,i #aacth ,,congress #ast ,session ,h4 ,r4 #aeed ,,in ,,the ,,house ,,of ,,representatives ,april #ae1 #bjac ,mr4 ,doggett 7for himself1 ,ms4 ,bass1 ,mr4 ,becerra1 ,mr4 ,blumenauer1 ,mr4 ,capuano1 ,ms4 ,chu1 ,mr4 ,cicilline1 ,mr4 ,conyers1 ,mr4 ,cummings1 ,mr4 ,de,fazio1 ,ms4 ,de,gette1 ,ms4 ,de,lauro1 ,mr4 ,deutch1 ,mr4 ,dingell1 ,ms4 ,edwards1 ,mr4 ,ellison1 ,mr4 ,farr1 ,mr4 ,gene ,green of ,texas1 ,mr4 ,grijalva1 ,mr4 ,higgins1 ,mr4 ,huffman1 ,ms4 ,eddie ,bernice ,johnson of ,texas1 ,mr4 ,johnson of ,georgia1 ,mr4 ,larson of ,connecticut1 ,ms4 ,lee of ,california1 ,mr4 ,loebsack1 ,mr4 ,lynch1 ,mr4 ,markey1 ,ms4 ,mc,collum1 ,mr4 ,mc,dermott1 ,mr4 ,mc,govern1 ,mr4 ,george ,miller of ,california1 ,ms4 ,moore1 ,mr4 ,moran1 ,mr4 ,pascrell1 ,mr4 ,peters of ,michigan1 ,mr4 ,rush1 ,ms4 ,schakowsky1 ,mr4 ,sherman1 ,ms4 ,slaughter1 ,mr4 ,tierney1 ,mr4 ,tonko1 ,ms4 ,tsongas1 ,mr4 ,van ,hollen1 ,mr4 ,welch1 ,mr4 ,yarmuth1 ,mr4 ,langevin1 ,mr4 ,holt1 ,mr4 ,lipinski1 ,mr4 ,gutierrez1 ,mr4 ,lewis1 ,mr4 ,garamendi1 ,mr4 ,payne1 and ,mr4 ,cohen7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committee on ,financial ,services1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to restrict the use of offshore tax havens and abusive tax shelters to inappropriately avoid ,federal taxation1 and for other purposes4 #a4 ,short title2 etc 7a7 ,short title ,this ,act may be cited as the ,stop ,tax ,haven ,abuse ,act4 7b7 ,amendment of #aihf code ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 7c7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title2 etc4 ,title ,i--,deterring the use of tax havens for tax evasion ,sec4 #aja4 ,authorizing special measures against foreign jurisdictions1 financial institutions1 and others that significantly impede ,united ,states tax enforcement4 ,sec4 #ajb4 ,strengthening the ,foreign ,account ,tax ,compliance ,act 7,,fatca74 ,sec4 #ajc4 ,treatment of foreign corporations managed and controlled in the ,united ,states as domestic corporations4 ,sec4 #ajd4 ,reporting ,united ,states beneficial owners of foreign owned financial accounts4 ,sec4 #aje4 ,swap payments made from the ,united ,states to persons offshore4 ,title ,,ii--,other measures to combat tax haven and tax shelter abuses ,sec4 #bja4 ,country-by-country reporting4 ,sec4 #bjb4 ,penalty for failing to disclose offshore holdings4 ,sec4 #bjc4 ,deadline for anti-money laundering rule for investment advisers4 ,sec4 #bjd4 ,anti-money laundering requirements for formation agents4 ,sec4 #bje4 ,strengthening ,john ,doe summons proceedings4 ,sec4 #bjf4 ,improving enforcement of foreign financial account reporting4 ,title ,,iii--,combating tax shelter promoters ,sec4 #cja4 ,penalty for promoting abusive tax shelters4 ,sec4 #cjb4 ,penalty for aiding and abetting the understatement of tax liability4 ,sec4 #cjc4 ,prohibited fee arrangement4 ,sec4 #cjd4 ,preventing tax shelter activities by financial institutions4 ,sec4 #cje4 ,information sharing for enforcement purposes4 ,sec4 #cjf4 ,disclosure of information to ,congress4 ,sec4 #cjg4 ,tax opinion standards for tax practitioners4 ,i ,deterring the use of tax havens for tax evasion #aja4 ,authorizing special measures against foreign jurisdictions1 financial institutions1 and others that significantly impede ,united ,states tax enforcement ,section #ecah;,a of title #ca1 ,united ,states ,code1 is amended-- 7#a7 by striking the section heading and inserting the following3 #ecah;,a4 ,special measures for jurisdictions1 financial institutions1 or international transactions that are of primary money laundering concern or significantly impede ,united ,states tax enforcement 2 7#b7 in subsection 7a71 by striking the subsection heading and inserting the following3 7a7 ,special measures ,to counter money laundering and efforts to significantly impede ,united ,states tax enforcement 2 7#c7 in subsection 7c7-- 7,a7 by striking the subsection heading and inserting the following3 7c7 ,consultations and information ,to be considered in finding jurisdictions1 institutions1 types of accounts1 or transactions ,to be of primary money laundering concern or ,to be significantly impeding ,united ,states tax enforcement 2 and 7,b7 by inserting at the end of paragraph 7#b7 thereof the following new subparagraph3 7,c7 ,other considerations ,the fact that a jurisdiction or financial institution is cooperating with the ,united ,states on implementing the requirements specified in chapter #d of the ,internal ,revenue ,code of #aihf may be favorably considered in evaluating whether such jurisdiction or financial institution is significantly impeding ,united ,states tax enforcement4 2 7#d7 in subsection 7a77#a71 by inserting or is significantly impeding ,united ,states tax enforcement after primary money laundering concern2 7#e7 in subsection 7a77#d7-- 7,a7 in subparagraph 7,a7-- 7i7 by inserting in matters involving money laundering1 before shall consult2 and 7ii7 by striking and at the end2 7,b7 by redesignating subparagraph 7,b7 as subparagraph 7,c72 and 7,c7 by inserting after subparagraph 7,a7 the following3 7,b7 in matters involving ,united ,states tax enforcement1 shall consult with the ,commissioner of the ,internal ,revenue1 the ,secretary of ,state1 the ,attorney ,general of the ,united ,states1 and in the sole discretion of the ,secretary1 such other agencies and interested parties as the ,secretary may find to be appropriate2 and 2 7#f7 in each of paragraphs 7#a77;,a71 7#b71 7#c71 and 7#d7 of subsection 7b71 by inserting or to be significantly impeding ,united ,states tax enforcement after primary money laundering concern each place that term appears2 7#g7 in subsection 7b71 by striking paragraph 7#e7 and inserting the following3 7#e7 ,prohibitions or conditions on opening or maintaining certain correspondent or payable-through accounts or authorizing certain payment cards ,if the ,secretary finds a jurisdiction outside of the ,united ,states1 #a or more financial institutions operating outside of the ,united ,states1 or #a or more classes of transactions within or involving a jurisdiction outside of the ,united ,states to be of primary money laundering concern or to be significantly impeding ,united ,states tax enforcement1 the ,secretary1 in consultation with the ,secretary of ,state1 the ,attorney ,general of the ,united ,states1 and the ,chairman of the ,board of ,governors of the ,federal ,reserve ,system1 may prohibit1 or impose conditions upon-- 7,a7 the opening or maintaining in the ,united ,states of a correspondent account or payable-through account2 or 7,b7 the authorization1 approval1 or use in the ,united ,states of a credit card1 charge card1 debit card1 or similar credit or debit financial instrument by any domestic financial institution1 financial agency1 or credit card company or association1 for or on behalf of a foreign banking institution1 if such correspondent account1 payable-through account1 credit card1 charge card1 debit card1 or similar credit or debit financial instrument1 involves any such jurisdiction or institution1 or if any such transaction may be conducted through such correspondent account1 payable-through account1 credit card1 charge card1 debit card1 or similar credit or debit financial instrument4 2 7#h7 in subsection 7c77#a71 by inserting or is significantly impeding ,united ,states tax enforcement after primary money laundering concern2 7#i7 in subsection 7c77#b77;,a7-- 7,a7 in clause 7ii71 by striking bank secrecy or special regulatory advantages and inserting bank1 tax1 corporate1 trust1 or financial secrecy or regulatory advantages2 7,b7 in clause 7iii71 by striking supervisory and counter-money