,,ii #aac? ,,congress #a/ ,session ,s4 #bfh ,,9 ,,! ,,s5ate ,,( ,,! ,,unit$ ,,/ates ,febru>y #aa1 #bjac ,mr4 ,lev9 7= himself & ,mr4 ,:iteh\se7 introduc$ ! foll[+ bill2 :i* 0 read twice & ref]r$ to ! ,committee on ,f9ance ,a ,,bill ,to r$uce ! deficit & protect important programs by end+ tax loopholes4 #a4 ,%ort title2 etc 7a7 ,%ort title ,?is ,act may be cit$ z ! ,cut ,unju/ifi$ ,tax ,loopholes ,act or ,,cut ,loopholes ,act4 7b7 ,am5dm5t ( #aihf code ,except z o!rwise expressly provid$1 :5ev] 9 ?is ,act an am5dm5t or repeal is express$ 9 t]ms ( an am5dm5t to1 or repeal (1 a section or o!r provision1 ! ref]5ce %all be consid]$ to be made to a section or o!r provision ( ! ,int]nal ,rev5ue ,code ( #aihf4 7c7 ,table ( cont5ts ,! table ( cont5ts ( ?is ,act is z foll[s3 ,sec4 #a4 ,%ort title2 etc4 ,,title ,i--,end+ (f%ore tax abuses ,subtitle ,a--,det]r+ ! use ( tax hav5s = tax evasion ,sec4 #aja4 ,au?oriz+ special measures aga9/ =eign jurisdictions1 f9ancial in/itutions1 & o!rs t significantly imp$e ,unit$ ,/ates tax en=cem5t4 ,sec4 #ajb4 ,/r5g!n+ ! ,=eign ,acc\nt ,tax ,compliance ,act 7,,fatca74 ,sec4 #ajc4 ,treatm5t ( =eign corporations manag$ & controll$ 9 ! ,unit$ ,/ates z dome/ic corporations4 ,sec4 #ajd4 ,report+ ,unit$ ,/ates b5eficial own]s ( =eign own$ f9ancial acc\nts4 ,sec4 #aje4 ,swap paym5ts made f ! ,unit$ ,/ates to p]sons (f%ore4 ,subtitle ,b--,o!r measures ,to combat tax hav5 & tax %elt] abuses ,sec4 #aaa4 ,c\ntry-by-c\ntry report+4 ,sec4 #aab4 ,p5alty = fail+ to disclose (f%ore hold+s4 ,sec4 #aac4 ,deadl9e = anti-money laund]+ rule = inve/m5t advis]s4 ,sec4 #aad4 ,anti-money laund]+ requirem5ts = =mation ag5ts4 ,sec4 #aae4 ,/r5g!n+ ,john ,doe summons proce$+s4 ,sec4 #aaf4 ,improv+ en=cem5t ( =eign f9ancial acc\nt report+4 ,subtitle ,c--,end+ (f%ore tax avoidance ,sec4 #aba4 ,allocation ( exp5ses & taxes on basis ( repatriation ( =eign income4 ,sec4 #abb4 ,excess income f transf]s ( intangibles to l[-tax$ affiliates treat$ z subp>t ,f income4 ,sec4 #abc4 ,limitations on income %ift+ ?r\gh intangible prop]ty transf]s4 ,sec4 #abd4 ,limitation on e>n+s /ripp+ by expatriat$ entities4 ,sec4 #abe4 ,repeal ( *eck-!-box rules = c]ta9 =eign entities & ,,cfc look-?ru rules4 ,sec4 #abf4 ,prohibition on (f%ore loan abuse4 ,,title ,,ii--,/r5g!n+ tax en=cem5t ,subtitle ,a--,combat+ tax %elt] promotion ,sec4 #bja4 ,p5alty = promot+ abusive tax %elt]s4 ,sec4 #bjb4 ,p5alty = aid+ & abett+ ! und]/atem5t ( tax liability4 ,sec4 #bjc4 ,prohibit$ fee arrangem5t4 ,sec4 #bjd4 ,prev5t+ tax %elt] activities by f9ancial in/itutions4 ,sec4 #bje4 ,in=mation %>+ = en=cem5t purposes4 ,sec4 #bjf4 ,disclosure ( in=mation to ,congress4 ,sec4 #bjg4 ,tax op9ion /&>ds = tax practition]s4 ,subtitle ,b--,simplify tax li5 proc$ure ,sec4 #baa4 ,%ort title4 ,sec4 #bab4 ,f9d+s & purpose4 ,sec4 #bac4 ,national tax li5 fil+ sy/em4 ,,title ,,iii--,end+ excessive corporate tax d$uctions = /ock options ,sec4 #cja4 ,consi/5t treatm5t ( /ock options by corporations4 ,sec4 #cjb4 ,application ( executive pay d$uction limit4 ,,title ,,iv--,clos+ ! d]ivatives bl5d$ rate loophole ,sec4 #dja4 ,%ort title4 ,sec4 #djb4 ,modifications to treatm5t ( section #abef contracts4 ,sec4 #djc4 ,modifications to treatm5t ( deal]s 9 securities & commodities4 ,,title ,v--,end+ ! t> s&s oil spill loophole ,sec4 #eja4 ,%ort title4 ,sec4 #ejb4 ,requirem5ts = contribution to ! ,oil ,spill ,liability ,tru/ ,fund4 ,sec4 #ejc4 ,ext5sion ( ,oil ,spill ,liability ,tru/ ,fund f9anc+ rate4 ,sec4 #ejd4 ,te*nical am5dm5t4 ,,title ,,vi--,end+ ! c>ri$ int]e/ loophole ,sec4 #fja4 ,%ort title2 etc4 ,sec4 #fjb4 ,p>tn]%ip int]e/s transf]r$ 9 connection ) p]=mance ( s]vices4 ,sec4 #fjc4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips4 ,i ,end+ (f%ore tax abuses ,a ,det]r+ ! use ( tax hav5s = tax evasion #aja4 ,au?oriz+ special measures aga9/ =eign jurisdictions1 f9ancial in/itutions1 & o!rs t significantly imp$e ,unit$ ,/ates tax en=cem5t ,section #ecah;,a ( title #ca1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 by /rik+ ! section head+ & ins]t+ ! foll[+3 #ecah;,a4 ,special measures = jurisdictions1 f9ancial in/itutions1 or int]national transactions t are ( prim>y money laund]+ conc]n or significantly imp$e ,unit$ ,/ates tax en=cem5t 2 7#b7 9 subsection 7a71 by /rik+ ! subsection head+ & ins]t+ ! foll[+3 7a7 ,special measures ,to c\nt] money laund]+ & ef=ts to significantly imp$e ,unit$ ,/ates tax en=cem5t 2 7#c7 9 subsection 7c7-- 7,a7 by /rik+ ! subsection head+ & ins]t+ ! foll[+3 7c7 ,consultations & in=mation ,to be consid]$ 9 f9d+ jurisdictions1 in/itutions1 types ( acc\nts1 or transactions ,to be ( prim>y money laund]+ conc]n or ,to be significantly imp$+ ,unit$ ,/ates tax en=cem5t 2 & 7,b7 by ins]t+ at ! end ( p>agraph 7#b7 !re( ! foll[+ new subp>agraph3 7,c7 ,o!r consid]ations ,! fact t a jurisdiction or f9ancial in/itution is coop]at+ ) ! ,unit$ ,/ates on implem5t+ ! requirem5ts specifi$ 9 *apt] #d ( ! ,int]nal ,rev5ue ,code ( #aihf may be favorably consid]$ 9 evaluat+ :e!r su* jurisdiction or f9ancial in/itution is significantly imp$+ ,unit$ ,/ates tax en=cem5t4 2 7#d7 9 subsection 7a77#a71 by ins]t+ or is significantly imp$+ ,unit$ ,/ates tax en=cem5t aft] prim>y money laund]+ conc]n2 7#e7 9 subsection 7a77#d7-- 7,a7 9 subp>agraph 7,a7-- 7i7 by ins]t+ 9 matt]s involv+ money laund]+1 be=e %all consult2 & 7ii7 by /rik+ & at ! end2 7,b7 by r$esignat+ subp>agraph 7,b7 z subp>agraph 7,c72 & 7,c7 by ins]t+ aft] subp>agraph 7,a7 ! foll[+3 7,b7 9 matt]s involv+ ,unit$ ,/ates tax en=cem5t1 %all consult ) ! ,commission] ( ! ,int]nal ,rev5ue1 ! ,secret>y ( ,/ate1 ! ,attorney ,g5]al ( ! ,unit$ ,/ates1 & 9 ! sole discretion ( ! ,secret>y1 su* o!r ag5cies & int]e/$ p>ties z ! ,secret>y may f9d to be appropriate2 & 2 7#f7 9 ea* ( p>agraphs 7#a77;,a71 7#b71 7#c71 & 7#d7 ( subsection 7b71 by ins]t+ or to be significantly imp$+ ,unit$ ,/ates tax en=cem5t aft] prim>y money laund]+ conc]n ea* place t t]m appe>s2 7#g7 9 subsection 7b71 by /rik+ p>agraph 7#e7 & ins]t+ ! foll[+3 7#e7 ,prohibitions or conditions on op5+ or ma9ta9+ c]ta9 correspond5t or payable-?r\gh acc\nts or au?oriz+ c]ta9 paym5t c>ds ,if ! ,secret>y f9ds a jurisdiction outside ( ! ,unit$ ,/ates1 #a or m f9ancial in/itutions op]at+ outside ( ! ,unit$ ,/ates1 or #a or m classes ( transactions )9 or involv+ a jurisdiction outside ( ! ,unit$ ,/ates to be ( prim>y money laund]+ conc]n or to be significantly imp$+ ,unit$ ,/ates tax en=cem5t1 ! ,secret>y1 9 consultation ) ! ,secret>y ( ,/ate1 ! ,attorney ,g5]al ( ! ,unit$ ,/ates1 & ! ,*airman ( ! ,bo>d ( ,gov]nors ( ! ,f$]al ,res]ve ,sy/em1 may prohibit1 or impose conditions ^u-- 7,a7 ! op5+ or ma9ta9+ 9 ! ,unit$ ,/ates ( a correspond5t acc\nt or payable-?r\gh acc\nt2 or 7,b7 ! au?orization1 approval1 or use 9 ! ,unit$ ,/ates ( a cr$it c>d1 *>ge c>d1 debit c>d1 or simil> cr$it or debit f9ancial in/rum5t by any dome/ic f9ancial in/itution1 f9ancial ag5cy1 or cr$it c>d company or association1 = or on behalf ( a =eign bank+ in/itution1 if su* correspond5t acc\nt1 payable-?r\gh acc\nt1 cr$it c>d1 *>ge c>d1 debit c>d1 or simil> cr$it or debit f9ancial in/rum5t1 involves any su* jurisdiction or in/itution1 or if any su* transaction may be conduct$ ?r\gh su* correspond5t acc\nt1 payable-?r\gh acc\nt1 cr$it c>d1 *>ge c>d1 debit c>d1 or simil> cr$it or debit f9ancial in/rum5t4 2 & 7#h7 9 subsection 7c77#a71 by ins]t+ or is significantly imp$+ ,unit$ ,/ates tax en=cem5t aft] prim>y money laund]+ conc]n2 7#i7 9 subsection 7c77#b77;,a7-- 7,a7 9 clause 7ii71 by /rik+ bank secrecy or special regulatory advantages & ins]t+ bank1 tax1 corporate1 tru/1 or f9ancial secrecy or regulatory advantages2 7,b7 9 clause 7iii71 by /rik+ sup]visory & c\nt]-money & ins]t+ sup]visory1 int]national tax en=cem5t1 & c\nt]-money2 7,c7 9 clause 7v71 by /rik+ bank+ or secrecy & ins]t+ bank+1 tax1 or secrecy2 & 7,d7 9 clause 7vi71 by ins]t+ 1 tax treaty1 or tax in=mation ex*ange agreem5t aft] treaty2 7#aj7 9 subsection 7c77#b77;,b7-- 7,a7 9 clause 7i71 by ins]t+ or tax evasion aft] money laund]+2 & 7,b7 9 clause 7iii71 by ins]t+ 1 tax evasion1 aft] money laund]+2 & 7#aa7 9 subsection 7d71 by ins]t+ involv+ money laund]+1 & %all notify1 9 writ+1 ! ,committee on ,f9ance ( ! ,s5ate & ! ,committee on ,ways & ,means ( ! ,h\se ( ,repres5tatives ( any su* action involv+ ,unit$ ,/ates tax en=cem5t aft] su* action4 #ajb4 ,/r5g!n+ ! ,=eign ,acc\nt ,tax ,compliance ,act 7,,fatca7 7a7 ,report+ activities ) respect to