[Code of Federal Regulations]
[Title 48, Volume 7]
[Revised as of October 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 48CFR3009.104-72]

[Page 72-73]
 
            TITLE 48--FEDERAL ACQUISITION REGULATIONS SYSTEM
 
     CHAPTER 30--DEPARTMENT OF HOMELAND SECURITY, HOMELAND SECURITY 
                      ACQUISITION REGULATION (HSAR)
 
Sec. 3009.104-72  Definitions.

    As used in this subpart--
    Expanded Affiliated Group means an affiliated group as defined in 
section 1504(a) of the Internal Revenue Code of 1986 (without regard to 
section 1504(b) of such Code), except that section 1504

[[Page 73]]

of such Code shall be applied by substituting `more than 50 percent' for 
`at least 80 percent' each place it appears.
    Foreign Incorporated Entity means any entity which is, or but for 
section 835(b) of the Homeland Security Act, 6 U.S.C. 395(b), would be, 
treated as a foreign corporation for purposes of the Internal Revenue 
Code of 1986.
    Inverted Domestic Corporation. A foreign incorporated entity shall 
be treated as an inverted domestic corporation if, pursuant to a plan 
(or a series of related transactions)--
    (1) The entity completes the direct or indirect acquisition of 
substantially all of the properties held directly or indirectly by a 
domestic corporation or substantially all of the properties constituting 
a trade or business of a domestic partnership;
    (2) After the acquisition at least 80 percent of the stock (by vote 
or value) of the entity is held--
    (i) In the case of an acquisition with respect to a domestic 
corporation, by former shareholders of the domestic corporation by 
reason of holding stock in the domestic corporation; or
    (ii) In the case of an acquisition with respect to a domestic 
partnership, by former partners of the domestic partnership by reason of 
holding a capital or profits interest in the domestic partnership; and
    (3) The expanded affiliated group which after the acquisition 
includes the entity does not have substantial business activities in the 
foreign country in which or under the law of which the entity is created 
or organized when compared to the total business activities of such 
expanded affiliated group.
    Person, domestic, and foreign have the meanings given such terms by 
paragraphs (1), (4), and (5) of section 7701(a) of the Internal Revenue 
Code of 1986, respectively.

[68 FR 67871, Dec. 4, 2003, as amended at 71 FR 25769, May 2, 2006]