and inserting supervisory1 international tax enforcement1 and counter-money2 7,c7 in clause 7v71 by striking banking or secrecy and inserting banking1 tax1 or secrecy2 and 7,d7 in clause 7vi71 by inserting 1 tax treaty1 or tax information exchange agreement after treaty2 7#aj7 in subsection 7c77#b77;,b7-- 7,a7 in clause 7i71 by inserting or tax evasion after money laundering2 and 7,b7 in clause 7iii71 by inserting 1 tax evasion1 after money laundering2 and 7#aa7 in subsection 7d71 by inserting involving money laundering1 and shall notify1 in writing1 the ,committee on ,finance of the ,senate and the ,committee on ,ways and ,means of the ,house of ,representatives of any such action involving ,united ,states tax enforcement after such action4 #ajb4 ,strengthening the ,foreign ,account ,tax ,compliance ,act 7,,fatca7 7a7 ,reporting activities with respect to passive foreign investment companies ,section #abih7;f7 is amended by inserting 1 or who directly or indirectly forms1 transfers assets to1 is a beneficiary of1 has a beneficial interest in1 or receives money or property or the use thereof from1 after shareholder of4 7b7 ,withholdable payments to foreign financial institutions ,section #adga7;d7 is amended-- 7#a7 by inserting or transaction after any depository in paragraph 7#b77;,a71 and 7#b7 by striking or any interest and all that follows in paragraph 7#e77;,c7 and inserting derivatives1 or any interest 7including a futures or forward contract1 swap1 or option7 in such securities1 partnership interests1 commodities1 or derivatives44 7c7 ,withholdable payments to other foreign financial institutions ,section #adgb is amended-- 7#a7 by inserting as a result of any customer identification1 anti-money laundering1 anti-corruption1 or similar obligation to identify account holders1 after reason to know1 in subsection 7b77#b71 and 7#b7 by inserting as posing a low risk of tax evasion after this subsection in subsection 7c77#a77;,g74 7d7 ,definitions ,clauses 7i7 and 7ii7 of section #adgc7b77;,a7 are each amended by inserting or as a beneficial owner after indirectly4 7e7 ,special rules ,section #adgd7;c7 is amended-- 7#a7 by inserting 1 except that information provided under sections #adga7;c7 or #adgb7;b7 may be disclosed to any ,federal law enforcement agency1 upon request or upon the initiation of the ,secretary1 to investigate or address a possible violation of ,united ,states law after shall apply in paragraph 7#a71 and 7#b7 by inserting 1 or has had an agreement terminated under such section1 after section #adga7;b7 in paragraph 7#b74 7f7 ,information with respect to foreign financial assets ,section #fjch;,d7a7 is amended by inserting ownership or beneficial ownership after holds any4 7g7 ,establishing presumptions for entities and transactions involving non-,,fatca institutions 7#a7 ,presumptions for tax purposes 7,a7 ,in general ,chapter #gf is amended by inserting after section #gdia the following new subchapter3 ,f ,presumptions for certain legal proceedings ,sec4 #gdib4 ,presumptions pertaining to entities and transactions involving non-,,fatca institutions4 #gdib4 ,presumptions pertaining to entities and transactions involving non-,,fatca institutions 7a7 ,control ,for purposes of any ,united ,states civil judicial or administrative proceeding to determine or collect tax1 there shall be a rebuttable presumption that a ,united ,states person 7other than an entity with shares regularly traded on an established securities market7 who1 directly or indirectly1 formed1 transferred assets to1 was a beneficiary of1 had a beneficial interest in1 or received money or property or the use thereof from an entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation 7other than an entity with shares regularly traded on an established securities market71 that holds an account1 or in any other manner has assets1 in a non-,,fatca institution1 exercised control over such entity4 ,the presumption of control created by this subsection shall not be applied to prevent the ,secretary from determining or arguing the absence of control4 7b7 ,transfers of income ,for purposes of any ,united ,states civil judicial or administrative proceeding to determine or collect tax1 there shall be a rebuttable presumption that any amount or thing of value received by a ,united ,states person 7other than an entity with shares regularly traded on an established securities market7 directly or indirectly from an account or from an entity 7other than an entity with shares regularly traded on an established securities market7 that holds an account1 or in any other manner has assets1 in a non-,,fatca institution1 constitutes income of such person taxable in the year of receipt2 and any amount or thing of value paid or transferred by or on behalf of a ,united ,states person 7other than an entity with shares regularly traded on an established securities market7 directly or indirectly to an account1 or entity 7other than an entity with shares regularly traded on an established securities market7 that holds an account1 or in any other manner has assets1 in a non-,,fatca institution1 represents previously unreported income of such person taxable in the year of the transfer4 7c7 ,rebutting the presumptions ,the presumptions established in this section may be rebutted only by clear and convincing evidence1 including detailed documentary1 testimonial1 and transactional evidence1 establishing that-- 7#a7 in subsection 7a71 such taxpayer exercised no control1 directly or indirectly1 over account or entity at the time in question1 and 7#b7 in subsection 7b71 such amounts or things of value did not represent income related to such ,united ,states person4 ,any court having jurisdiction of a civil proceeding in which control of such an offshore account or offshore entity or the income character of such receipts or amounts transferred is an issue shall prohibit the introduction by the taxpayer of any foreign based document that is not authenticated in open court by a person with knowledge of such document1 or any other evidence supplied by a person outside the jurisdiction of a ,united ,states court1 unless such person appears before the court4 4 7,b7 ,the table of subchapters for chapter #gf is amended by inserting after the item relating to subchapter ,e the following new item3 ,,subchapter ,f--,presumptions for certain legal proceedings 4 7#b7 ,definition of non-fatca institution ,section #ggja7;a7 is amended by adding at the end the following new paragraph3 7#ea7 ,non-fatca institution ,the term non-,,fatca institution means any financial institution that does not meet the reporting requirements of section #adga7;b74 4 7#c7 ,presumptions for securities law purposes ,section #ba of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghu7 is amended by adding at the end the following new subsection3 7j7 ,presumptions pertaining to control and beneficial ownership 7#a7 ,control ,for purposes of any civil judicial or administrative proceeding under this title1 there shall be a rebuttable presumption that a ,united ,states person 7other than an entity with shares regularly traded on an established securities market7 who1 directly or indirectly1 formed1 transferred assets to1 was a beneficiary of1 had a beneficial interest in1 or received money or property or the use thereof from an entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation 7other than an entity with shares regularly traded on an established securities market71 that holds an account1 or in any other manner has assets1 in a non-,,fatca institution 7as defined in section #ggja7;a77#ea7 of the ,internal ,revenue ,code of #aihf71 exercised control over such entity4 ,the presumption of control created by this paragraph shall not be applied to prevent the ,commission from determining or arguing the absence of control4 7#b7 ,beneficial ownership ,for purposes of any civil judicial or administrative proceeding under this title1 there shall be a rebuttable presumption that securities that are nominally owned by an entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation 7other than an entity with shares regularly traded on an established securities market71 and that are held in a non-,,fatca institution 7as so defined71 are beneficially owned by any ,united ,states person 7other than an entity with shares regularly traded on an established securities market7 who directly or indirectly exercised control over such entity4 ,the presumption of beneficial ownership created by this paragraph shall not be applied to prevent the ,commission from determining or arguing the absence of beneficial ownership4 4 7#d7 ,presumption for reporting purposes relating to foreign financial accounts ,section #ecad of title #ca1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7d7 ,rebuttable presumption ,for purposes of this section1 there shall be a rebuttable presumption that any account with a non-,,fatca institution 7as defined in section #ggja7;a77#ea7 of the ,internal ,revenue ,code of #aihf7 contains funds in an amount that is at least sufficient to require a report prescribed by regulations under this section4 4 7#e7 ,regulatory authority ,not later than #ahj days after the date of the enactment of this ,act1 the ,secretary of the ,treasury and the ,chairman of the ,securities and ,exchange ,commission shall each adopt regulations or other guidance necessary to implement the amendments made by this subsection4 ,the ,secretary and the ,chairman may by regulation or guidance provide that the presumption of control shall not extend to particular classes of transactions1 such as corporate reorganizations or transactions below a specified dollar threshold1 if either determines that applying such amendments to such transactions is not necessary to carry out the purposes of such amendments4 7h7 ,effective date ,the amendments made by this section shall take effect on the date which is #ahj days after the date of the enactment of this ,act1 whether or not regulations are issued under subsection 7g77#e74 #ajc4 ,treatment of foreign corporations managed and controlled in the ,united ,states as domestic corporations 7a7 ,in general ,section #ggja is amended by redesignating subsection 7p7 as subsection 7q7 and by inserting after subsection 7o7 the following new subsection3 7p7 ,certain corporations managed and controlled in the ,united ,states treated as domestic for income tax 7#a7 ,in general ,notwithstanding subsection 7a77#d71 in the case of a corporation described in paragraph 7#b7 if-- 7,a7 the corporation would not otherwise be treated as a domestic corporation for purposes of this title1 but 7,b7 the management and control of the corporation occurs1 directly or indirectly1 primarily within the ,united ,states1 then1 solely for purposes of chapter #a 7and any other provision of this title relating to chapter #a71 the corporation shall be treated as a domestic corporation4 7#b7 ,corporation described 7,a7 ,in general ,a corporation is described in this paragraph if-- 7i7 the stock of such corporation is regularly traded on an established securities market1 or 7ii7 the aggregate gross assets of such corporation 7or any predecessor thereof71 including assets under management for investors1 whether held directly or indirectly1 at any time during the taxable year or any preceding taxable year is #ej1jjj1jjj or more4 7,b7 ,general exception ,a corporation shall not be treated as described in this paragraph if-- 7i7 such corporation was treated as a corporation described in this paragraph in a preceding taxable year1 7ii7 such corporation-- 7,i7 is not regularly traded on an established securities market1 and 7,,ii7 has1 and is reasonably expected to continue to have1 aggregate gross assets 7including assets under management for investors1 whether held directly or indirectly7 of less than #ej1jjj1jjj1 and 7iii7 the ,secretary grants a waiver to such corporation under this subparagraph4 7,c7 ,exception from gross assets test ,subparagraph 7,a77ii7 shall not apply to a corporation which is a controlled foreign corporation 7as defined in section #ieg7 and which is a member of an affiliated group 7as defined section #aejd1 but determined without regard to section #aejd7;b77#c77 the common parent of which-- 7i7 is a domestic corporation 7determined without regard to this subsection71 and 7ii7 has substantial assets 7other than cash and cash equivalents and other than stock of foreign subsidiaries7 held for use in the active conduct of a trade or business in the ,united ,states4 7#c7 ,management and control 7,a7 ,in general ,the ,secretary shall prescribe regulations for purposes of determining cases in which the management and control of a corporation is to be treated as occurring primarily within the ,united ,states4 7,b7 ,executive officers and senior management ,such regulations shall provide that-- 7i7 the management and control of a corporation shall be treated as occurring primarily within the ,united ,states if substantially all of the executive officers and senior management of the corporation who exercise day-to-day responsibility for making decisions involving strategic1 financial1 and operational policies of the corporation are located primarily within the ,united ,states1 and 7ii7 individuals who are not executive officers and senior management of the corporation 7including individuals who are officers or employees of other corporations in the same chain of corporations as the corporation7 shall be treated as executive officers and senior management if such individuals exercise the day-to-day responsibilities of the corporation described in clause 7i74 7,c7 ,corporations primarily holding investment assets ,such regulations shall also provide that the management and control of a corporation shall be treated as occurring primarily within the ,united ,states if-- 7i7 the assets of such corporation 7directly or indirectly7 consist primarily of assets being managed on behalf of investors1 and 7ii7 decisions about how to invest the assets are made in the ,united ,states4 4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning on or after the date which is #b years after the date of the enactment of this ,act1 whether or not regulations are issued under section #ggja7p77#c7 of the ,internal ,revenue ,code of #aihf1 as added by this section4 #ajd4 ,reporting ,united ,states beneficial owners of foreign owned financial accounts 7a7 ,in general ,subpart ,b of part ,,iii of subchapter ,a of chapter #fa is amended by inserting after section #fjde;,b the following new sections3 #fjde;,c4 ,returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity 7a7 ,requirement of return ,if-- 7#a7 any withholding agent under sections #adda and #addb has the control1 receipt1 custody1 disposal1 or payment of any amount constituting gross income from sources within the ,united ,states of any foreign entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation 7other than an entity with shares regularly traded on an established securities market71 and 7#b7 such withholding agent determines for purposes of titles #ad1 #ah1 or #ca of the ,united ,states ,code that a ,united ,states person has any beneficial interest in the foreign entity or in the account in such entity's name 