To amend the Internal Revenue Code of 1986 to provide that certain bona fide residents of the Virgin Islands who are shareholders of corporations organized under the laws of the Virgin Islands are not treated as United States persons for purposes of determining certain inclusions in gross income with respect to such corporations.

I 117TH CONGRESS 1ST SESSION H. R. 1427 To amend the Internal Revenue Code of 1986 to provide that certain bona fide residents of the Virgin Islands who are shareholders of corporations organized under the laws of the Virgin Islands are not treated as United States persons for purposes of determining certain inclusions in gross income with respect to such corporations. IN THE HOUSE OF REPRESENTATIVES FEBRUARY 26, 2021 Ms. PLASKETT 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 that certain bona fide residents of the Virgin Islands who are shareholders of corporations organized under the laws of the Virgin Islands are not treated as United States persons for purposes of determining certain inclu- sions in gross income with respect to such corporations. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 18:27 Apr 06, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1427.IH H1427 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 1427 IH SECTION 1. CERTAIN BONA FIDE RESIDENTS OF VIRGIN IS- 1 LANDS NOT TREATED AS UNITED STATES 2 SHAREHOLDERS OF CORPORATIONS ORGA- 3 NIZED IN THE VIRGIN ISLANDS. 4 (a) IN GENERAL.—Section 957(c) of the Internal 5 Revenue Code of 1986 is amended by striking ‘‘and’’ at 6 the end of paragraph (1), by redesignating paragraph (2) 7 as paragraph (3), and by inserting after paragraph (1) 8 the following new paragraph: 9 ‘‘(2) with respect to a corporation organized 10 under the laws of the Virgin Islands, such term does 11 not include an individual who is a bona fide resident 12 of the Virgin Islands, if a dividend received by such 13 individual during the taxable year from such cor- 14 poration would, for purposes of section 934(b)(1), be 15 treated as income derived from sources within the 16 Virgin Islands, and’’. 17 (b) CONFORMING AMENDMENT.—Section 957(c) of 18 such Code is amended by striking ‘‘paragraph (2)’’ in the 19 last sentence and inserting ‘‘paragraph (3)’’. 20 (c) EFFECTIVE DATE.—The amendments made by 21 this section shall apply to taxable years of foreign corpora- 22 tions beginning after December 31, 2020, and taxable 23 years of individuals within which or with which such tax- 24 able years of foreign corporations end. 25 Æ VerDate Sep 11 2014 18:27 Apr 06, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6301 E:\BILLS\H1427.IH H1427 pamtmann on DSKBC07HB2PROD with BILLS