text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``Fairness for Working Americans Act 
  of 2004''.
  
  SEC. 2. INCREASE IN REFUNDABILITY OF THE CHILD TAX CREDIT.
  
      (a) Acceleration of Refundability.--Clause (i) of section 
  24(d)(1)(B) of the Internal Revenue Code of 1986 (relating to portion 
  of credit refundable) is amended by striking ``(10 percent in the case 
  of taxable years beginning before January 1, 2005)''.
      (b) Earned Income Includes Combat Pay.--Paragraph (1) of section 
  24(d) of such Code is amended by adding at the end the following new 
  sentence: ``For purposes of subparagraph (B), any amount excluded from 
  gross income by reason of section 112 shall be treated as earned income 
  which is taken into account in computing taxable income for the taxable 
  year.''.
      (c) Effective Date.--The amendments made by this section shall 
  apply to taxable years beginning after December 31, 2003.
  
  SEC. 3. PREVENTION OF CORPORATE EXPATRIATION TO AVOID UNITED STATES 
                INCOME TAX.
  
      (a) In General.--Paragraph (4) of section 7701(a) of the Internal 
  Revenue Code of 1986 (defining domestic) is amended to read as follows:
              ``(4) Domestic.--
                      ``(A) In general.--Except as provided in 
                  subparagraph (B), the term `domestic' when applied to a 
                  corporation or partnership means created or organized 
                  in the United States or under the law of the United 
                  States or of any State unless, in the case of a 
                  partnership, the Secretary provides otherwise by 
                  regulations.
                      ``(B) Certain corporations treated as domestic.--
                              ``(i) In general.--The acquiring 
                          corporation in a corporate expatriation 
                          transaction shall be treated as a domestic 
                          corporation.
                              ``(ii) Corporate expatriation 
                          transaction.--For purposes of this 
                          subparagraph, the term `corporate expatriation 
                          transaction' means any transaction if--
                                      ``(I) a nominally foreign 
                                  corporation (referred to in this 
                                  subparagraph as the `acquiring 
                                  corporation') acquires, as a result of 
                                  such transaction, directly or 
                                  indirectly substantially all of the 
                                  properties held directly or indirectly 
                                  by a domestic corporation, and
                                      ``(II) immediately after the 
                                  transaction, more than 80 percent of 
                                  the stock (by vote or value) of the 
                                  acquiring corporation is held by former 
                                  shareholders of the domestic 
                                  corporation by reason of holding stock 
                                  in the domestic corporation.
                              ``(iii) Lower stock ownership requirement 
                          in certain cases.--Subclause (II) of clause 
                          (ii) shall be applied by substituting `50 
                          percent' for `80 percent' with respect to any 
                          nominally foreign corporation if--
                                      ``(I) such corporation does not 
                                  have substantial business activities 
                                  (when compared to the total business 
                                  activities of the expanded affiliated 
                                  group) in the foreign country in which 
                                  or under the law of which the 
                                  corporation is created or organized, 
                                  and
                                      ``(II) the stock of the corporation 
                                  is publicly traded and the principal 
                                  market for the public trading of such 
                                  stock is in the United States.
                              ``(iv) Partnership transactions.--The term 
                          `corporate expatriation transaction' includes 
                          any transaction if--
                                      ``(I) a nominally foreign 
                                  corporation (referred to in this 
                                  subparagraph as the `acquiring 
                                  corporation') acquires, as a result of 
                                  such transaction, directly or 
                                  indirectly properties constituting a 
                                  trade or business of a domestic 
                                  partnership,
                                      ``(II) immediately after the 
                                  transaction, more than 80 percent of 
                                  the stock (by vote or value) of the 
                                  acquiring corporation is held by former 
                                  partners of the domestic partnership or 
                                  related foreign partnerships 
                                  (determined without regard to stock of 
                                  the acquiring corporation which is sold 
                                  in a public offering related to the 
                                  transaction), and
                                      ``(III) the acquiring corporation 
                                  meets the requirements of subclauses 
                                  (I) and (II) of clause (iii).
                              ``(v) Special rules.--For purposes of this 
                          subparagraph--
                                      ``(I) a series of related 
                                  transactions shall be treated as 1 
                                  transaction, and
                                      ``(II) stock held by members of the 
                                  expanded affiliated group which 
                                  includes the acquiring corporation 
                                  shall not be taken into account in 
                                  determining ownership.
                              ``(vi) Other definitions.--For purposes of 
                          this subparagraph--
                                      ``(I) Nominally foreign 
                                  corporation.--The term `nominally 
                                  foreign corporation' means any 
                                  corporation which would (but for this 
                                  subparagraph) be treated as a foreign 
                                  corporation.
                                      ``(II) Expanded affiliated group.--
                                  The term `expanded affiliated group' 
                                  means an affiliated group (as defined 
                                  in section 1504(a) without regard to 
                                  section 1504(b)).
                                      ``(III) Related foreign 
                                  partnership.--A foreign partnership is 
                                  related to a domestic partnership if 
                                  they are under common control (within 
                                  the meaning of section 482), or they 
                                  shared the same trademark or 
                                  tradename.''
      (b) Effective Dates.--
              (1) In general.--The amendment made by this section shall 
          apply to corporate expatriation transactions completed after 
          September 11, 2001.
              (2) Special rule.--The amendment made by this section shall 
          also apply to corporate expatriation transactions completed on 
          or before September 11, 2001, but only with respect to taxable 
          years of the acquiring corporation beginning after December 31, 
          2003.
target: Fairness for Working Americans Act of 2004 - Amends the Internal Revenue Code to: (1) eliminate the reduction in the percentage of earned income for calculating the refundable portion of the child tax credit (15 to ten percent) for taxable years beginning before 2005; (2) include in earned income for purposes of calculating the refundable portion of the credit otherwise tax excludable combat zone compensation of members of the armed services; and (3) set forth rules for the tax treatment of certain foreign corporations engaging in tax avoidance activities as U.S. domestic corporations.
feat_title: To amend the Internal Revenue Code of 1986 to increase the refundability of the child tax credit.