7hereafter in this section referred to as ,united ,states beneficial owner71 then the withholding agent shall make a return according to the forms or regulations prescribed by the ,secretary4 7b7 ,required information ,for purposes of subsection 7a7 the information required to be included on the return shall include-- 7#a7 the name1 address1 and1 if known1 the taxpayer identification number of the ,united ,states beneficial owner1 7#b7 the known facts pertaining to the relationship of such ,united ,states beneficial owner to the foreign entity and the account1 7#c7 the gross amount of income from sources within the ,united ,states 7including gross proceeds from brokerage transactions71 and 7#d7 such other information as the ,secretary may by forms or regulations provide4 7c7 ,statements ,to ,be furnished to beneficial owners with respect to whom information is required ,to ,be reported ,a withholding agent required to make a return under subsection 7a7 shall furnish to each ,united ,states beneficial owner whose name is required to be set forth in such return a statement showing-- 7#a7 the name1 address1 and telephone number of the information contact of the person required to make such return1 and 7#b7 the information required to be shown on such return with respect to such ,united ,states beneficial owner4 ,the written statement required under the preceding sentence shall be furnished to the ,united ,states beneficial owner on or before ,january #ca of the year following the calendar year for which the return under subsection 7a7 was required to be made4 ,in the event the person filing such return does not have a current address for the ,united ,states beneficial owner1 such written statement may be mailed to the address of the foreign entity4 #fjde;,d4 ,returns by financial institutions regarding establishment of accounts in non-,,fatca institutions 7a7 ,requirement of return ,any financial institution directly or indirectly opening a bank1 brokerage1 or other financial account for or on behalf of an offshore entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation 7other than an entity with shares regularly traded on an established securities market71 in a non-,,fatca institution 7as defined in section #ggja7;a77#ea77 at the direction of1 on behalf of1 or for the benefit of a ,united ,states person shall make a return according to the forms or regulations prescribed by the ,secretary4 7b7 ,required information ,for purposes of subsection 7a7 the information required to be included on the return shall include-- 7#a7 the name1 address1 and taxpayer identification number of such ,united ,states person1 7#b7 the name and address of the financial institution at which a financial account is opened1 the type of account1 the account number1 the name under which the account was opened1 and the amount of the initial deposit1 7#c7 if the account is held in the name of an entity1 the name and address of such entity1 the type of entity1 and the name and address of any company formation agent or other professional employed to form or acquire the entity1 and 7#d7 such other information as the ,secretary may by forms or regulations provide4 7c7 ,statements ,to be furnished to ,united ,states persons with respect to whom information is required ,to be reported ,a financial institution required to make a return under subsection 7a7 shall furnish to each ,united ,states person whose name is required to be set forth in such return a statement showing-- 7#a7 the name1 address1 and telephone number of the information contact of the person required to make such return1 and 7#b7 the information required to be shown on such return with respect to such ,united ,states person4 ,the written statement required under the preceding sentence shall be furnished to such ,united ,states person on or before ,january #ca of the year following the calendar year for which the return under subsection 7a7 was required to be made4 7d7 ,exemption ,the ,secretary may by regulations exempt any class of ,united ,states persons or any class of accounts or entities from the requirements of this section if the ,secretary determines that applying this section to such persons1 accounts1 or entities is not necessary to carry out the purposes of this section4 4 7b7 ,penalties 7#a7 ,returns ,section #fgbd7;d77#a77;,b7 is amended by striking or at the end of clause 7xxiv71 by striking and at the end of clause 7xxv71 and by adding after clause 7xxv7 the following new clauses3 7xxvi7 section #fjde;,c7a7 7relating to returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity71 or 7xxvii7 section #fjde;,d7a7 7relating to returns by financial institutions regarding establishment of accounts at non-,,fatca institutions71 and 4 7#b7 ,payee statements ,section #fgbd7;d77#b7 is amended by striking or at the end of subparagraph 7,,gg71 by striking the period at the end of subparagraph 7,,hh71 and by inserting after subparagraph 7,,hh7 the following new subparagraphs3 7,,ii7 section #fjde;,c7c7 7relating to returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity71 7,,jj7 section #fjde;,d7c7 7relating to returns by financial institutions regarding establishment of accounts at non-,,fatca institutions74 4 7c7 ,clerical amendment ,the table of sections for subpart ,b of part ,,iii of subchapter ,a of chapter #fa is amended by inserting after the item relating to section #fjde;,b the following new items3 ,sec4 #fjde;,c4 ,returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity4 ,sec4 #fjde;,d4 ,returns by financial institutions regarding establishment of accounts at non-,,fatca institutions4 4 7d7 ,additional penalties 7#a7 ,additional penalties on banks ,section #ebci7;b77#a7 of the ,revised ,statutes 7#ab ,u4,s4,c4 #ic7;b77#a77 is amended by inserting or any of the provisions of section #fjde;,d of the ,internal ,revenue ,code of #aihf1 after any regulation issued pursuant thereto14 7#b7 ,additional penalties on securities firms ,section #ba7;d77#c77;,a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghu7d77#c77;,a77 is amended by inserting any of the provisions of section #fjde;,d of the ,internal ,revenue ,code of #aihf1 after the rules or regulations thereunder14 7e7 ,regulatory authority and effective date 7#a7 ,regulatory ,authority ,not later than #ahj days after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall adopt regulations1 forms1 or other guidance necessary to implement this section4 7#b7 ,effective ,date ,section #fjde;,c of the ,internal ,revenue ,code of #aihf 7as added by this section7 and the amendment made by subsection 7d77#a7 shall take effect with respect to amounts paid into foreign owned accounts located in the ,united ,states after ,december #ca of the year of the date of the enactment of this ,act4 ,section #fjde;,d of such ,code 7as so added7 and the amendment made by subsection 7d77#b7 shall take effect with respect to accounts opened after ,december #ca of the year of the date of the enactment of this ,act4 #aje4 ,swap payments made from the ,united ,states to persons offshore 7a7 ,tax on swap payments received by foreign persons ,section #hga7;a77#a7 is amended-- 7#a7 by inserting swap payments 7as identified in section #abef7;b77#b77;,b771 after annuities1 in subparagraph 7,a71 and 7#b7 by adding at the end the following new sentence3 ,in the case of swap payments1 the source of a swap payment is determined by reference to the location of the payor44 7b7 ,tax on swap payments received by foreign corporations ,section #hha7;a7 is amended-- 7#a7 by inserting swap payments 7as identified in section #abef7;b77#b77;,b771 after annuities1 in paragraph 