passive =eign inve/m5t companies ,section #abih7;f7 is am5d$ by ins]t+ 1 or :o directly or indirectly =ms1 transf]s assets to1 is a b5efici>y (1 has a b5eficial int]e/ 91 or receives money or prop]ty or ! use !re( f1 aft] %>ehold] (4 7b7 ,)holdable paym5ts to =eign f9ancial in/itutions ,section #adga7;d7 is am5d$-- 7#a7 by ins]t+ or transaction aft] any depository 9 p>agraph 7#b77;,a71 & 7#b7 by /rik+ or any int]e/ & all t foll[s 9 p>agraph 7#e77;,c7 & ins]t+ d]ivatives1 or any int]e/ 7includ+ a futures or =w>d contract1 swap1 or option7 9 su* securities1 p>tn]%ip int]e/s1 commodities1 or d]ivatives44 7c7 ,)holdable paym5ts to o!r =eign f9ancial in/itutions ,section #adgb is am5d$-- 7#a7 by ins]t+ z a result ( any cu/om] id5tification1 anti-money laund]+1 anti-corruption1 or simil> obligation to id5tify acc\nt hold]s1 aft] reason to "k1 9 subsection 7b77#b71 & 7#b7 by ins]t+ z pos+ a l[ risk ( tax evasion aft] ?is subsection 9 subsection 7c77#a77;,g74 7d7 ,def9itions ,clauses 7i7 & 7ii7 ( section #adgc7b77;,a7 are ea* am5d$ by ins]t+ or z a b5eficial own] aft] indirectly4 7e7 ,special rules ,section #adgd7;c7 is am5d$-- 7#a7 by ins]t+ 1 except t in=mation provid$ "u sections #adga7;c7 or #adgb7;b7 may be disclos$ to any ,f$]al law en=cem5t ag5cy1 ^u reque/ or ^u ! initiation ( ! ,secret>y1 to inve/igate or address a possible violation ( ,unit$ ,/ates law aft] %all apply 9 p>agraph 7#a71 & 7#b7 by ins]t+ 1 or has _h an agreem5t t]m9at$ "u su* section1 aft] section #adga7;b7 9 p>agraph 7#b74 7f7 ,in=mation ) respect to =eign f9ancial assets ,section #fjch;,d7a7 is am5d$ by ins]t+ own]%ip or b5eficial own]%ip aft] holds any4 7g7 ,e/abli%+ presumptions = entities & transactions involv+ non-,,fatca in/itutions 7#a7 ,presumptions = tax purposes 7,a7 ,9 g5]al ,*apt] #gf is am5d$ by ins]t+ aft] section #gdia ! foll[+ new sub*apt]3 ,f ,presumptions = c]ta9 legal proce$+s ,sec4 #gdib4 ,presumptions p]ta9+ to entities & transactions involv+ non-,,fatca in/itutions4 #gdib4 ,presumptions p]ta9+ to entities & transactions involv+ non-,,fatca in/itutions 7a7 ,control ,= purposes ( any ,unit$ ,/ates civil judicial or adm9i/rative proce$+ to det]m9e or collect tax1 !re %all be a rebuttable presumption t a ,unit$ ,/ates p]son 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket7 :o1 directly or indirectly1 =m$1 transf]r$ assets to1 0 a b5efici>y (1 _h a b5eficial int]e/ 91 or receiv$ money or prop]ty or ! use !re( f an entity1 includ+ a tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket71 t holds an acc\nt1 or 9 any o!r mann] has assets1 9 a non-,,fatca in/itution1 ex]cis$ control ov] su* entity4 ,! presumption ( control creat$ by ?is subsection %all n be appli$ to prev5t ! ,secret>y f det]m9+ or argu+ ! abs5ce ( control4 7b7 ,transf]s ( income ,= purposes ( any ,unit$ ,/ates civil judicial or adm9i/rative proce$+ to det]m9e or collect tax1 !re %all be a rebuttable presumption t any am\nt or ?+ ( value receiv$ by a ,unit$ ,/ates p]son 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket7 directly or indirectly f an acc\nt or f an entity 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket7 t holds an acc\nt1 or 9 any o!r mann] has assets1 9 a non-,,fatca in/itution1 con/itutes income ( su* p]son taxable 9 ! ye> ( receipt2 & any am\nt or ?+ ( value paid or transf]r$ by or on behalf ( a ,unit$ ,/ates p]son 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket7 directly or indirectly to an acc\nt1 or entity 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket7 t holds an acc\nt1 or 9 any o!r mann] has assets1 9 a non-,,fatca in/itution1 repres5ts previ\sly unreport$ income ( su* p]son taxable 9 ! ye> ( ! transf]4 7c7 ,rebutt+ ! presumptions ,! presumptions e/abli%$ 9 ?is section may be rebutt$ only by cle> & conv9c+ evid5ce1 includ+ detail$ docum5t>y1 te/imonial1 & transactional evid5ce1 e/abli%+ t-- 7#a7 9 subsection 7a71 su* taxpay] ex]cis$ no control1 directly or indirectly1 ov] acc\nt or entity at ! "t 9 "q1 & 7#b7 9 subsection 7b71 su* am\nts or ?+s ( value did n repres5t income relat$ to su* ,unit$ ,/ates p]son4 ,any c\rt hav+ jurisdiction ( a civil proce$+ 9 :i* control ( su* an (f%ore acc\nt or (f%ore entity or ! income "* ( su* receipts or am\nts transf]r$ is an issue %all prohibit ! introduction by ! taxpay] ( any =eign bas$ docum5t t is n au!nticat$ 9 op5 c\rt by a p]son ) k ( su* docum5t1 or any o!r evid5ce suppli$ by a p]son outside ! jurisdiction ( a ,unit$ ,/ates c\rt1 unless su* p]son appe>s be=e ! c\rt4 4 7,b7 ,! table ( sub*apt]s = *apt] #gf is am5d$ by ins]t+ aft] ! item relat+ to sub*apt] ,e ! foll[+ new item3 ,sub*apt] ,f--,presumptions = c]ta9 legal proce$+s 4 7#b7 ,def9ition ( non-fatca in/itution ,section #ggja7;a7 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#ea7 ,non-fatca in/itution ,! t]m non-,,fatca in/itution means any f9ancial in/itution t does n meet ! report+ requirem5ts ( section #adga7;b74 4 7#c7 ,presumptions = securities law purposes ,section #ba ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #ghu7 is am5d$ by add+ at ! end ! foll[+ new subsection3 7j7 ,presumptions p]ta9+ to control & b5eficial own]%ip 7#a7 ,control ,= purposes ( any civil judicial or adm9i/rative proce$+ "u ?is title1 !re %all be a rebuttable presumption t a ,unit$ ,/ates p]son 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket7 :o1 directly or indirectly1 =m$1 transf]r$ assets to1 0 a b5efici>y (1 _h a b5eficial int]e/ 91 or receiv$ money or prop]ty or ! use !re( f an entity1 includ+ a tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket71 t holds an acc\nt1 or 9 any o!r mann] has assets1 9 a non-,,fatca in/itution 7z def9$ 9 section #ggja7;a77#ea7 ( ! ,int]nal ,rev5ue ,code ( #aihf71 ex]cis$ control ov] su* entity4 ,! presumption ( control creat$ by ?is p>agraph %all n be appli$ to prev5t ! ,commission f det]m9+ or argu+ ! abs5ce ( control4 7#b7 ,b5eficial own]%ip ,= purposes ( any civil judicial or adm9i/rative proce$+ "u ?is title1 !re %all be a rebuttable presumption t securities t are nom9ally own$ by an entity1 includ+ a tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket71 & t are held 9 a non-,,fatca in/itution 7z s def9$71 are b5eficially own$ by any ,unit$ ,/ates p]son 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket7 :o directly or indirectly ex]cis$ control ov] su* entity4 ,! presumption ( b5eficial own]%ip creat$ by ?is p>agraph %all n be appli$ to prev5t ! ,commission f det]m9+ or argu+ ! abs5ce ( b5eficial own]%ip4 4 7#d7 ,presumption = report+ purposes relat+ to =eign f9ancial acc\nts ,section #ecad ( title #ca1 ,unit$ ,/ates ,code1 is am5d$ by add+ at ! end ! foll[+ new subsection3 7d7 ,rebuttable presumption ,= purposes ( ?is section1 !re %all be a rebuttable presumption t any acc\nt ) a non-,,fatca in/itution 7z def9$ 9 section #ggja7;a77#ea7 ( ! ,int]nal ,rev5ue ,code ( #aihf7 conta9s funds 9 an am\nt t is at lea/ suffici5t to require a report prescrib$ by regulations "u ?is section4 4 7#e7 ,regulatory au?ority ,n lat] ?an #ahj days aft] ! date ( enactm5t ( ?is ,act1 ! ,secret>y ( ! ,treasury & ! ,*airman ( ! ,securities & ,ex*ange ,commission %all ea* adopt regulations or o!r guidance necess>y to implem5t ! am5dm5ts made by ?is subsection4 ,! ,secret>y & ! ,*airman may1 by regulation or guidance1 provide t ! presumption ( control %all n ext5d to p>ticul> classes ( transactions1 su* z corporate reorganizations or transactions bel[ a specifi$ doll> ?re%old1 if ei!r det]m9es t apply+ su* am5dm5ts to su* transactions is n necess>y to c>ry out ! purposes ( su* am5dm5ts4 7h7 ,effective date ,! am5dm5ts made by ?is section %all take effect on ! date :i* is #ahj days aft] ! date ( enactm5t ( ?is ,act1 :e!r or n regulations are issu$ "u subsection 7g77#e74 #ajc4 ,treatm5t ( =eign corporations manag$ & controll$ 9 ! ,unit$ ,/ates z dome/ic corporations 7a7 ,9 g5]al ,section #ggja is am5d$ by r$esignat+ subsection 7p7 z subsection 7q7 & by ins]t+ aft] subsection 7o7 ! foll[+ new subsection3 7p7 ,c]ta9 corporations manag$ & controll$ 9 ! ,unit$ ,/ates treat$ z dome/ic = income tax 7#a7 ,9 g5]al ,not)/&+ subsection 7a77#d71 9 ! case ( a corporation describ$ 9 p>agraph 7#b7 if-- 7,a7 ! corporation w\ld n o!rwise be treat$ z a dome/ic corporation = purposes ( ?is title1 b 7,b7 ! managem5t & control ( ! corporation occurs1 directly or indirectly1 prim>ily )9 ! ,unit$ ,/ates1 !n1 solely = purposes ( *apt] #a 7& any o!r provision ( ?is title relat+ to *apt] #a71 ! corporation %all be treat$ z a dome/ic corporation4 7#b7 ,corporation describ$ 7,a7 ,9 g5]al ,a corporation is describ$ 9 ?is p>agraph if-- 7i7 ! /ock ( su* corporation is regul>ly trad$ on an e/abli%$ securities m>ket1 or 7ii7 ! aggregate gross assets ( su* corporation 7or any pr$ecessor !re(71 includ+ assets "u managem5t = inve/ors1 :e!r held directly or indirectly1 at any "t dur+ ! taxable ye> or any prec$+ taxable ye> is #ej1jjj1jjj or m4 7,b7 ,g5]al exception ,a corporation %all n be treat$ z describ$ 9 ?is p>agraph if-- 7i7 su* corporation 0 treat$ z a corporation describ$ 9 ?is p>agraph 9 a prec$+ taxable ye>1 7ii7 su* corporation-- 7,i7 is n regul>ly trad$ on an e/abli%$ securities m>ket1 & 7,,ii7 has1 & is reasonably expect$ to cont9ue to h1 aggregate gross assets 7includ+ assets "u managem5t = inve/ors1 :e!r held directly or indirectly7 ( less ?an #ej1jjj1jjj1 & 7iii7 ! ,secret>y grants a waiv] to su* corporation "u ?is subp>agraph4 7,c7 ,exception f gross assets te/ ,subp>agraph 7,a77ii7 %all n apply to a corporation :i* is a controll$ =eign corporation 7z def9$ 9 section #ieg7 & :i* is a memb] ( an affiliat$ gr\p 7z def9$ section #aejd1 b det]m9$ )\t reg>d to section #aejd7;b77#c77 ! common p>5t ( :i*-- 7i7 is a dome/ic corporation 7det]m9$ )\t reg>d to ?is subsection71 & 7ii7 has sub/antial assets 7o!r ?an ca% & ca% equival5ts & o!r ?an /ock ( =eign subsidi>ies7 held = use 9 ! active conduct ( a trade or bus9ess 9 ! ,unit$ ,/ates4 7#c7 ,managem5t & control 7,a7 ,9 g5]al ,! ,secret>y %all prescribe regulations = purposes ( det]m9+ cases 9 :i* ! managem5t & control ( a corporation is to be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates4 7,b7 ,executive (fic]s & s5ior managem5t ,su* regulations %all provide t-- 7i7 ! managem5t & control ( a corporation %all be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates if sub/antially all ( ! executive (fic]s & s5ior managem5t ( ! corporation :o ex]cise day-to-day responsibility = mak+ decisions involv+ /rategic1 f9ancial1 & op]ational policies ( ! corporation are locat$ prim>ily )9 ! ,unit$ ,/ates1 & 7ii7 individuals :o are n executive (fic]s & s5ior managem5t ( ! corporation 7includ+ individuals :o are (fic]s or employees ( o!r corporations 9 ! same *a9 ( corporations z ! corporation7 %all be treat$ z executive (fic]s & s5ior managem5t if su* individuals ex]cise ! day-to-day responsibilities ( ! corporation describ$ 9 clause 7i74 7,c7 ,corporations prim>ily hold+ inve/m5t assets ,su* regulations %all also provide t ! managem5t & control ( a corporation %all be treat$ z occurr+ prim>ily )9 ! ,unit$ ,/ates if-- 7i7 ! assets ( su* corporation 7directly or indirectly7 consi/ prim>ily ( assets be+ manag$ on behalf ( inve/ors1 & 7ii7 decisions ab\t h[ to inve/ ! assets are made 9 ! ,unit$ ,/ates4 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ on or aft] ! date :i* is #b ye>s aft] ! date ( ! enactm5t ( ?is ,act1 :e!r or n regulations are issu$ "u section #ggja7p77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 z add$ by ?is section4 #ajd4 ,report+ ,unit$ ,/ates b5eficial own]s ( =eign own$ f9ancial acc\nts 7a7 ,9 g5]al ,subp>t ,b ( "p ,,iii ( sub*apt] ,a ( *apt] #fa is am5d$ by ins]t+ aft] section #fjde;,b ! foll[+ new sections3 #fjde;,c4 ,returns reg>d+ ,unit$ ,/ates b5eficial own]s ( f9ancial acc\nts locat$ 9 ! ,unit$ ,/ates & held 9 ! "n ( a =eign entity 7a7 ,requirem5t ( return ,if-- 7#a7 any )hold+ ag5t "u sections #adda & #addb has ! control1 receipt1 cu/ody1 disposal1 or paym5t ( any am\nt con/itut+ gross income f s\rces )9 ! ,unit$ ,/ates ( any =eign entity1 includ+ a tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket71 & 7#b7 su* )hold+ ag5t det]m9es = purposes ( titles #ad1 #ah1 or #ca ( ! ,unit$ ,/ates ,code t a ,unit$ ,/ates p]son has any b5eficial int]e/ 9 ! =eign entity or 9 ! acc\nt 9 su* entity's "n 7h]eaft] 9 ?is section ref]r$ to z ,unit$ ,/ates b5eficial own]71 !n ! )hold+ ag5t %all make a return accord+ to ! =ms or regulations prescrib$ by ! ,secret>y4 7b7 ,requir$ in=mation ,= purposes ( subsection 7a7 ! in=mation requir$ to be includ$ on ! return %all include-- 7#a7 ! "n1 address1 &1 if kn[n1 ! taxpay] id5tification numb] ( ! ,unit$ ,/ates b5eficial own]1 7#b7 ! kn[n facts p]ta9+ to ! relation%ip ( su* ,unit$ ,/ates b5eficial own] to ! =eign entity & ! acc\nt1 7#c7 ! gross am\nt ( income f s\rces )9 ! ,unit$ ,/ates 7includ+ gross proce$s f brok]age transactions71 & 7#d7 su* o!r in=mation z ! ,secret>y may by =ms or regulations provide4 7c7 ,/atem5ts ,to ,be furni%$ to b5eficial own]s ) respect to :om in=mation is requir$ ,to ,be report$ ,a )hold+ ag5t requir$ to make a return "u subsection 7a7 %all furni% to ea* ,unit$ ,/ates b5eficial own] ^: "n is requir$ to be set =? 9 su* return a /atem5t %[+-- 7#a7 ! "n1 address1 & telephone numb] ( ! in=mation contact ( ! p]son requir$ to make su* return1 & 7#b7 ! in=mation requir$ to be %[n on su* return ) respect to su* ,unit$ ,/ates b5eficial own]4 ,! writt5 /atem5t requir$ "u ! prec$+ s5t5ce %all be furni%$ to ! ,unit$ ,/ates b5eficial own] on or be=e ,janu>y #ca ( ! ye> foll[+ ! cal5d> ye> = :i* ! return "u subsection 7a7 0 requir$ to be made4 ,9 ! ev5t ! p]son fil+ su* return does n h a curr5t address = ! ,unit$ ,/ates b5eficial own]1 su* writt5 /atem5t may be mail$ to ! address ( ! =eign entity4 #fjde;,d4 ,returns by f9ancial in/itutions reg>d+ e/abli%m5t ( acc\nts 9 non-,,fatca in/itutions 7a7 ,requirem5t ( return ,any f9ancial in/itution directly or indirectly op5+ a bank1 brok]age1 or o!r f9ancial acc\nt = or on behalf ( an (f%ore entity1 includ+ a tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation 7o!r ?an an entity ) %>es regul>ly trad$ on an e/abli%$ securities m>ket71 9 a non-,,fatca in/itution 7z def9$ 9 section #ggja7;a77#ea77 at ! direction (1 on behalf (1 or = ! b5efit ( a ,unit$ ,/ates p]son %all make a return accord+ to ! =ms or regulations prescrib$ by ! ,secret>y4 7b7 ,requir$ in=mation ,= purposes ( subsection 7a7 ! in=mation requir$ to be includ$ on ! return %all include-- 7#a7 ! "n1 address1 & taxpay] id5tification numb] ( su* ,unit$ ,/ates p]son1 7#b7 ! "n & address ( ! f9ancial in/itution at :i* a f9ancial acc\nt is op5$1 ! type ( acc\nt1 ! acc\nt numb]1 ! "n "u :i* ! acc\nt 0 op5$1 & ! am\nt ( ! initial deposit1 7#c7 if ! acc\nt is held 9 ! "n ( an entity1 ! "n & address ( su* entity1 ! type ( entity1 & ! "n & address ( any company =mation ag5t or o!r pr(essional employ$ to =m or acquire ! entity1 & 7#d7 su* o!r in=mation z ! ,secret>y may by =ms or regulations provide4 7c7 ,/atem5ts ,to be furni%$ to ,unit$ ,/ates p]sons ) respect to :om in=mation is requir$ ,to be report$ ,a f9ancial in/itution requir$ to make a return "u subsection 7a7 %all furni% to ea* ,unit$ ,/ates p]son ^: "n is requir$ to be set =? 9 su* return a /atem5t %[+-- 7#a7 ! "n1 address1 & telephone numb] ( ! in=mation contact ( ! p]son requir$ to make su* return1 & 7#b7 ! in=mation requir$ to be %[n on su* return ) respect to su* ,unit$ ,/ates p]son4 ,! writt5 /atem5t requir$ "u ! prec$+ s5t5ce %all be furni%$ to su* ,unit$ ,/ates p]son on or be=e ,janu>y #ca ( ! ye> foll[+ ! cal5d> ye> = :i* ! return "u subsection 7a7 0 requir$ to be made4 7d7 ,exemption ,! ,secret>y may by regulations exempt any class ( ,unit$ ,/ates p]sons or any class ( acc\nts or entities f ! requirem5ts ( ?is section if ! ,secret>y det]m9es t apply+ ?is section to su* p]sons1 acc\nts1 or entities is n necess>y to c>ry out ! purposes ( ?is section4 4 7b7 ,p5alties 7#a7 ,returns ,section #fgbd7;d77#a77;,b7 is am5d$ by /rik+ or at ! end ( clause 7xxiv71 by /rik+ & at ! end ( clause 7xxv71 & by add+ aft] clause 7xxv7 ! foll[+ new clauses3 7xxvi7 section #fjde;,c7a7 7relat+ to returns reg>d+ ,unit$ ,/ates b5eficial own]s ( f9ancial acc\nts locat$ 9 ! ,unit$ ,/ates & held 9 ! "n ( a =eign entity71 or 7xxvii7 section #fjde;,d7a7 7relat+ to returns by f9ancial in/itutions reg>d+ e/abli%m5t ( acc\nts at non-,,fatca in/itutions71 & 4 7#b7 ,payee /atem5ts ,section #fgbd7;d77#b7 is am5d$ by /rik+ or at ! end ( subp>agraph 7,,gg71 by /rik+ ! p]iod at ! end ( subp>agraph 7,,hh71 & by ins]t+ aft] subp>agraph 7,,hh7 ! foll[+ new subp>agraphs3 7,,ii7 section #fjde;,c7c7 7relat+ to returns reg>d+ ,unit$ ,/ates b5eficial own]s ( f9ancial acc\nts locat$ 9 ! ,unit$ ,/ates & held 9 ! "n ( a =eign entity71 7,,jj7 section #fjde;,d7c7 7relat+ to returns by f9ancial in/itutions reg>d+ e/abli%m5t ( acc\nts at