controlled group of entities
(2) (A) If any employee of a foreign person is performing services in connection with a contract between the United States Government (or any instrumentality thereof) and any member of any domestically controlled group of entities which includes such foreign person, such foreign person shall be treated as an American employer with respect to such services performed by such employee. (B) For purposes of this paragraph— (i) The term “domestically controlled group of entities” means a controlled group of entities the common parent of which is a domestic corporation. (ii) The term “controlled group of entities” means a controlled group of corporations as defined in section 1563(a)(1) of the Internal Revenue Code of 1986, except that— (I) “more than 50 percent” shall be substituted for “at least 80 percent” each place it appears therein, and (II) the determination shall be made without regard to subsections (a)(4) and (b)(2) of section 1563 of such Code. A partnership or any other entity (other than a corporation) shall be treated as a member of a controlled group of entities if such entity is controlled (within the meaning of section 954(d)(3) of such Code) by members of such group (including any entity treated as a member of such group by reason of this sentence). (C) Subparagraph (A) shall not apply to any services to which paragraph (1) of section 3121(z) of the Internal Revenue Code of 1986 does not apply by reason of paragraph (4) of such section.