7#a71 and 7#b7 by adding at the end the following new sentence3 ,in the case of swap payments1 the source of a swap payment is determined by reference to the location of the payor44 ,,ii ,other measures to combat tax haven and tax shelter abuses #bja4 ,country-by-country reporting 7a7 ,country-by-,country reporting ,section #ac of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghm7 is amended by adding at the end the following new subsection3 7s7 ,disclosure of financial performance on a country-by-,country basis 7#a7 ,definitions ,in this subsection-- 7,a7 the term issuer group means the issuer1 each subsidiary of the issuer1 and each entity under the control of the issuer2 and 7,b7 the term country of operation means each country in which a member of the issuer group is incorporated1 organized1 maintains employees1 or conducts significant business activities4 7#b7 ,rules required ,the ,commission shall issue rules that require each issuer to include in an annual report filed by the issuer with the ,commission information on a country-by-country basis during the covered period1 consisting of-- 7,a7 a list of each country of operation and the name of each entity of the issuer group domiciled in each country of operation2 7,b7 the number of employees physically working in each country of operation2 7,c7 the total pre-tax gross revenues of each member of the issuer group in each country of operation2 7,d7 the total amount of payments made to governments by each member of the issuer group in each country of operation1 without exception1 including1 and set forth according to-- 7i7 total ,federal1 regional1 local1 and other tax assessed against each member of the issuer group with respect to each country of operation during the covered period2 and 7ii7 after any tax deductions1 tax credits1 tax forgiveness1 or other tax benefits or waivers1 the total amount of tax paid from the treasury of each member of the issuer group to the government of each country of operation during the covered period2 and 7,e7 such other financial information as the ,commission may determine is necessary or appropriate in the public interest or for the protection of investors4 4 7b7 ,rulemaking 7#a7 ,deadlines ,the ,securities and ,exchange ,commission 7in this section referred to as the ,commission7 shall-- 7,a7 not later than #bgj days after the date of enactment of this ,act1 issue a proposed rule to carry out this section and the amendment made by this section2 and 7,b7 not later than #a year after the date of enactment of this ,act1 issue a final rule to carry out this section and the amendment made by this section4 7#b7 ,data format ,the information required to be provided by this section shall be provided by the issuer in a format prescribed by the ,commission1 and shall be made available to the public online1 in such format as the ,commission shall prescribe4 7#c7 ,effective date ,subsection 7s7 of section #ac of the ,securities ,exchange ,act of #aicd1 as added by this section1 shall become effective #a year after the date on which the ,commission issues a final rule under this section4 #bjb4 ,penalty for failing to disclose offshore holdings 7a7 ,securities ,exchange ,act of #aicd ,section #ba7;d77#c77;,b7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghu7d77#c77;,b77 is amended by adding at the end the following3 7iv7 ,fourth tier ,notwithstanding clauses 7i71 7ii71 and 7iii71 for each violation1 the amount of the penalty shall not exceed #a1jjj1jjj for any natural person or #aj1jjj1jjj for any other person1 if-- 7,i7 such person directly or indirectly controlled any foreign entity1 including any trust1 corporation1 limited liability company1 partnership1 or foundation through which an issuer purchased1 sold1 or held equity or debt instruments2 7,,ii7 such person knowingly or recklessly failed to disclose any such holding1 purchase1 or sale by the issuer2 and 7,,iii7 the holding1 purchase1 or sale would have been otherwise subject to disclosure by the issuer or such person under this title4 4 7b7 ,securities ,act of #aicc ,section #bj7;d77#b7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #ggt7d77#b77 is amended by adding at the end the following3 7,d7 ,fourth tier ,notwithstanding subparagraphs 7,a71 7,b71 and 7,c71 for each violation1 the amount of the penalty shall not exceed #a1jjj1jjj for any natural person or #aj1jjj1jjj for any other person1 if-- 7i7 such person directly or indirectly controlled any foreign entity1 including any trust1 corporation1 limited liability company1 partnership1 or foundation through which an issuer purchased1 sold1 or held equity or debt instruments2 7ii7 such person knowingly or recklessly failed to disclose any such holding1 purchase1 or sale by the issuer2 and 7iii7 the holding1 purchase1 or sale would have been otherwise subject to disclosure by the issuer or such person under this title4 4 7c7 ,investment ,advisers ,act of #aidj ,section #bjc7;i77#b7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#c7;i77#b77 is amended by adding at the end the following3 7,d7 ,fourth tier ,notwithstanding subparagraphs 7,a71 7,b71 and 7,c71 for each violation1 the amount of the penalty shall not exceed #a1jjj1jjj for any natural person or #aj1jjj1jjj for any other person1 if-- 7i7 such person directly or indirectly controlled any foreign entity1 including any trust1 corporation1 limited liability company1 partnership1 or foundation through which an issuer purchased1 sold1 or held equity or debt instruments2 7ii7 such person knowingly or recklessly failed to disclose any such holding1 purchase1 or sale by the issuer2 and 7iii7 the holding1 purchase1 or sale would have been otherwise subject to disclosure by the issuer or such person under this title4 4 #bjc4 ,deadline for anti-money laundering rule for investment advisers 7a7 ,anti-,money laundering obligations for investment advisers ,section #ecab7;a77#b7 of title #ca1 ,united ,states ,code1 is amended-- 7#a7 in subparagraph 7,y71 by striking or at the end2 7#b7 by redesignating subparagraph 7,z7 as subparagraph 7,,bb72 and 7#c7 by inserting after subparagraph 7,y7 the following3 7,z7 an investment adviser2 4 7b7 ,rules required ,the ,secretary of the ,treasury shall-- 7#a7 in consultation with the ,chairman of the ,securities and ,exchange ,commission and the ,chairman of the ,commodity ,futures ,trading ,commission1 not later than #bgj days after the date of enactment of this ,act1 publish a proposed rule in the ,federal ,register to carry out the amendments made by this section2 and 7#b7 not later than #ahj days after the date of enactment of this ,act1 publish a final rule in the ,federal ,register on the matter described in paragraph 7#a74 7c7 ,contents ,the final rule published under this section shall require1 at a minimum1 each investment adviser 7as defined in section #bjb7;a77#aa7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#aa777 registered with the ,securities and ,exchange ,commission pursuant to section #bjc of that ,act 7#ae ,u4,s4,c4 #hj;b-#c7-- 7#a7 to submit suspicious activity reports and establish an anti-money laundering program under subsections 7g7 and 7h71 respectively1 of section #ecah of title #ca1 ,united ,states ,code2 and 7#b7 to comply with-- 7,a7 the customer identification program requirements under section #ecah7l7 of title #ca1 ,united ,states ,code2 and 7,b7 the due diligence requirements under section #ecah7;i7 of title #ca1 ,united ,states ,code4 #bjd4 ,anti-money laundering requirements for formation agents 7a7 ,anti-,money laundering obligations for formation agents ,section #ecab7;a77#b7 of title #ca1 ,united ,states ,code1 as amended by section #aac of this ,act1 is amended by inserting after subparagraph 7,z7 the following3 7,,aa7 any person engaged in the business of forming new corporations1 limited liability companies1 partnerships1 trusts1 or other legal entities2 or 4 7b7 ,deadline for anti-,money laundering rule for formation agents 7#a7 ,proposed rule ,the ,secretary of the ,treasury1 in consultation with the ,attorney ,general of the ,united ,states1 the ,secretary of ,homeland ,security1 and the ,commissioner of ,internal ,revenue1 shall-- 7,a7 not later than #abj days after the date of enactment of this ,act1 publish a proposed rule in the ,federal ,register requiring persons described in section #ecab7;a77#b77;,,aa7 of title #ca1 ,united ,states ,code1 as added by this section1 to establish anti-money laundering programs under section #ecah7;h7 of that title2 and 7,b7 not later than #bgj days after the date of enactment of this ,act1 publish a final rule in the ,federal ,register on the matter described in subparagraph 7,a74 7#b7 ,exclusions ,the rule promulgated under this subsection shall exclude from the category of persons engaged in the business of forming new corporations or other entities-- 7,a7 any government agency2 and 7,b7 any attorney or law firm that uses a paid formation agent operating within the ,united ,states to form such corporations or other entities4 #bje4 ,strengthening ,john ,doe summons proceedings 7a7 ,in general ,subsection 7f7 of section #gfji is amended to read as follows3 7f7 ,additional requirement in the case of a ,john ,doe summons 7#a7 ,general ,rule ,any summons described in subsection 7c77#a7 which does not identify the person with respect to whose liability the summons is issued may be served only after a court proceeding in which the ,secretary establishes that-- 7,a7 the summons relates to the investigation of a particular person or ascertainable group or class of persons1 7,b7 there is a reasonable basis for believing that such person or group or class of persons may fail or may have failed to comply with any provision of any internal revenue law1 and 7,c7 the information sought to be obtained from the examination of the records or testimony 7and the identity of the person or persons with respect to whose liability the summons is issued7 is not readily available from other sources4 7#b7 ,exception ,paragraph 7#a7 shall not apply to any summons which specifies that it is limited to information regarding a ,united ,states correspondent account 7as defined in section #ecah;,a7e77#a77;,b7 of title #ca1 ,united ,states ,code7 or a ,united ,states payable-through account 7as defined in section #ecah;,a7e77#a77;,c7 of such title7 of a financial institution that is held at a non-,,fatca institution 7as defined in section #ggja7;a77#ea774 7#c7 ,presumption in cases involving non-fatca institutions ,for purposes of this section1 in any case in which the particular person or ascertainable group or class of persons have financial accounts in or transactions related to a non-,,fatca institution 7as defined in section #ggja7;a77#ea771 there shall be a presumption that there is a reasonable basis for believing that such person or group or class of persons may fail or may have failed to comply with provisions of internal revenue law4 7#d7 ,project ,john ,doe summonses 7,a7 ,in general ,notwithstanding the requirements of paragraph 7#a71 the ,secretary may issue a summons described in paragraph 7#a7 if the summons-- 7i7 relates to a project which is approved under subparagraph 7,b71 7ii7 is issued to a person who is a member of the group or class established under subparagraph 7,b77i71 and 7iii7 is issued within #c years of the date on which such project was approved under subparagraph 7,b74 7,b7 ,approval of projects ,a project may only be approved under this subparagraph after a court proceeding in which the ,secretary establishes that-- 7i7 any summons issues with respect to the project will be issued to a member of an ascertainable group or class of persons1 and 7ii7 any summons issued with respect to such project will meet the requirements of paragraph 7#a74 7,c7 ,extension ,upon application of the ,secretary1 the court may extend the time for issuing such summonses under subparagraph 7,a77i7 for additional #c-year periods1 but only if the court continues to exercise oversight of such project under subparagraph 7,d74 7,d7 ,ongoing court oversight ,during any period in which the ,secretary is authorized to issue summonses in relation to a project approved under subparagraph 7,b7 7including during any extension under subparagraph 7,c771 the ,secretary shall report annually to the court on the use of such authority1 provide copies of all summonses with such report1 and comply with the court's direction with respect to the issuance of any ,john ,doe summons under such project4 4 7b7 ,jurisdiction of court 7#a7 ,in general ,paragraph 7#a7 of section #gfji7;h7 is amended by inserting after the first sentence the following new sentence3 ,any ,united ,states district court in which a member of the group or class to which a summons may be issued resides or is found shall have jurisdiction to hear and determine the approval of a project under subsection 7f77#b77;,b744 7#b7 ,conforming amendment ,the first sentence of section #gfji7;h77#a7 is amended by striking 7f7 and inserting 7f77#a74 7c7 ,effective date ,the amendments made by this section shall apply to summonses issued after the date of the enactment of this ,act4 #bjf4 ,improving enforcement of foreign financial account reporting 7a7 ,clarifying the connection of foreign financial account reporting to tax administration ,paragraph 7#d7 of section #fajc7;b7 is amended by adding at the end the following new sentence3 ,for purposes of subparagraph 7,a77i71 section #ecad of title #ca1 ,united ,states ,code1 and sections #ecba and #ecbb of such title 7as such sections pertain to such section #ecad71 shall be considered related statutes4 4 7b7 ,simplifying the calculation of foreign financial account reporting penalties ,section #ecba7;a77#e77;,d77ii7 of title #ca1 ,united ,states ,code1 is amended by striking the balance in the account at the time of the violation and inserting the highest balance in the account during the reporting period to which the violation relates4 7c7 ,clarifying the use of suspicious activity reports under the ,bank ,secrecy ,act for civil tax law enforcement ,section #ecai of title #ca1 ,united ,states ,code1 is amended by inserting the civil and criminal enforcement divisions of the ,internal ,revenue ,service1 after including4 ,,iii ,combating tax shelter promoters #cja4 ,penalty for promoting abusive tax shelters 7a7 ,penalty for promoting abusive tax shelters ,section #fgjj is amended-- 7#a7 by redesignating subsections 7b7 and 7c7 as subsections 7d7 and 7e71 respectively1 7#b7 by striking a penalty and all that follows through the period in the first sentence of subsection 7a7 and inserting a penalty determined under subsection 7b71 and 7#c7 by inserting after subsection 7a7 the following new subsections3 7b7 ,amount of penalty2 calculation of penalty2 liability for penalty 7#a7 ,amount of penalty ,the amount of the penalty imposed by subsection 7a7 shall not exceed #aej percent of the gross income derived 7or to be derived7 from such activity by the person or persons subject to such penalty4 7#b7 ,calculation of penalty ,the penalty amount determined under paragraph 7#a7 shall be calculated with respect to each instance of an activity described in subsection 7a71 each instance in which income was derived by the person or persons