non-,,fatca in/itutions74 4 7c7 ,cl]ical am5dm5t ,! table ( sections = subp>t ,b ( "p ,,iii ( sub*apt] ,a ( *apt] #fa is am5d$ by ins]t+ aft] ! item relat+ to section #fjde;,b ! foll[+ new items3 ,sec4 #fjde;,c4 ,returns reg>d+ ,unit$ ,/ates b5eficial own]s ( f9ancial acc\nts locat$ 9 ! ,unit$ ,/ates & held 9 ! "n ( a =eign entity4 ,sec4 #fjde;,d4 ,returns by f9ancial in/itutions reg>d+ e/abli%m5t ( acc\nts at non-,,fatca in/itutions4 4 7d7 ,additional p5alties 7#a7 ,additional p5alties on banks ,section #ebci7;b77#a7 ( ! ,revis$ ,/atutes ( ! ,unit$ ,/ates 7#ab ,u4,s4,c4 #ic7;b77#a77 is am5d$ by ins]t+ or any ( ! provisions ( section #fjde;,d ( ! ,int]nal ,rev5ue ,code ( #aihf1 aft] any regulation issu$ pursuant to14 7#b7 ,additional p5alties on securities firms ,section #ba7;d77#c77;,a7 ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #ghu7d77#c77;,a77 is am5d$ by ins]t+ any ( ! provisions ( section #fjde;,d ( ! ,int]nal ,rev5ue ,code ( #aihf1 aft] ! rules or regulations !reund]14 7e7 ,regulatory au?ority & effective date 7#a7 ,regulatory ,au?ority ,n lat] ?an #ahj days aft] ! date ( ! enactm5t ( ?is ,act1 ! ,secret>y ( ! ,treasury %all adopt regulations1 =ms1 or o!r guidance necess>y to implem5t ?is section4 7#b7 ,effective ,date ,section #fjde;,c ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by ?is section7 & ! am5dm5t made by subsection 7d77#a7 %all take effect ) respect to am\nts paid into =eign own$ acc\nts locat$ 9 ! ,unit$ ,/ates aft] ,decemb] #ca ( ! ye> ( ! date ( ! enactm5t ( ?is ,act4 ,section #fjde;,d ( su* ,code 7z s add$7 & ! am5dm5t made by subsection 7d77#b7 %all take effect ) respect to acc\nts op5$ aft] ,decemb] #ca ( ! ye> ( ! date ( ! enactm5t ( ?is ,act4 #aje4 ,swap paym5ts made f ! ,unit$ ,/ates to p]sons (f%ore 7a7 ,tax on swap paym5ts receiv$ by =eign p]sons ,section #hga7;a77#a7 is am5d$-- 7#a7 by ins]t+ swap paym5ts 7z id5tifi$ 9 section #abef7;b77#b77;,b771 aft] annuities1 9 subp>agraph 7,a71 & 7#b7 by add+ at ! end ! foll[+ new s5t5ce3 ,9 ! case ( swap paym5ts1 ! s\rce ( a swap paym5t is det]m9$ by ref]5ce to ! location ( ! payor44 7b7 ,tax on swap paym5ts receiv$ by =eign corporations ,section #hha7;a7 is am5d$-- 7#a7 by ins]t+ swap paym5ts 7z id5tifi$ 9 section #abef7;b77#b77;,b771 aft] annuities1 9 p>agraph 7#a71 & 7#b7 by add+ at ! end ! foll[+ new s5t5ce3 ,9 ! case ( swap paym5ts1 ! s\rce ( a swap paym5t is det]m9$ by ref]5ce to ! location ( ! payor44 ,b ,o!r measures ,to combat tax hav5 & tax %elt] abuses #aaa4 ,c\ntry-by-c\ntry report+ 7a7 ,c\ntry-by-,c\ntry report+ ,section #ac ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #ghm7 is am5d$ by add+ at ! end ! foll[+ new subsection3 7s7 ,disclosure ( f9ancial p]=mance on a c\ntry-by-,c\ntry basis 7#a7 ,def9itions ,9 ?is subsection-- 7,a7 ! t]m issu] gr\p means ! issu]1 ea* subsidi>y ( ! issu]1 & ea* entity "u ! control ( ! issu]2 & 7,b7 ! t]m c\ntry ( op]ation means ea* c\ntry 9 :i* a memb] ( ! issu] gr\p is incorporat$1 organiz$1 ma9ta9s employees1 or conducts significant bus9ess activities4 7#b7 ,rules requir$ ,! ,commission %all issue rules t require ea* issu] to include 9 an annual report fil$ by ! issu] ) ! ,commission in=mation on a c\ntry-by-c\ntry basis dur+ ! cov]$ p]iod1 consi/+ (-- 7,a7 a li/ ( ea* c\ntry ( op]ation & ! "n ( ea* entity ( ! issu] gr\p domicil$ 9 ea* c\ntry ( op]ation2 7,b7 ! numb] ( employees physically work+ 9 ea* c\ntry ( op]ation2 7,c7 ! total pre-tax gross rev5ues ( ea* memb] ( ! issu] gr\p 9 ea* c\ntry ( op]ation2 7,d7 ! total am\nt ( paym5ts made to gov]nm5ts by ea* memb] ( ! issu] gr\p 9 ea* c\ntry ( op]ation1 )\t exception1 includ+1 & set =? accord+ to-- 7i7 total ,f$]al1 regional1 local1 & o!r tax assess$ aga9/ ea* memb] ( ! issu] gr\p ) respect to ea* c\ntry ( op]ation dur+ ! cov]$ p]iod2 & 7ii7 aft] any tax d$uctions1 tax cr$its1 tax =giv5ess1 or o!r tax b5efits or waiv]s1 ! total am\nt ( tax paid f ! treasury ( ea* memb] ( ! issu] gr\p to ! gov]nm5t ( ea* c\ntry ( op]ation dur+ ! cov]$ p]iod2 & 7,e7 su* o!r f9ancial in=mation z ! ,commission may det]m9e is necess>y or appropriate 9 ! public int]e/ or = ! protection ( inve/ors4 4 7b7 ,rulemak+ 7#a7 ,deadl9es ,! ,securities & ,ex*ange ,commission 79 ?is section ref]r$ to z ! ,commission7 %all-- 7,a7 n lat] ?an #bgj days aft] ! date ( enactm5t ( ?is ,act1 issue a propos$ rule to c>ry out ?is section & ! am5dm5t made by ?is section2 & 7,b7 n lat] ?an #a ye> aft] ! date ( enactm5t ( ?is ,act1 issue a f9al rule to c>ry out ?is section & ! am5dm5t made by ?is section4 7#b7 ,data =mat ,! in=mation requir$ to be provid$ by ?is section %all be provid$ by ! issu] 9 a =mat prescrib$ by ! ,commission1 & %all be made available to ! public onl9e1 9 su* =mat z ! ,commission %all prescribe4 7#c7 ,effective date ,subsection 7s7 ( section #ac ( ! ,securities ,ex*ange ,act ( #aicd1 z add$ by ?is section1 %all become effective #a ye> aft] ! date on :i* ! ,commission issues a f9al rule "u ?is section4 #aab4 ,p5alty = fail+ to disclose (f%ore hold+s 7a7 ,securities ,ex*ange ,act ( #aicd ,section #ba7;d77#c77;,b7 ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #ghu7d77#c77;,b77 is am5d$ by add+ at ! end ! foll[+3 7iv7 ,f\r? ti] ,not)/&+ clauses 7i71 7ii71 & 7iii71 = ea* violation1 ! am\nt ( ! p5alty %all n exce$ #a1jjj1jjj = any natural p]son or #aj1jjj1jjj = any o!r p]son1 if-- 7,i7 su* p]son directly or indirectly controll$ any =eign entity1 includ+ any tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation ?r\gh :i* an issu] pur*as$1 sold1 or held equity or debt in/rum5ts2 7,,ii7 su* p]son kn[+ly or recklessly fail$ to disclose any su* hold+1 pur*ase1 or sale by ! issu]2 & 7,,iii7 ! hold+1 pur*ase1 or sale w\ld h be5 o!rwise subject to disclosure by ! issu] or su* p]son "u ?is title4 4 7b7 ,securities ,act ( #aicc ,section #bj7;d77#b7 ( ! ,securities ,act ( #aicc 7#ae ,u4,s4,c4 #ggt7d77#b77 is am5d$ by add+ at ! end ! foll[+3 7,d7 ,f\r? ti] ,not)/&+ subp>agraphs 7,a71 7,b71 & 7,c71 = ea* violation1 ! am\nt ( ! p5alty %all n exce$ #a1jjj1jjj = any natural p]son or #aj1jjj1jjj = any o!r p]son1 if-- 7i7 su* p]son directly or indirectly controll$ any =eign entity1 includ+ any tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation ?r\gh :i* an issu] pur*as$1 sold1 or held equity or debt in/rum5ts2 7ii7 su* p]son kn[+ly or recklessly fail$ to disclose any su* hold+1 pur*ase1 or sale by ! issu]2 & 7iii7 ! hold+1 pur*ase1 or sale w\ld h be5 o!rwise subject to disclosure by ! issu] or su* p]son "u ?is title4 4 7c7 ,inve/m5t ,advis]s ,act ( #aidj ,section #bjc7;i77#b7 ( ! ,inve/m5t ,advis]s ,act ( #aidj 7#ae ,u4,s4,c4 #hj;b-#c7;i77#b77 is am5d$ by add+ at ! end ! foll[+3 7,d7 ,f\r? ti] ,not)/&+ subp>agraphs 7,a71 7,b71 & 7,c71 = ea* violation1 ! am\nt ( ! p5alty %all n exce$ #a1jjj1jjj = any natural p]son or #aj1jjj1jjj = any o!r p]son1 if-- 7i7 su* p]son directly or indirectly controll$ any =eign entity1 includ+ any tru/1 corporation1 limit$ liability company1 p>tn]%ip1 or f\ndation ?r\gh :i* an issu] pur*as$1 sold1 or held equity or debt in/rum5ts2 7ii7 su* p]son kn[+ly or recklessly fail$ to disclose any su* hold+1 pur*ase1 or sale by ! issu]2 & 7iii7 ! hold+1 pur*ase1 or sale w\ld h be5 o!rwise subject to disclosure by ! issu] or su* p]son "u ?is title4 4 #aac4 ,deadl9e = anti-money laund]+ rule = inve/m5t advis]s 7a7 ,anti-,money laund]+ obligations = inve/m5t advis]s ,section #ecab7;a77#b7 ( title #ca1 ,unit$ ,/ates ,code1 is am5d$-- 7#a7 9 subp>agraph 7,y71 by /rik+ or at ! end2 7#b7 by r$esign+ subp>agraph 7,z7 z subp>agraph 7,,bb72 & 7#c7 by ins]t+ aft] subp>agraph 7,y7 ! foll[+3 7,z7 an inve/m5t advis]2 4 7b7 ,rules requir$ ,! ,secret>y ( ! ,treasury %all-- 7#a7 9 consultation ) ! ,*airman ( ! ,securities & ,ex*ange ,commission & ! ,*airman ( ! ,commodity ,futures ,trad+ ,commission1 n lat] ?an #bgj days aft] ! date ( enactm5t ( ?is ,act1 publi% a propos$ rule 9 ! ,f$]al ,regi/] to c>ry out ! am5dm5ts made by ?is section2 & 7#b7 n lat] ?an #ahj days aft] ! date ( enactm5t ( ?is ,act1 publi% a f9al rule 9 ! ,f$]al ,regi/] on ! matt] describ$ 9 p>agraph 7#a74 7c7 ,cont5ts ,! f9al rule publi%$ "u ?is section %all require1 at a m9imum1 ea* inve/m5t advis] 7z def9$ 9 section #bjb7;a77#aa7 ( ! ,inve/m5t ,advis]s ,act ( #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#aa777 regi/]$ ) ! ,securities & ,ex*ange ,commission pursuant to section #bjc ( t ,act 7#ae ,u4,s4,c4 #hj;b-#c7-- 7#a7 to submit suspici\s activity reports & e/abli% an