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