subject to such penalty1 and each person who participated in such an activity4 7#c7 ,liability for penalty ,if more than #a person is liable under subsection 7a7 with respect to such activity1 all such persons shall be jointly and severally liable for the penalty under such subsection4 7c7 ,penalty not deductible ,the payment of any penalty imposed under this section or the payment of any amount to settle or avoid the imposition of such penalty shall not be considered an ordinary and necessary expense in carrying on a trade or business for purposes of this title and shall not be deductible by the person who is subject to such penalty or who makes such payment4 4 7b7 ,conforming amendment ,section #fgjj7;a7 is amended by striking the last sentence4 7c7 ,effective date ,the amendments made by this section shall apply to activities after the date of the enactment of this ,act4 #cjb4 ,penalty for aiding and abetting the understatement of tax liability 7a7 ,in general ,section #fgja7;a7 is amended-- 7#a7 by inserting the tax liability or after respect to1 in paragraph 7#a71 7#b7 by inserting aid1 assistance1 procurement1 or advice with respect to such before portion both places it appears in paragraphs 7#b7 and 7#c71 and 7#c7 by inserting instance of aid1 assistance1 procurement1 or advice or each such before document in the matter following paragraph 7#c74 7b7 ,amount of penalty ,subsection 7b7 of section #fgja is amended to read as follows3 7b7 ,amount of penalty2 calculation of penalty2 liability for penalty 7#a7 ,amount of penalty ,the amount of the penalty imposed by subsection 7a7 shall not exceed #aej percent of the gross income derived 7or to be derived7 from such aid1 assistance1 procurement1 or advice provided by the person or persons subject to such penalty4 7#b7 ,calculation of penalty ,the penalty amount determined under paragraph 7#a7 shall be calculated with respect to each instance of aid1 assistance1 procurement1 or advice described in subsection 7a71 each instance in which income was derived by the person or persons subject to such penalty1 and each person who made such an understatement of the liability for tax4 7#c7 ,liability for penalty ,if more than #a person is liable under subsection 7a7 with respect to providing such aid1 assistance1 procurement1 or advice1 all such persons shall be jointly and severally liable for the penalty under such subsection4 4 7c7 ,penalty not deductible ,section #fgja is amended by adding at the end the following new subsection3 7g7 ,penalty not deductible ,the payment of any penalty imposed under this section or the payment of any amount to settle or avoid the imposition of such penalty shall not be considered an ordinary and necessary expense in carrying on a trade or business for purposes of this title and shall not be deductible by the person who is subject to such penalty or who makes such payment4 4 7d7 ,effective date ,the amendments made by this section shall apply to activities after the date of the enactment of this ,act4 #cjc4 ,prohibited fee arrangement 7a7 ,in general ,section #fgja1 as amended by this ,act1 is amended-- 7#a7 by redesignating subsections 7f7 and 7g7 as subsections 7g7 and 7h71 respectively1 7#b7 by striking subsection 7a74 in paragraphs 7#b7 and 7#c7 of subsection 7g7 7as redesignated by paragraph 7#a77 and inserting subsection 7a7 or 7f741 and 7#c7 by inserting after subsection 7e7 the following new subsection3 7f7 ,prohibited fee arrangement 7#a7 ,in general ,any person who makes an agreement for1 charges1 or collects a fee which is for services provided in connection with the internal revenue laws1 and the amount of which is calculated according to1 or is dependent upon1 a projected or actual amount of-- 7,a7 tax savings or benefits1 or 7,b7 losses which can be used to offset other taxable income1 shall pay a penalty with respect to each such fee activity in the amount determined under subsection 7b74 7#b7 ,rules ,the ,secretary may issue rules to carry out the purposes of this subsection and may provide exceptions for fee arrangements that are in the public interest4 4 7b7 ,effective date ,the amendments made by this section shall apply to fee agreements1 charges1 and collections made after the date of the enactment of this ,act4 #cjd4 ,preventing tax shelter activities by financial institutions 7a7 ,examinations 7#a7 ,development of examination techniques ,each of the ,federal banking agencies and the ,commission shall1 in consultation with the ,internal ,revenue ,service1 develop examination techniques to detect potential violations of section #fgjj or #fgja of the ,internal ,revenue ,code of #aihf1 by depository institutions1 brokers1 dealers1 and investment advisers1 as appropriate4 7#b7 ,implementation ,each of the ,federal banking agencies and the ,commission shall implement the examination techniques developed under paragraph 7#a7 with respect to each of the depository institutions1 brokers1 dealers1 or investment advisers subject to their enforcement authority4 ,such examination shall1 to the extent possible1 be combined with any examination by such agency otherwise required or authorized by ,federal law4 7b7 ,report to internal revenue service ,in any case in which an examination conducted under this section with respect to a financial institution or other entity reveals a potential violation1 such agency shall promptly notify the ,internal ,revenue ,service of such potential violation for investigation and enforcement by the ,internal ,revenue ,service1 in accordance with applicable provisions of law4 7c7 ,report to congress ,the ,federal banking agencies and the ,commission shall submit a joint written report to ,congress in #bjac on their progress in preventing violations of sections #fgjj and #fgja of the ,internal ,revenue ,code of #aihf1 by depository institutions1 brokers1 dealers1 and investment advisers1 as appropriate4 7d7 ,definitions ,for purposes of this section-- 7#a7 the terms broker1 dealer1 and investment adviser have the same meanings as in section #c of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #gh;c72 7#b7 the term ,commission means the ,securities and ,exchange ,commission2 7#c7 the term depository institution has the same meaning as in section #c7;c7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7;c772 7#d7 the term ,federal banking agencies has the same meaning as in section #c7q7 of the ,federal ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7q772 and 7#e7 the term ,secretary means the ,secretary of the ,treasury4 #cje4 ,information sharing for enforcement purposes 7a7 ,promotion of prohibited tax shelters or tax avoidance schemes ,section #fajc7;h7 is amended by adding at the end the following new paragraph3 7#g7 ,disclosure of returns and return information related to promotion of prohibited tax shelters or tax avoidance schemes 7,a7 ,written request ,upon receipt by the ,secretary of a written request which meets the requirements of subparagraph 7,b7 from the head of the ,united ,states ,securities and ,exchange ,commission1 an appropriate ,federal banking agency as defined under section #ahac7q7 of title #ab1 ,united ,states ,code1 or the ,public ,company ,accounting ,oversight ,board1 a return or return information shall be disclosed to such requestor's officers and employees who are personally and directly engaged in an investigation1 examination1 or proceeding by such requestor to evaluate1 determine1 penalize1 or deter conduct by a financial institution1 issuer1 or public accounting firm1 or associated person1 in connection with a potential or actual violation of section #fgjj 7promotion of