anti-money laund]+ program "u subsections 7g7 & 7h71 respectively1 ( section #ecah ( title #ca1 ,unit$ ,/ates ,code2 & 7#b7 to comply )-- 7,a7 ! cu/om] id5tification program requirem5ts "u section #ecah7l7 ( title #ca1 ,unit$ ,/ates ,code2 & 7,b7 ! due dilig5ce requirem5ts "u section #ecah7;i7 ( title #ca1 ,unit$ ,/ates ,code4 #aad4 ,anti-money laund]+ requirem5ts = =mation ag5ts 7a7 ,anti-,money laund]+ obligations = =mation ag5ts ,section #ecab7;a77#b7 ( title #ca1 ,unit$ ,/ates ,code1 z am5d$ by section #aac ( ?is ,act1 is am5d$ by ins]t+ aft] subp>agraph 7,z7 ! foll[+3 7,,aa7 any p]son engag$ 9 ! bus9ess ( =m+ new corporations1 limit$ liability companies1 p>tn]%ips1 tru/s1 or o!r legal entities2 or 4 7b7 ,deadl9e = anti-,money laund]+ rule = =mation ag5ts 7#a7 ,propos$ rule ,! ,secret>y ( ! ,treasury1 9 consultation ) ! ,attorney ,g5]al ( ! ,unit$ ,/ates1 ! ,secret>y ( ,homel& ,security1 & ! ,commission] ( ,int]nal ,rev5ue1 %all-- 7,a7 n lat] ?an #abj days aft] ! date ( enactm5t ( ?is ,act1 publi% a propos$ rule 9 ! ,f$]al ,regi/] requir+ p]sons describ$ 9 section #ecab7;a77#b77;,,aa7 ( title #ca1 ,unit$ ,/ates ,code1 z add$ by ?is section1 to e/abli% anti-money laund]+ programs "u section #ecah7;h7 ( t title2 & 7,b7 n lat] ?an #bgj days aft] ! date ( enactm5t ( ?is ,act1 publi% a f9al rule 9 ! ,f$]al ,regi/] on ! matt] describ$ 9 subp>agraph 7,a74 7#b7 ,exclusions ,! rule promulgat$ "u ?is subsection %all exclude f ! category ( p]sons engag$ 9 ! bus9ess ( =m+ new corporations or o!r entities-- 7,a7 any gov]nm5t ag5cy2 & 7,b7 any attorney or law firm t uses a paid =mation ag5t op]at+ )9 ! ,unit$ ,/ates to =m su* corporations or o!r entities4 #aae4 ,/r5g!n+ ,john ,doe summons proce$+s 7a7 ,9 g5]al ,subsection 7f7 ( section #gfji is am5d$ to read z foll[s3 7f7 ,additional requirem5t 9 ! case ( a ,john ,doe summons 7#a7 ,g5]al ,rule ,any summons describ$ 9 subsection 7c77#a7 :i* does n id5tify ! p]son ) respect to ^: liability ! summons is issu$ may be s]v$ only aft] a c\rt proce$+ 9 :i* ! ,secret>y e/abli%es t-- 7,a7 ! summons relates to ! inve/igation ( a p>ticul> p]son or asc]ta9able gr\p or class ( p]sons1 7,b7 !re is a reasonable basis = believ+ t su* p]son or gr\p or class ( p]sons may fail or may h fail$ to comply ) any provision ( any int]nal rev5ue law1 & 7,c7 ! in=mation s\ght to be obta9$ f ! exam9ation ( ! records or te/imony 7& ! id5tity ( ! p]son or p]sons ) respect to ^: liability ! summons is issu$7 is n readily available f o!r s\rces4 7#b7 ,exception ,p>agraph 7#a7 %all n apply to any summons :i* specifies t x is limit$ to in=mation reg>d+ a ,unit$ ,/ates correspond5t acc\nt 7z def9$ 9 section #ecah;,a7e77#a77;,b7 ( title #ca1 ,unit$ ,/ates ,code7 or a ,unit$ ,/ates payable-?r\gh acc\nt 7z def9$ 9 section #ecah;,a7e77#a77;,c7 ( su* title7 ( a f9ancial in/itution t is held at a non-,,fatca in/itution 7z def9$ 9 section #ggja7;a77#ea774 7#c7 ,presumption 9 cases involv+ non-fatca in/itutions ,= purposes ( ?is section1 9 any case 9 :i* ! p>ticul> p]son or asc]ta9able gr\p or class ( p]sons h f9ancial acc\nts 9 or transactions relat$ to a non-,,fatca in/itution 7z def9$ 9 section #ggja7;a77#ea771 !re %all be a presumption t !re is a reasonable basis = believ+ t su* p]son or gr\p or class ( p]sons may fail or may h fail$ to comply ) provisions ( int]nal rev5ue law4 7#d7 ,project ,john ,doe summonses 7,a7 ,9 g5]al ,not)/&+ ! requirem5ts ( p>agraph 7#a71 ! ,secret>y may issue a summons describ$ 9 p>agraph 7#a7 if ! summons-- 7i7 relates to a project :i* is approv$ "u subp>agraph 7,b71 7ii7 is issu$ to a p]son :o is a memb] ( ! gr\p or class e/abli%$ "u subp>agraph 7,b77i71 & 7iii7 is issu$ )9 #c ye>s ( ! date on :i* su* project 0 approv$ "u subp>agraph 7,b74 7,b7 ,approval ( projects ,a project may only be approv$ "u ?is subp>agraph aft] a c\rt proce$+ 9 :i* ! ,secret>y e/abli%es t-- 7i7 any summons issues ) respect to ! project w be issu$ to a memb] ( an asc]ta9able gr\p or class ( p]sons1 & 7ii7 any summons issu$ ) respect to su* project w meet ! requirem5ts ( p>agraph 7#a74 7,c7 ,ext5sion ,^u application ( ! ,secret>y1 ! c\rt may ext5d ! "t = issu+ su* summonses "u subp>agraph 7,a77i7 = additional #c-ye> p]iods1 b only if ! c\rt cont9ues to ex]cise ov]sight ( su* project "u subp>agraph 7,d74 7,d7 ,ongo+ c\rt ov]sight ,dur+ any p]iod 9 :i* ! ,secret>y is au?oriz$ to issue summonses 9 relation to a project approv$ "u subp>agraph 7,b7 7includ+ dur+ any ext5sion "u subp>agraph 7,c771 ! ,secret>y %all report annually to ! c\rt on ! use ( su* au?ority1 provide copies ( all summonses ) su* report1 & comply ) ! c\rt's direction ) respect to ! issuance ( any ,john ,doe summons "u su* project4 4 7b7 ,jurisdiction ( c\rt 7#a7 ,9 g5]al ,p>agraph 7#a7 ( section #gfji7;h7 is am5d$ by ins]t+ aft] ! fir/ s5t5ce ! foll[+ new s5t5ce3 ,any ,unit$ ,/ates di/rict c\rt 9 :i* a memb] ( ! gr\p or class to :i* a summons may be issu$ resides or is f\nd %all h jurisdiction to he> & det]m9e ! approval ( a project "u subsection 7f77#b77;,b744 7#b7 ,con=m+ am5dm5t ,! fir/ s5t5ce ( section #gfji7;h77#a7 is am5d$ by /rik+ 7f7 & ins]t+ 7f77#a74 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to summonses issu$ aft] ! date ( ! enactm5t ( ?is ,act4 #aaf4 ,improv+ en=cem5t ( =eign f9ancial acc\nt report+ 7a7 ,cl>ify+ ! connection ( =eign f9ancial acc\nt report+ to tax adm9i/ration ,p>agraph 7#d7 ( section #fajc7;b7 is am5d$ by add+ at ! end ! foll[+ new s5t5ce3 ,= purposes ( subp>agraph 7,a77i71 section #ecad ( title #ca1 ,unit$ ,/ates ,code1 & sections #ecba & #ecbb ( su* title 7z su* sections p]ta9 to su* section #ecad71 %all be consid]$ relat$ /atutes4 4 7b7 ,simplify+ ! calculation ( =eign f9ancial acc\nt report+ p5alties ,section #ecba7;a77#e77;,d77ii7 ( title #ca1 ,unit$ ,/ates ,code1 is am5d$ by /rik+ ! balance 9 ! acc\nt at ! "t ( ! violation & ins]t+ ! highe/ balance 9 ! acc\nt dur+ ! report+ p]iod to :i* ! violation relates4 7c7 ,cl>ify+ ! use ( suspici\s activity reports "u ! ,bank ,secrecy ,act = civil tax law en=cem5t ,section #ecai ( title #ca1 ,unit$ ,/ates ,code1 is am5d$ by ins]t+ ! civil & crim9al en=cem5t divisions ( ! ,int]nal ,rev5ue ,s]vice1 aft] includ+4 ,c ,end+ (f%ore tax avoidance #aba4 ,allocation ( exp5ses & taxes on basis ( repatriation ( =eign income 7a7 ,9 g5]al ,"p ,,iii ( sub*apt] ,n ( *apt] #a is am5d$ by ins]t+ aft] subp>t ,g ! foll[+ new subp>t3 ,h ,special ,rules = ,allocation ( ,=eign-,relat$ ,d$uctions & ,=eign ,tax ,cr$its ,sec4 #ige4 ,d$uctions allocat$ to def]r$ =eign income may n (fset ,unit$ ,/ates s\rce income4 ,sec4 #igf4 ,am\nt ( =eign taxes comput$ on ov]all basis4 ,sec4 #igg4 ,application ( subp>t4 #ige4 ,d$uctions allocat$ to def]r$ =eign income may n (fset ,unit$ ,/ates s\rce income 7a7 ,curr5t ye> d$uctions ,= purposes ( ?is *apt]1 =eign-relat$ d$uctions = any taxable ye>-- 7#a7 %all be tak5 into acc\nt = su* taxable ye> only to ! ext5t t su* d$uctions are allocable to curr5tly-tax$ =eign income1 & 7#b7 to ! ext5t n s all[$1 %all be tak5 into acc\nt 9 subsequ5t taxable ye>s z provid$ 9 subsection 7b74 ,=eign-relat$ d$uctions %all be allocat$ to curr5tly tax$ =eign income 9 ! same proportion :i* curr5tly tax$ =eign income be>s to ! sum ( curr5tly tax$ =eign income & def]r$ =eign income4 7b7 ,d$uctions relat$ to repatriat$ def]r$ =eign income 7#a7 ,9 g5]al ,if !re is repatriat$ =eign income = a taxable ye>1 ! portion ( ! previ\sly def]r$ d$uctions allocat$ to ! repatriat$ =eign income %all be tak5 into acc\nt = ! taxable ye> z a d$uction allocat$ to income f s\rces outside ! ,unit$ ,/ates4 ,any su* am\nt %all n be includ$ 9 =eign-relat$ d$uctions = purposes ( apply+ subsection 7a7 to su* taxable ye>4 7#b7 ,portion ( previ\sly def]r$ d$uctions ,= purposes ( p>agraph 7#a71 ! portion ( ! previ\sly def]r$ d$uctions allocat$ to repatriat$ =eign income is-- 7,a7 ! am\nt :i* be>s ! same proportion to su* d$uctions1 z 7,b7 ! repatriat$ income be>s to ! previ\sly def]r$ =eign income4 7c7 ,def9itions & special rule ,= purposes ( ?is section-- 7#a7 ,=eign-relat$ d$uctions ,! t]m =eign-relat$ d$uctions means ! total am\nt ( d$uctions & exp5ses :i* w\ld be allocat$ or apportion$ to gross income f s\rces )\t ! ,unit$ ,/ates = ! taxable ye> if bo? ! curr5tly-tax$ =eign income & def]r$ =eign income 7 tak5 into acc\nt4 7#b7 ,curr5tly-tax$ =eign income ,! t]m curr5tly-tax$ =eign income means ! am\nt ( gross income f s\rces )\t ! ,unit$ ,/ates = ! taxable ye> 7det]m9$ )\t reg>d to repatriat$ =eign