Title 26 — Internal Revenue Code

Part V · Chapter 1 — Normal Taxes and Surtaxes

§ 999. Reports by taxpayers; determinations

Statutory text

International boycott reports by taxpayers

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 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

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.

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).

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)).

Participation in or cooperation with an international boycott

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.

Special rule

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.

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.

Definition of boycott participation and cooperation

For purposes of this section, a person participates in or cooperates with an international boycott if he agrees—

as a condition of doing business directly or indirectly within a country or with the government, a company, or a national of a country—

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;

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;

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

to refrain from employing individuals of a particular nationality, race, or religion; or

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)).

Compliance with certain laws

This section shall not apply to any agreement by a person (or such member)—

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,

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

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.

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.

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).

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.

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.

Participation or cooperation by related persons

If a person controls (within the meaning of section 304(c)) a corporation—

participation in or cooperation with an international boycott by such corporation shall be presumed to be such participation or cooperation by such person, and

participation in or cooperation with such a boycott by such person shall be presumed to be such participation or cooperation by such corporation.

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.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1976
Pub. L. 94–455 title X § 1064(a) · 90 Stat. 1520
Enacted · 26 U.S.C. § 999
Added Pub. L. 94–455, title X, § 1064(a), Oct. 4, 1976, 90 Stat. 1650
Source evidence
Code source credit
Added Pub. L. 94–455, title X, § 1064(a), Oct. 4, 1976, 90 Stat. 1650
Enacted provision · exact public law section
(a) In General.— Subchapter N of chapter 1 (relating to tax based on income from sources within or without the United States) is amended by adding at the end thereof the following new part: “PART V— INTERNATIONAL BOYCOTT DETERMINATIONS “Sec. 969. Reports by taxpayers: determinations. “SEC. 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 it 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 cooperation 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 (h)) shall report such 26 USC 951. operations to the Secretary at such time and in such manner as the Secretary prescribes, except that in the ease of a foreign corporation such report shall he 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 rutty 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, ail operations of the tax-payer or such group in that country and in any other country which requires participation in or cooperation with the boycott us 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 of 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) Non boycott operations.— A clearly separate and identifiable operation of a person, or of a member of the controlled croup (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 be 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)(3), the international boycott factor is a fraction, determined under regulations prescribed by the Secretary, the numerator of which reflects the worldwide operations of a person (or, in the case of a controlled 26 USC 993. 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 worldwide 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 Ante, p. 1649. Ante, p. 1650. 995(b)(1)(D)(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). Ante, p. 1650. “(3) Worldwide operations.— For purposes of this subsection, the term ‘worldwide operations’ means operations in or related to countries other than the United States. “(d) Determinations 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 will-fully 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.”.
1978
Pub. L. 95–600 § 703(h)(2) · 92 Stat. 2763
Substituted · 26 U.S.C. § 999(c)(1)
Pub. L. 95–600, § 703(h)(2), substituted “995(b)(1)(F)(ii)” for “995(b)(3)”
Source evidence
Code amendment note
Subsec. (c)(1). Pub. L. 95–600, § 703(h)(2), substituted “995(b)(1)(F)(ii)” for “995(b)(3)”.
Enacted provision · exact public law section
(2) Paragraph (1) of section 999(c) (relating to international boycott factor) is amended by striking out “995(b)(3)” and inserting in lieu thereof “995(b)(1)(F)(ii)”.
1978
Pub. L. 95–600 § 703(h)(3) · 92 Stat. 2763
Substituted · 26 U.S.C. § 999(c)(2)
Pub. L. 95–600, § 703(h)(3), substituted “995(b)(1)(F)(ii)” for “995(b)(1)(D)(ii)”
Source evidence
Code amendment note
Subsec. (c)(2). Pub. L. 95–600, § 703(h)(3), substituted “995(b)(1)(F)(ii)” for “995(b)(1)(D)(ii)”.
Enacted provision · exact public law section
(3) Paragraph (2) of section 999(c) is amended by striking out “995(b)(1)(D)(ii)” and inserting in lieu thereof “995(b)(1)(F)(ii)”.
1984
Tax Reform Act of 1984
Pub. L. 98–369 div. A title VIII § 802(c)(3) · 98 Stat. 494
Repealed · 26 U.S.C. § 999(c)(1); 26 U.S.C. § 999(c)(2)
Pub. L. 98–369 which substituted “995(b)(1)(F)(i)” for “995(b)(1)(F)(ii)” wherever appearing was repealed. See 1986 Amendment note above
Source evidence
Code amendment note
Subsec. (c)(1), (2). Pub. L. 98–369 which substituted “995(b)(1)(F)(i)” for “995(b)(1)(F)(ii)” wherever appearing was repealed. See 1986 Amendment note above.
Enacted provision · exact public law section
(3) Subsection (c) of section 999 (relating to international 26 USC 999. boycott factor) is amended by striking out “995(b)(1)(F)(ii)” each place it appears and inserting in lieu thereof “995(b)(L)(F)(i)”.
1986
Tax Reform Act of 1986
Pub. L. 99–514 title XVIII § 1876(p)(3) · 100 Stat. 2085
Repealed · 26 U.S.C. § 999(c)(1); 26 U.S.C. § 999(c)(2)
Pub. L. 99–514 repealed section 802(c)(3) of Pub. L. 98–369 thereby restoring former text. See 1984 Amendment note below
Source evidence
Code amendment note
Subsec. (c)(1), (2). Pub. L. 99–514 repealed section 802(c)(3) of Pub. L. 98–369 thereby restoring former text. See 1984 Amendment note below.
Enacted provision · exact public law section
(3) Paragraph (3) of section 802(c) of the Tax Reform Act of 1984 is hereby repealed
2000
Pub. L. 106–519 § 4(5) · 114 Stat. 2423
Inserted · 26 U.S.C. § 999(c)(1)
Pub. L. 106–519 inserted “941(a)(5),” after “908(a),”
Source evidence
Code amendment note
Subsec. (c)(1). Pub. L. 106–519 inserted “941(a)(5),” after “908(a),”.
Enacted provision · exact public law section
(5) Section 999(c)(1) is amended by inserting “941(a)(5),” 26 USC 999. after “908(a),”.
2004
Pub. L. 108–357 title I § 101(b)(8) · 118 Stat. 1418
Struck · 26 U.S.C. § 999(c)(1)
Pub. L. 108–357 struck out “941(a)(5),” after “sections 908(a),”
Source evidence
Code amendment note
Subsec. (c)(1). Pub. L. 108–357 struck out “941(a)(5),” after “sections 908(a),”.
Enacted provision · exact public law section
(8) Section 999(c)(1) is amended by striking “941(a)(5),”.
Effective date note
Amendment by Pub. L. 108–357 applicable to transactions after Dec. 31, 2004, see section 101(c) of Pub. L. 108–357, set out as a note under section 56 of this title.