abusive tax shelters71 #fgja 7aiding and abetting understatement of tax liability71 or activities related to promoting or facilitating inappropriate tax avoidance or tax evasion4 ,such disclosure shall be solely for use by such officers and employees in such investigation1 examination1 or proceeding4 ,in the discretion of the ,secretary1 such disclosure may take the form of the participation of ,internal ,revenue ,service employees in a joint investigation1 examination1 or proceeding with the ,securities and ,exchange ,commission1 ,federal banking agency1 or ,public ,company ,accounting ,oversight ,board4 7,b7 ,requirements ,a request meets the requirements of this subparagraph if it sets forth-- 7i7 the nature of the investigation1 examination1 or proceeding1 7ii7 the statutory authority under which such investigation1 examination1 or proceeding is being conducted1 7iii7 the name or names of the financial institution1 issuer1 or public accounting firm to which such return information relates1 7iv7 the taxable period or periods to which such return information relates1 and 7v7 the specific reason or reasons why such disclosure is1 or may be1 relevant to such investigation1 examination or proceeding4 7,c7 ,financial institution ,for the purposes of this paragraph1 the term financial institution means a depository institution1 foreign bank1 insured institution1 industrial loan company1 broker1 dealer1 investment company1 investment advisor1 or other entity subject to regulation or oversight by the ,united ,states ,securities and ,exchange ,commission or an appropriate ,federal banking agency4 4 7b7 ,financial and accounting fraud investigations ,section #fajc7;i7 is amended by adding at the end the following new paragraph3 7#i7 ,disclosure of returns and return information for use in financial and accounting fraud investigations 7,a7 ,written request ,upon receipt by the ,secretary of a written request which meets the requirements of subparagraph 7,b7 from the head of the ,united ,states ,securities and ,exchange ,commission or the ,public ,company ,accounting ,oversight ,board1 a return or return information shall be disclosed to such requestor's officers and employees who are personally and directly engaged in an investigation1 examination1 or proceeding by such requester to evaluate the accuracy of a financial statement or report1 or to determine whether to require a restatement1 penalize1 or deter conduct by an issuer1 investment company1 or public accounting firm1 or associated person1 in connection with a potential or actual violation of auditing standards or prohibitions against false or misleading statements or omissions in financial statements or reports4 ,such disclosure shall be solely for use by such officers and employees in such investigation1 examination1 or proceeding4 7,b7 ,requirements ,a request meets the requirements of this subparagraph if it sets forth-- 7i7 the nature of the investigation1 examination1 or proceeding1 7ii7 the statutory authority under which such investigation1 examination1 or proceeding is being conducted1 7iii7 the name or names of the issuer1 investment company1 or public accounting firm to which such return information relates1 7iv7 the taxable period or periods to which such return information relates1 and 7v7 the specific reason or reasons why such disclosure is1 or may be1 relevant to such investigation1 examination or proceeding4 4 7c7 ,effective date ,the amendments made by this section shall apply to disclosures and to information and document requests made after the date of the enactment of this ,act4 #cjf4 ,disclosure of information to ,congress 7a7 ,disclosure by tax return preparer 7#a7 ,in general ,subparagraph 7,b7 of section #gbaf7;b77#a7 is amended to read as follows3 7,b7 pursuant to any one of the following documents1 if clearly identified3 7i7 ,the order of any ,federal1 ,state1 or local court of record4 7ii7 ,a subpoena issued by a ,federal or ,state grand jury4 7iii7 ,an administrative order1 summons1 or subpoena which is issued in the performance of its duties by-- 7,i7 any ,federal agency1 including ,congress or any committee or subcommittee thereof1 or 7,,ii7 any ,state agency1 body1 or commission charged under the laws of the ,state or a political subdivision of the ,state with the licensing1 registration1 or regulation of tax return preparers4 4 7#b7 ,effective date ,the amendment made by this subsection shall apply to disclosures made after the date of the enactment of this ,act pursuant to any document in effect on or after such date4 7b7 ,disclosure by ,secretary ,paragraph 7#b7 of section #fajd7;a7 is amended to read as follows3 7#b7 ,inspection by ,congress 7,a7 ,in general ,upon receipt of a written request from a committee or subcommittee of ,congress1 copies of documents related to a determination by the ,secretary to grant1 deny1 revoke1 or restore an organization's exemption from taxation under section #eja shall be provided to such committee or subcommittee1 including any application1 notice of status1 or supporting information provided by such organization to the ,internal ,revenue ,service2 any letter1 analysis1 or other document produced by or for the ,internal ,revenue ,service evaluating1 determining1 explaining1 or relating to the tax exempt status of such organization 7other than returns1 unless such returns are available to the public under this section or section #fajc or #faaj72 and any communication between the ,internal ,revenue ,service and any other party relating to the tax exempt status of such organization4 7,b7 ,additional information ,section #fajc7;f7 shall apply with respect to-- 7i7 the application for exemption of any organization described in subsection 7c7 or 7d7 of section #eja which is exempt from taxation under section #eja7;a7 for any taxable year and any application referred to in subparagraph 7,b7 of subsection 7a77#a7 of this section1 and 7ii7 any other papers which are in the possession of the ,secretary and which relate to such application1 as if such papers constituted returns4 4 7c7 ,effective date ,the amendments made by this section shall apply to disclosures and to information and document requests made after the date of the enactment of this ,act4 #cjg4 ,tax opinion standards for tax practitioners ,section #ccj7;d7 of title #ca1 ,united ,states ,code1 is amended to read as follows3 7d7 ,the ,secretary of the ,treasury shall impose standards applicable to the rendering of written advice with respect to any listed transaction or any entity1 plan1 arrangement1 or other transaction which has a potential for tax avoidance or evasion4 ,such standards shall address1 but not be limited to1 the following issues3 7#a7 ,independence of the practitioner issuing such written advice from persons promoting1 marketing1 or recommending the subject of the advice4 7#b7 ,collaboration among practitioners1 or between a practitioner and other party1 which could result in such collaborating parties having a joint financial interest in the subject of the advice4 7#c7 ,avoidance of conflicts of interest which would impair auditor independence4 7#d7 ,for written advice issued by a firm1 standards for reviewing the advice and ensuring the consensus support of the firm for positions taken4 7#e7 ,reliance on reasonable factual representations by the taxpayer and other parties4 7#f7 ,appropriateness of the fees charged by the practitioner for the written advice4 7#g7 ,preventing practitioners and firms from aiding or abetting the understatement of tax liability by clients4 7#h7 ,banning the promotion of potentially abusive or illegal tax shelters4 4