income = su* ye>74 7#c7 ,def]r$ =eign income ,! t]m def]r$ =eign income means ! excess (-- 7,a7 ! am\nt t w\ld be includible 9 gross income "u subp>t ,f ( ?is "p = ! taxable ye> if-- 7i7 all controll$ =eign corporations 7 treat$ z "o controll$ =eign corporation1 & 7ii7 all e>n+s & pr(its ( all controll$ =eign corporations 7 subp>t ,f income 7z def9$ 9 section #ieb71 ov] 7,b7 ! sum (-- 7i7 all divid5ds receiv$ dur+ ! taxable ye> f controll$ =eign corporations1 plus 7ii7 am\nts includible 9 gross income "u section #iea7;a74 7#d7 ,previ\sly def]r$ =eign income ,! t]m previ\sly def]r$ =eign income means ! aggregate am\nt ( def]r$ =eign income = all prior taxable ye>s to :i* ?is "p applies1 det]m9$ z ( ! beg9n+ ( ! taxable ye>1 r$uc$ by ! repatriat$ =eign income = all su* prior taxable ye>s4 7#e7 ,repatriat$ =eign income ,! t]m repatriat$ =eign income means ! am\nt includ$ 9 gross income on acc\nt ( di/ributions out ( previ\sly def]r$ =eign income4 7#f7 ,previ\sly def]r$ d$uctions ,! t]m previ\sly def]r$ d$uctions means ! aggregate am\nt ( =eign-relat$ d$uctions n tak5 into acc\nt "u subsection 7a7 = all prior taxable ye>s 7det]m9$ z ( ! beg9n+ ( ! taxable ye>71 r$uc$ by any am\nts tak5 into acc\nt "u subsection 7b7 = su* prior taxable ye>s4 7#g7 ,treatm5t ( c]ta9 =eign taxes 7,a7 ,paid by controll$ =eign corporation ,section #gh %all n apply = purposes ( det]m9+ curr5tly-tax$ =eign income & def]r$ =eign income4 7,b7 ,paid by taxpay] ,= purposes ( det]m9+ curr5tly-tax$ =eign income1 gross income f s\rces )\t ! ,unit$ ,/ates %all be r$uc$ by ! aggregate am\nt ( taxes describ$ 9 ! applicable p>agraph ( section #ija7;b7 :i* are paid by ! taxpay] 7)\t reg>d to sections #ijb & #ifj7 dur+ ! taxable ye>4 7#h7 ,coord9ation ) section #igf ,9 det]m9+ curr5tly-tax$ =eign income & def]r$ =eign income1 ! am\nt ( deem$ =eign tax cr$its %all be det]m9$ ) reg>d to section #igf4 #igf4 ,am\nt ( =eign taxes comput$ on ov]all basis 7a7 ,curr5t ye> all[ance ,= purposes ( ?is *apt]1 ! am\nt tak5 into acc\nt z =eign income taxes = any taxable ye> %all be an am\nt :i* be>s ! same ratio to ! total =eign income taxes = t taxable ye> z-- 7#a7 ! curr5tly-tax$ =eign income = su* taxable ye>1 be>s to 7#b7 ! sum ( ! curr5tly-tax$ =eign income & def]r$ =eign income = su* ye>4 ,! portion ( ! total =eign income taxes = any taxable ye> n tak5 into acc\nt "u ! prec$+ s5t5ce = a taxable ye> %all only be tak5 into acc\nt z provid$ 9 subsection 7b7 7& %all n be tak5 into acc\nt = purposes ( apply+ sections #ijb & #ifj74 7b7 ,all[ance relat$ to repatriat$ def]r$ =eign income 7#a7 ,9 g5]al ,if !re is repatriat$ =eign income = any taxable ye>1 ! portion ( ! previ\sly def]r$ =eign income taxes paid or accru$ dur+ su* taxable ye> %all be tak5 into acc\nt = ! taxable ye> z =eign taxes paid or accru$4 ,any su* taxes s tak5 into acc\nt %all n be includ$ 9 =eign income taxes = purposes ( apply+ subsection 7a7 to su* taxable ye>4 7#b7 ,portion ( previ\sly def]r$ =eign income taxes ,= purposes ( p>agraph 7#a71 ! portion ( ! previ\sly def]r$ =eign income taxes allocat$ to repatriat$ def]r$ =eign income is-- 7,a7 ! am\nt :i* be>s ! same proportion to su* taxes1 z 7,b7 ! repatriat$ def]r$ income be>s to ! previ\sly def]r$ =eign income4 7c7 ,def9itions & special rule ,= purposes ( ?is section-- 7#a7 ,previ\sly def]r$ =eign income taxes ,! t]m previ\sly def]r$ =eign income taxes means ! aggregate am\nt ( total =eign income taxes n tak5 into acc\nt "u subsection 7a7 = all prior taxable ye>s 7det]m9$ z ( ! beg9n+ ( ! taxable ye>71 r$uc$ by any am\nts tak5 into acc\nt "u subsection 7b7 = su* prior taxable ye>s4 7#b7 ,total =eign income taxes ,! t]m total =eign income taxes means ! sum ( =eign income taxes paid or accru$ dur+ ! taxable ye> 7det]m9$ )\t reg>d to section #ijd7;c77 plus ! increase 9 =eign income taxes t w\ld be paid or accru$ dur+ ! taxable ye> "u sections #ijb & #ifj if-- 7,a7 all controll$ =eign corporations 7 treat$ z "o controll$ =eign corporation1 & 7,b7 all e>n+s & pr(its ( all controll$ =eign corporations 7 subp>t ,f income 7z def9$ 9 section #ieb74 7#c7 ,=eign income taxes ,! t]m =eign income taxes means any income1 w> pr(its1 or excess pr(its taxes paid by ! taxpay] to any =eign c\ntry or possession ( ! ,unit$ ,/ates4 7#d7 ,curr5tly-tax$ =eign income & def]r$ =eign income ,! t]ms curr5tly-tax$ =eign income & def]r$ =eign income h ! mean+s giv5 su* t]ms by section #ige7;c774 #igg4 ,application ( subp>t ,?is subp>t-- 7#a7 %all be appli$ be=e subp>t ,a1 & 7#b7 %all be appli$ sep>ately ) respect to ! categories ( income specifi$ 9 section #ijd7;d77#a74 4 7b7 ,cl]ical am5dm5t ,! table ( subp>ts = "p ,,iii ( subp>t ,n ( *apt] #a is am5d$ by ins]t+ aft] ! item relat+ to subp>t ,g ! foll[+ new item3 ,subp>t ,h4 ,special ,rules = ,allocation ( ,=eign-,relat$ ,d$uctions & ,=eign ,tax ,cr$its4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #abb4 ,excess income f transf]s ( intangibles to l[-tax$ affiliates treat$ z subp>t ,f income 7a7 ,9 g5]al ,subsection 7a7 ( section #ied is am5d$ by ins]t+ aft] p>agraph 7#c7 ! foll[+ new p>agraph3 7#d7 ! =eign base company excess intangible income = ! taxable ye> 7det]m9$ "u subsection 7f7 & r$uc$ z provid$ 9 subsection 7b77#e771 & 4 7b7 ,=eign base company excess intangible income ,section #ied is am5d$ by ins]t+ aft] subsection 7e7 ! foll[+ new subsection3 7f7 ,=eign base company excess intangible income ,= purposes ( subsection 7a77#d7 & ?is subsection3 7#a7 ,=eign base company excess intangible income def9$ 7,a7 ,9 g5]al ,! t]m =eign base company excess intangible income means1 ) respect to any cov]$ intangible1 ! excess (-- 7i7 ! sum (-- 7,i7 gross income f ! sale1 lease1 lic5se1 or o!r disposition ( prop]ty 9 :i* su* cov]$ intangible is us$ directly or indirectly1 & 7,,ii7 gross income f ! provision ( s]vices relat$ to su* cov]$ intangible or 9 connection ) prop]ty 9 :i* su* cov]$ intangible is us$ directly or indirectly1 ov] 7ii7 #aej p]c5t ( ! co/s prop]ly allocat$ & apportion$ to ! gross income tak5 into acc\nt "u clause 7i7 o!r ?an exp5ses = int]e/ & taxes & any exp5ses :i* are n directly allocable to su* gross income4 7,b7 ,same c\ntry income n tak5 into acc\nt ,if-- 7i7 ! sale1 lease1 lic5se1 or o!r disposition ( ! prop]ty ref]r$ to 9 subp>agraph 7,a77i77,i7 is = use1 consumption1 or disposition 9 ! c\ntry "u ! laws ( :i* ! controll$ =eign corporation is creat$ or organiz$1 or 7ii7 ! s]vices ref]r$ to 9 subp>agraph 7,a77i77,,ii7 are p]=m$ 9 su* c\ntry1 ! gross income f su* sale1 lease1 lic5se1 or o!r disposition1 or provision ( s]vices1 %all n be tak5 into acc\nt "u subp>agraph 7,a77i74 7#b7 ,exception bas$ on effective =eign income tax rate 7,a7 ,9 g5]al ,=eign base company excess intangible income %all n include ! applicable p]c5tage ( any item ( income receiv$ by a controll$ =eign corporation if ! taxpay] e/abli%es to ! satisfaction ( ! ,secret>y t su* income 0 subject to an effective rate ( income tax impos$ by a =eign c\ntry 9 excess ( #e p]c5t4 7,b7 ,applicable p]c5tage ,= purposes ( subp>agraph 7,a71 ! t]m applicable p]c5tage means ! ratio 7express$ z a p]c5tage71 n great] ?an #ajj p]c5t1 (-- 7i7 ! numb] ( p]c5tage po9ts by :i* ! effective rate ( income tax ref]r$ to 9 subp>agraph 7,a7 exce$s #e p]c5tage po9ts1 ov] 7ii7 #aj p]c5tage po9ts4 7,c7 ,treatm5t ( losses 9 det]m9+ effective rate ( =eign income tax ,= purposes ( det]m9+ ! effective rate ( income tax impos$ by any =eign c\ntry-- 7i7 su* effective rate %all be det]m9$ )\t reg>d to any losses c>ri$ to ! relevant taxable ye>1 & 7ii7 to ! ext5t ! income ) respect to su* intangible r$uces losses 9 ! relevant taxable ye>1 su* effective rate %all be treat$ z be+ ! effective rate :i* w\ld h be5 impos$ on su* income )\t reg>d to su* losses4 7#c7 ,cov]$ intangible ,! t]m cov]$ intangible means1 ) respect to any controll$ =eign corporation1 any intangible prop]ty 7z def9$ 9 section #icf7;h77#c77;,b77-- 7,a7 :i* is sold1 leas$1 lic5s$1 or o!rwise transf]r$ 7directly or indirectly7 to su* controll$ =eign corporation f a relat$ p]son1 or 7,b7 ) respect to :i* su* controll$ =eign corporation & "o or m relat$ p]sons has 7directly or indirectly7 ent]$ into any %>$ risk or developm5t agreem5t 7includ+ any co/ %>+ agreem5t74 7#d7 ,relat$ p]son ,! t]m relat$ p]son has ! mean+ giv5 su* t]m 9 subsection 7d77#c74 4 7c7 ,sep>ate basket = =eign tax cr$it ,subsection 7d7 ( section #ijd is am5d$ by r$esignat+ p>agraph 7#g7 z p>agraph 7#h7 & by ins]t+ aft] p>agraph 7#f7 ! foll[+ new p>agraph3 7#f7 ,sep>ate application to =eign base company excess intangible income 7,a7 ,9 g5]al ,subsections 7a71 7b71 & 7c7 ( ?is section & sections #ijb1 #ijg1 & #ifj %all be appli$ sep>ately ) respect to ea* item ( income :i* is tak5 into acc\nt "u section #ied7;a77#d7 z =eign base company excess intangible income4 7,b7 ,regulations ,! ,secret>y may issue su* regulations or o!r guidance z is necess>y or appropriate to c>ry out ! purposes ( ?is subsection1 includ+ regulations or o!r guidance :i* provides t relat$ items ( income may be aggregat$ = purposes ( ?is p>agraph4 4 7d7 ,con=m+ am5dm5ts 7#a7 ,p>agraph 7#d7 ( section #ied7;b7 is am5d$ by ins]t+ =eign base company excess intangible income describ$ 9 subsection 7a77#d7 or be=e =eign base company oil-relat$ income 9 ! la/ s5t5ce !re(4 7#b7 ,subsection 7b7 ( section #ied is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#g7 ,=eign base company excess intangible income n treat$ z ano!r k9d ( base company income ,income ( a corporation :i* is =eign base company excess intangible income %all n be consid]$ =eign base company income ( su* corporation "u p>agraph 7#b71 7#c71 or 7#e7 ( subsection 7a74 4 7e7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #abc4 ,limitations on income %ift+ ?r\gh intangible prop]ty transf]s 7a7 ,cl>ification ( def9ition ( intangible asset ,clause 7vi7 ( section #icf7;h77#c77;,b7 is am5d$ by ins]t+ 7includ+ any section #aig intangible describ$ 9 subp>agraph 7,a71 7,b71 or 7,c77i7 ( subsection 7d77#a7 ( su* section7 aft] item4 7b7 ,cl>ification ( all[able valuation me?ods 7#a7 ,=eign corporations ,p>agraph 7#b7 ( section #cfg7;d7 is am5d$ by add+ at ! end ! foll[+ new subp>agraph3 7,d7 ,regulatory au?ority ,= purposes ( ! la/ s5t5ce ( subp>agraph 7,a71 ! ,secret>y may require-- 7i7 ! valuation ( transf]s ( intangible prop]ty on an aggregate basis1 or 7ii7 ! valuation ( su* a transf] on ! basis ( ! reali/ic alt]natives to su* a transf]1 9 any case 9 :i* ! ,secret>y det]m9es t su* basis is ! mo/ reliable means ( valuation ( su* transf]s4 4 7#b7 ,allocation among taxpay]s ,section #dhb is am5d$ by add+ at ! end ! foll[+3 ,= purposes ( ! prec$+ s5t5ce1 ! ,secret>y may require ! valuation ( transf]s ( intangible prop]ty on an aggregate basis or ! valuation ( su* a transf] on ! basis ( ! reali/ic alt]natives to su* a transf]1 9 any case 9 :i* ! ,secret>y det]m9es t su* basis is ! mo/ reliable means ( valuation ( su* transf]s44 7c7 ,effective date 7#a7 ,9 g5]al ,! am5dm5ts made by ?is section %all apply to transf]s 9 taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,no inf]5ce ,no?+ 9 ! am5dm5t made by subsection 7a7 %all be con/ru$ to create any inf]5ce ) respect to ! application ( section #icf7;h77#c7 ( ! ,int]nal ,rev5ue ,code ( #aihf1 or ! au?ority ( ! ,secret>y ( ! ,treasury to provide regulations = su* application1 on or be=e ! date ( ! enactm5t ( su* am5dm5t4 #abd4 ,limitation on e>n+s /ripp+ by expatriat$ entities 7a7 ,9 g5]al ,subsection 7j7 ( section #afc is am5d$-- 7#a7 by r$esignat+ p>agraph 7#i7 z p>agraph 7#aj71 & 7#b7 by ins]t+ aft] p>agraph 7#h7 ! foll[+ new p>agraph3 7#i7 ,special rules = expatriat$ entities 7,a7 ,9 g5]al ,9 ! case ( a corporation to :i* ?is subsection applies :i* is an expatriat$ entity1 ?is subsection %all apply to su* corporation ) ! foll[+ modifications3 7i7 ,p>agraph 7#b77;,a7 %all be appli$ )\t reg>d to clause 7ii7 !re(4 7ii7 ,p>agraph 7#a77;,b7 %all be appli$-- 7,i7 )\t reg>d to ! p>5!tical1 & 7,,ii7 by sub/itut+ 9 ! #a/ succe$+ taxable ye> & 9 ! #bnd ?r\gh #aj? succe$+ taxable ye>s to ! ext5t n previ\sly tak5 into acc\nt "u ?is subp>agraph = 9 ! succe$+ taxable ye>4 7iii7 ,p>agraph 7#b77;,b7 %all be appli$-- 7,i7 )\t reg>d to clauses 7ii7 & 7iii71 & 7,,ii7 by sub/itut+ #be p]c5t ( ! adju/$ taxable income ( ! corporation = su* taxable ye> = ! matt] ( clause 7i77,,ii7 !re(4 7,b7 ,expatriat$ entity ,= purposes ( ?is p>agraph-- 7i7 ,9 g5]al ,) respect to a corporation & a taxable ye>1 ! t]m expatriat$ entity has ! mean+ giv5 su* t]m by section #ghgd7;a77#b71 det]m9$ z if su* section & ! regulations "u su* section z 9 effect on ! fir/ day ( su* taxable ye> appli$ to all taxable ye>s ( ! corporation beg9n+ aft] ,july #aj1 #aihi4 7ii7 ,exception = surrogates treat$ z a dome/ic corporation ,! t]m expatriat$ entity does n include a surrogate =eign corporation :i* is treat$ z a dome/ic corporation by reason ( section #ghgd7;b74 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #abe4 ,repeal ( *eck-!-box rules = c]ta9 =eign entities & ,,cfc look-?ru rules 7a7 ,*eck-!-,box rules ,p>agraph 7#c7 ( section #ggja7;a7 is am5d$-- 7#a7 by /rik+ &1 & 7#b7 by ins]t+ aft] insurance companies ! foll[+3 1 & any =eign bus9ess entity t-- 7,a7 has a s+le own] t does n h limit$ liability1 or 7,b7 has "o or m memb]s all ( :i* h limit$ liability 4 7b7 ,look-,?ru rule ,subp>agraph 7,c7 ( section #ied7;c77#f7 is am5d$ to read z foll[s3 7,c7 ,t]m9ation ,subp>agraph 7,a7 %all n apply to divid5ds1 int]e/1 r5ts1 & royalties receiv$ or accru$ aft] ! date ( ! enactm5t ( ! ,,cut ,loopholes ,act4 4 #abf4 ,prohibition on (f%ore loan abuse 7a7 ,9 g5]al ,subp>t ,f ( "p ,,iii ( sub*apt] ,n ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new section3 #iff4 ,income inclusion = loans to ,unit$ ,/ates %>ehold]s f controll$ =eign corporations 7a7 ,9 g5]al ,9 ! case ( a ,unit$ ,/ates %>ehold]1 !re %all be includ$ 9 income = ! taxable ye> an am\nt equal to ! disqualifi$ ,,cfc loan am\nt4 7b7 ,disqualifi$ ,,cfc loan am\nt 7#a7 ,9 g5]al ,= purposes ( ?is section1 ! disqualifi$ ,,cfc loan am\nt = any taxable ye> is an am\nt equal to ! less] (-- 7,a7 ! aggregate am\nt ( obligations ( ! ,unit$ ,/ates %>ehold] :i* orig9at$ 9 su* taxable ye> & are held 7directly or indirectly7 by controll$ =eign corporations1 or 7,b7 ! =eign gr\p e>n+s am\nt4 7#b7 ,exception ,9 det]m9+ ! am\nt ( obligations "u subp>agraph 7,a71 !re %all be exclud$ any obligation describ$ 9 section #ief7;c77#b77;,c74 7#c7 ,c>ry=w>d ( c]ta9 am\nts ,if1 = any taxable ye>1 ! am\nt "u subp>agraph 7,a7 exce$s ! am\nt "u subp>agraph 7,b71 su* excess %all be tak5 into acc\nt z an obligation to :i* subp>agraph 7,a7 applies = ! succe$+ taxable ye>4 7#d7 ,=eign gr\p e>n+s am\nt ,= purposes ( ?is section1 ! t]m =eign gr\p e>n+s am\nt means ! aggregate e>n+s & pr(its ( all controll$ =eign corporations 9 ! worldwide affiliat$ gr\p 7z def9$ 9 section #hfd7;f77#a77;,c77 ( ! ,unit$ ,/ates %>ehold]1 det]m9$-- 7,a7 z ( ! la/ day ( ! taxable ye> ( ! ,unit$ ,/ates %>ehold]1 & 7,b7 )\t reg>d to any di/ributions made dur+ su* taxable ye>4 7c7 ,d5ial ( int]e/ d$uction ,no d$uction %all be all[$ = int]e/ paid or accru$ ) respect to obligations tak5 into acc\nt "u subsection 7b74 7d7 ,treatm5t ( income s\rce ,any am\nt includ$ 9 income "u subsection 7a7 %all be treat$ z income f s\rces )9 ! ,unit$ ,/ates4 4 7b7 ,coord9ation ) section #ief ,p>agraph 7#b7 ( section #ief7;c7 is am5d$ by /rik+ & at ! end ( subp>agraph 7,k71 by /rik+ ! p]iod at ! end ( subp>agraph 7,l77ii7 & ins]t+ 2 &1 & by ins]t+ aft] subp>agraph 7,l7 ! foll[+ new subp>agraph3 7,m7 any obligation :i* is tak5 into acc\nt 9 det]m9+ ! disqualifi$ ,,cfc loan am\nt "u section #iff4 4 7c7 ,cl]ical am5dm5t ,! table ( sections = subp>t ,f ( "p ,,iii ( sub*apt] ,n ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new item3 ,sec4 #iff4 ,income inclusion = loans to c]ta9 ,unit$ ,/ates %>ehold]s f controll$ =eign corporations4 4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to obligations orig9at$ aft] ! date ( ! enactm5t ( ?is ,act4 ,,ii ,/r5g!n+ tax en=cem5t ,a ,combat+ tax %elt] promotion #bja4 ,p5alty = promot+ abusive tax %elt]s 7a7 ,p5alty = promot+ abusive tax %elt]s ,section #fgjj is am5d$-- 7#a7 by r$esignat+ subsections 7b7 & 7c7 z subsections 7d7 & 7e71 respectively1 7#b7 by /rik+ a p5alty & all t foll[s ?r\gh ! p]iod 9 ! fir/ s5t5ce ( subsection 7a7 & ins]t+ a p5alty det]m9$ "u subsection 7b71 & 7#c7 by ins]t+ aft] subsection 7a7 ! foll[+ new subsections3 7b7 ,am\nt ( p5alty2 calculation ( p5alty2 liability = p5alty 7#a7 ,am\nt ( p5alty ,! am\nt ( ! p5alty impos$ by subsection 7a7 %all n exce$ #aej p]c5t ( ! gross income d]iv$ 7or to be d]iv$7 f su* activity by ! p]son or p]sons subject to su* p5alty4 7#b7 ,calculation ( p5alty ,! p5alty am\nt det]m9$ "u p>agraph 7#a7 %all be calculat$ ) respect to ea* in/ance ( an activity describ$ 9 subsection 7a71 ea* in/ance 9 :i* income 0 d]iv$ by ! p]son or p]sons