7 of 7 references resolved to an enrolled provision

Editorial Notes

Amendments1978–2004 · 5 rounds

2004

Subsec. (c)(1). Pub. L. 108–357 struck out “941(a)(5),” after “sections 908(a),”.

2000

Subsec. (c)(1). Pub. L. 106–519 inserted “941(a)(5),” after “908(a),”.

1986

Subsec. (c)(1), (2). Pub. L. 99–514 repealed section 802(c)(3) of Pub. L. 98–369 thereby restoring former text. See 1984 Amendment note below.

1984

Subsec. (c)(1), (2). Pub. L. 98–369 which substituted “995(b)(1)(F)(i)” for “995(b)(1)(F)(ii)” wherever appearing was repealed. See 1986 Amendment note above.

1978

Subsec. (c)(1). Pub. L. 95–600, § 703(h)(2), substituted “995(b)(1)(F)(ii)” for “995(b)(3)”.

Subsec. (c)(2). Pub. L. 95–600, § 703(h)(3), substituted “995(b)(1)(F)(ii)” for “995(b)(1)(D)(ii)”.

Statutory Notes and Related Subsidiaries

Effective Date of 2004 Amendment

Amendment by Pub. L. 108–357 applicable to transactions after Dec. 31, 2004, see section 101(c) of Pub. L. 108–357, set out as a note under section 56 of this title.

Effective Date of 2000 Amendment

Amendment by Pub. L. 106–519 applicable to transactions after Sept. 30, 2000, with special rules relating to existing foreign sales corporations, see section 5 of Pub. L. 106–519, set out as a note under section 56 of this title.

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable to transactions after Dec. 31, 1984, in taxable years ending after such date, see section 805(a)(1) of Pub. L. 98–369, as amended, set out as a note under section 245 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–600 effective on Oct. 4, 1976, see section 703(r) of Pub. L. 95–600, set out as a note under section 46 of this title.

Effective Date

Section applicable to participation in or cooperation with an international boycott more than 30 days after Oct. 4, 1976, with special provisions for existing contracts, see section 1066(a) of Pub. L. 94–455, set out as an Effective Date of 1976 Amendment note under section 908 of this title.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

Reports by the Secretary

Pub. L. 94–455, title X, § 1067, Oct. 4, 1976, 90 Stat. 1654, as amended by Pub. L. 98–369, div. A, title IV, § 441(c), July 18, 1984, 98 Stat. 815, which required the Secretary to transmit a report every four years to the Committee on Ways and Means of the House of Representatives and to the Committee on Finance of the Senate relating to reports filed under section 999(a) of this title and describing the administration of provisions relating to international boycott activity, terminated, effective May 15, 2000, pursuant to section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance. See, also, page 141 of House Document No. 103–7.

Credits

1976–2004 · 6 acts

1976Added Pub. L. 94–455, title X, § 1064(a), Oct. 4, 1976, 90 Stat. 1650
1978amended Pub. L. 95–600, title VII, § 703(h)(2), (3), Nov. 6, 1978, 92 Stat. 2940
1984Pub. L. 98–369, div. A, title VIII, § 802(c)(3), July 18, 1984, 98 Stat. 999
1986Pub. L. 99–514, title XVIII, § 1876(p)(3), Oct. 22, 1986, 100 Stat. 2902
2000Pub. L. 106–519, § 4(5), Nov. 15, 2000, 114 Stat. 2433
2004Pub. L. 108–357, title I, § 101(b)(8), Oct. 22, 2004, 118 Stat. 1423.

Show as published

(Added Pub. L. 94–455, title X, § 1064(a), Oct. 4, 1976, 90 Stat. 1650; amended Pub. L. 95–600, title VII, § 703(h)(2), (3), Nov. 6, 1978, 92 Stat. 2940; Pub. L. 98–369, div. A, title VIII, § 802(c)(3), July 18, 1984, 98 Stat. 999; Pub. L. 99–514, title XVIII, § 1876(p)(3), Oct. 22, 1986, 100 Stat. 2902; Pub. L. 106–519, § 4(5), Nov. 15, 2000, 114 Stat. 2433; Pub. L. 108–357, title I, § 101(b)(8), Oct. 22, 2004, 118 Stat. 1423.)