayer or such foreign
corporation has participated in or cooperated with an
international boycott at any time during the taxable year, or has
been requested to participate in or cooperate with such a
boycott, and, if so, the nature of any operation in connection
with which there was participation in or cooperation with such
boycott (or there was a request to participate or cooperate).
(3) List to be maintained
The Secretary shall maintain and publish not less frequently
than quarterly a current list of countries which require or may
require participation in or cooperation with an international
boycott (within the meaning of subsection (b)(3)).
(b) Participation in or cooperation with an international boycott
(1) General rule
If the person or a member of a controlled group (within the
meaning of section 993(a)(3)) which includes the person
participates in or cooperates with an international boycott in
the taxable year, all operations of the taxpayer or such group in
that country and in any other country which requires
participation in or cooperation with the boycott as a condition
of doing business within that country, or with the government, a
company, or a national of that country, shall be treated as
operations in connection with which such participation or
cooperation occurred, except to the extent that the person can
clearly demonstrate that a particular operation is a clearly
separate and identifiable operation in connection with which
there was no participation in or cooperation with an
international boycott.
(2) Special rule
(A) Nonboycott operations
A clearly separate and identifiable operation of a person, or
of a member of the controlled group (within the meaning of
section 993(a)(3)) which includes that person, in or related to
any country within the group of countries referred to in
paragraph (1) shall not be treated as an operation in or
related to a group of countries associated in carrying out an
international boycott if the person can clearly demonstrate
that he, or that such member, did not participate in or
cooperate with the international boycott in connection with
that operation.
(B) Separate and identifiable operations
A taxpayer may show that different operations within the same
country, or operations in different countries, are clearly
separate and identifiable operations.
(3) Definition of boycott participation and cooperation
For purposes of this section, a person participates in or
cooperates with an international boycott if he agrees -
(A) as a condition of doing business directly or indirectly
within a country or with the government, a company, or a
national of a country -
(i) to refrain from doing business with or in a country
which is the object of the boycott or with the government,
companies, or nationals of that country;
(ii) to refrain from doing business with any United States
person engaged in trade in a country which is the object of
the boycott or with the government, companies, or nationals
of that country;
(iii) to refrain from doing business with any company whose
ownership or management is made up, all or in part, of
individuals of a particular nationality, race, or religion,
or to remove (or refrain from selecting) corporate directors
who are individuals of a particular nationality, race, or
religion; or
(iv) to refrain from employing individuals of a particular
nationality, race, or religion; or
(B) as a condition of the sale of a product to the
government, a company, or a national of a country, to refrain
from shipping or insuring that product on a carrier owned,
leased, or operated by a person who does not participate in or
cooperate with an international boycott (within the meaning of
subparagraph (A)).
(4) Compliance with certain laws
This section shall not apply to any agreement by a person (or
such member) -
(A) to meet requirements imposed by a foreign country with
respect to an international boycott if United States law or
regulations, or an Executive Order, sanctions participation in,
or cooperation with, that international boycott,
(B) to comply with a prohibition on the importation of goods
produced in whole or in part in any country which is the object
of an international boycott, or
(C) to comply with a prohibition imposed by a country on the
exportation of products obtained in such country to any country
which is the object of an international boycott.
(c) International boycott factor
(1) International boycott factor
For purposes of sections 908(a), 952(a)(3), and
995(b)(1)(F)(ii), the international boycott factor is a fraction,
determined under regulations prescribed by the Secretary, the
numerator of which reflects the world-wide operations of a person
(or, in the case of a controlled group (within the meaning of
section 993(a)(3)) which includes that person, of the group)
which are operations in or related to a group of countries
associated in carrying out an international boycott in or with
which that person or a member of that controlled group has
participated or cooperated in the taxable year, and the
denominator of which reflects the world-wide operations of that
person or group.
(2) Specifically attributable taxes and income
If the taxpayer clearly demonstrates that the foreign taxes
paid and income earned for the taxable year are attributable to
specific operations, then, in lieu of applying the international
boycott factor for such taxable year, the amount of the credit
disallowed under section 908(a), the addition to subpart F income
under section 952(a)(3), and the amount of deemed distribution
under section 995(b)(1)(F)(ii) for the taxable year, if any,
shall be the amount specifically attributable to the operations
in which there was participation in or cooperation with an
international boycott under section 999(b)(1).
(3) World-wide operations
For purposes of this subsection, the term "world-wide
operations" means operations in or related to countries other
than the United States.
(d) Determination with respect to particular operations
Upon a request made by the taxpayer, the Secretary shall issue a
determination with respect to whether a particular operation of a
person, or of a member of a controlled group which includes that
person, constitutes participation in or cooperation with an
international boycott. The Secretary may issue such a determination
in advance of such operation in cases which are of such a nature
that an advance determination is possible and appropriate under the
circumstances. If the request is made before the operation is
commenced, or before the end of a taxable year in which the
operation is carried out, the Secretary may decline to issue such a
determination before close of the taxable year.
(e) Participation or cooperation by related persons
If a person controls (within the meaning of section 304(c)) a
corporation -
(1) participation in or cooperation with an international
boycott by such corporation shall be presumed to be such
participation or cooperation by such person, and
(2) participation in or cooperation with such a boycott by such
person shall be presumed to be such participation or cooperation
by such corporation.
(f) Willful failure to report
Any person (within the meaning of section 6671(b)) required to
report under this section who willfully fails to make such report
shall, in addition to other penalties provided by law, be fined not
more than $25,000, imprisoned for not more than one year, or both.