subject to su* p5alty1 & ea* p]son :o p>ticipat$ 9 su* an activity4 7#c7 ,liability = p5alty ,if m ?an #a p]son is liable "u subsection 7a7 ) respect to su* activity1 all su* p]sons %all be jo9tly & sev]ally liable = ! p5alty "u su* subsection4 7c7 ,p5alty n d$uctible ,! paym5t ( any p5alty impos$ "u ?is section or ! paym5t ( any am\nt to settle or avoid ! imposition ( su* p5alty %all n be consid]$ an ord9>y & necess>y exp5se 9 c>ry+ on a trade or bus9ess = purposes ( ?is title & %all n be d$uctible by ! p]son :o is subject to su* p5alty or :o makes su* paym5t4 4 7b7 ,con=m+ am5dm5t ,section #fgjj7;a7 is am5d$ by /rik+ ! la/ s5t5ce4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to activities aft] ! date ( ! enactm5t ( ?is ,act4 #bjb4 ,p5alty = aid+ & abett+ ! und]/atem5t ( tax liability 7a7 ,9 g5]al ,section #fgja7;a7 is am5d$-- 7#a7 by ins]t+ ! tax liability or aft] respect to1 9 p>agraph 7#a71 7#b7 by ins]t+ aid1 assi/ance1 procurem5t1 or advice ) respect to su* be=e portion bo? places x appe>s 9 p>agraphs 7#b7 & 7#c71 & 7#c7 by ins]t+ in/ance ( aid1 assi/ance1 procurem5t1 or advice or ea* su* be=e docum5t 9 ! matt] foll[+ p>agraph 7#c74 7b7 ,am\nt ( p5alty ,subsection 7b7 ( section #fgja is am5d$ to read z foll[s3 7b7 ,am\nt ( p5alty2 calculation ( p5alty2 liability = p5alty 7#a7 ,am\nt ( p5alty ,! am\nt ( ! p5alty impos$ by subsection 7a7 %all n exce$ #aej p]c5t ( ! gross income d]iv$ 7or to be d]iv$7 f su* aid1 assi/ance1 procurem5t1 or advice provid$ by ! p]son or p]sons subject to su* p5alty4 7#b7 ,calculation ( p5alty ,! p5alty am\nt det]m9$ "u p>agraph 7#a7 %all be calculat$ ) respect to ea* in/ance ( aid1 assi/ance1 procurem5t1 or advice describ$ 9 subsection 7a71 ea* in/ance 9 :i* income 0 d]iv$ by ! p]son or p]sons subject to su* p5alty1 & ea* p]son :o made su* an und]/atem5t ( ! liability = tax4 7#c7 ,liability = p5alty ,if m ?an #a p]son is liable "u subsection 7a7 ) respect to provid+ su* aid1 assi/ance1 procurem5t1 or advice1 all su* p]sons %all be jo9tly & sev]ally liable = ! p5alty "u su* subsection4 4 7c7 ,p5alty n d$uctible ,section #fgja is am5d$ by add+ at ! end ! foll[+ new subsection3 7g7 ,p5alty n d$uctible ,! paym5t ( any p5alty impos$ "u ?is section or ! paym5t ( any am\nt to settle or avoid ! imposition ( su* p5alty %all n be consid]$ an ord9>y & necess>y exp5se 9 c>ry+ on a trade or bus9ess = purposes ( ?is title & %all n be d$uctible by ! p]son :o is subject to su* p5alty or :o makes su* paym5t4 4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to activities aft] ! date ( ! enactm5t ( ?is ,act4 #bjc4 ,prohibit$ fee arrangem5t 7a7 ,9 g5]al ,section #fgja1 z am5d$ by ?is ,act1 is am5d$-- 7#a7 by r$esignat+ subsections 7f7 & 7g7 z subsections 7g7 & 7h71 respectively1 7#b7 by /rik+ subsection 7a74 9 p>agraphs 7#b7 & 7#c7 ( subsection 7g7 7z r$esignat$ by p>agraph 7#a77 & ins]t+ subsection 7a7 or 7f741 & 7#c7 by ins]t+ aft] subsection 7e7 ! foll[+ new subsection3 7f7 ,prohibit$ fee arrangem5t 7#a7 ,9 g5]al ,any p]son :o makes an agreem5t =1 *>ges1 or collects a fee :i* is = s]vices provid$ 9 connection ) ! int]nal rev5ue laws1 & ! am\nt ( :i* is calculat$ accord+ to1 or is dep5d5t ^u1 a project$ or actual am\nt (-- 7,a7 tax sav+s or b5efits1 or 7,b7 losses :i* c be us$ to (fset o!r taxable income1 %all pay a p5alty ) respect to ea* su* fee activity 9 ! am\nt det]m9$ "u subsection 7b74 7#b7 ,rules ,! ,secret>y may issue rules to c>ry out ! purposes ( ?is subsection & may provide exceptions = fee arrangem5ts t are 9 ! public int]e/4 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to fee agreem5ts1 *>ges1 & collections made aft] ! date ( ! enactm5t ( ?is ,act4 #bjd4 ,prev5t+ tax %elt] activities by f9ancial in/itutions 7a7 ,exam9ations 7#a7 ,developm5t ( exam9ation te*niques ,ea* ( ! ,f$]al bank+ ag5cies & ! ,commission %all1 9 consultation ) ! ,int]nal ,rev5ue ,s]vice1 develop exam9ation te*niques to detect pot5tial violations ( section #fgjj or #fgja ( ! ,int]nal ,rev5ue ,code ( #aihf1 by depository in/itutions1 brok]s1 deal]s1 & inve/m5t advis]s1 z appropriate4 7#b7 ,implem5tation ,ea* ( ! ,f$]al bank+ ag5cies & ! ,commission %all implem5t ! exam9ation te*niques develop$ "u p>agraph 7#a7 ) respect to ea* ( ! depository in/itutions1 brok]s1 deal]s1 or inve/m5t advis]s subject to _! en=cem5t au?ority4 ,su* exam9ation %all1 to ! ext5t possible1 be comb9$ ) any exam9ation by su* ag5cy o!rwise requir$ or au?oriz$ by ,f$]al law4 7b7 ,report to int]nal rev5ue s]vice ,9 any case 9 :i* an exam9ation conduct$ "u ?is section ) respect to a f9ancial in/itution or o!r entity reveals a pot5tial violation1 su* ag5cy %all promptly notify ! ,int]nal ,rev5ue ,s]vice ( su* pot5tial violation = inve/igation & en=cem5t by ! ,int]nal ,rev5ue ,s]vice1 9 accordance ) applicable provisions ( law4 7c7 ,report to congress ,! ,f$]al bank+ ag5cies & ! ,commission %all submit a jo9t writt5 report to ,congress 9 #bjad on _! progress 9 prev5t+ violations ( sections #fgjj & #fgja ( ! ,int]nal ,rev5ue ,code ( #aihf1 by depository in/itutions1 brok]s1 deal]s1 & inve/m5t advis]s1 z appropriate4 7d7 ,def9itions ,= purposes ( ?is section-- 7#a7 ! t]ms brok]1 deal]1 & inve/m5t advis] h ! same mean+s z 9 section #c ( ! ,securities ,ex*ange ,act ( #aicd 7#ae ,u4,s4,c4 #gh;c72 7#b7 ! t]m ,commission means ! ,securities & ,ex*ange ,commission2 7#c7 ! t]m depository in/itution has ! same mean+ z 9 section #c7;c7 ( ! ,f$]al ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7;c772 7#d7 ! t]m ,f$]al bank+ ag5cies has ! same mean+ z 9 section #c7q7 ( ! ,f$]al ,deposit ,insurance ,act 7#ab ,u4,s4,c4 #ahac7q772 & 7#e7 ! t]m ,secret>y means ! ,secret>y ( ! ,treasury4 #bje4 ,in=mation %>+ = en=cem5t purposes 7a7 ,promotion ( prohibit$ tax %elt]s or tax avoidance s*emes ,section #fajc7;h7 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#g7 ,disclosure ( returns & return in=mation relat$ to promotion ( prohibit$ tax %elt]s or tax avoidance s*emes 7,a7 ,writt5 reque/ ,^u receipt by ! ,secret>y ( a writt5 reque/ :i* meets ! requirem5ts ( subp>agraph 7,b7 f ! head ( ! ,unit$ ,/ates ,securities & ,ex*ange ,commission1 an appropriate ,f$]al bank+ ag5cy z def9$ "u section #ahac7q7 ( title #ab1 ,unit$ ,/ates ,code1 or ! ,public ,company ,acc\nt+ ,ov]sight ,bo>d1 a return or return in=mation %all be disclos$ to su* reque/or's (fic]s & employees :o are p]sonally & directly engag$ 9 an inve/igation1 exam9ation1 or proce$+ by su* reque/or to evaluate1 det]m9e1 p5alize1 or det] conduct by a f9ancial in/itution1 issu]1 or public acc\nt+ firm1 or associat$ p]son1 9 connection ) a pot5tial or actual violation ( section #fgjj 7promotion ( abusive tax %elt]s71 #fgja 7aid+ & abett+ und]/atem5t ( tax liability71 or activities relat$ to promot+ or facilitat+ inappropriate tax avoidance or tax evasion4 ,su* disclosure %all be solely = use by su* (fic]s & employees 9 su* inve/igation1 exam9ation1 or proce$+4 ,9 ! discretion ( ! ,secret>y1 su* disclosure may take ! =m ( ! p>ticipation ( ,int]nal ,rev5ue ,s]vice employees 9 a jo9t inve/igation1 exam9ation1 or proce$+ ) ! ,securities & ,ex*ange ,commission1 ,f$]al bank+ ag5cy1 or ,public ,company ,acc\nt+ ,ov]sight ,bo>d4 7,b7 ,requirem5ts ,a reque/ meets ! requirem5ts ( ?is subp>agraph if x sets =?-- 7i7 ! nature ( ! inve/igation1 exam9ation1 or proce$+1 7ii7 ! /atutory au?ority "u :i* su* inve/igation1 exam9ation1 or proce$+ is be+ conduct$1 7iii7 ! "n or names ( ! f9ancial in/itution1 issu]1 or public acc\nt+ firm to :i* su* return in=mation relates1 7iv7 ! taxable p]iod or p]iods to :i* su* return in=mation relates1 & 7v7 ! specific reason or reasons :y su* disclosure is1 or may be1 relevant to su* inve/igation1 exam9ation or proce$+4 7,c7 ,f9ancial in/itution ,= ! purposes ( ?is p>agraph1 ! t]m f9ancial in/itution means a depository in/itution1 =eign bank1 insur$ in/itution1 indu/rial loan company1 brok]1 deal]1 inve/m5t company1 inve/m5t advisor1 or o!r entity subject to regulation or ov]sight by ! ,unit$ ,/ates ,securities & ,ex*ange ,commission or an appropriate ,f$]al bank+ ag5cy4 4 7b7 ,f9ancial & acc\nt+ fraud inve/igations ,section #fajc7;i7 is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#i7 ,disclosure ( returns & return in=mation = use 9 f9ancial & acc\nt+ fraud inve/igations 7,a7 ,writt5 reque/ ,^u receipt by ! ,secret>y ( a writt5 reque/ :i* meets ! requirem5ts ( subp>agraph 7,b7 f ! head ( ! ,unit$ ,/ates ,securities & ,ex*ange ,commission or ! ,public ,company ,acc\nt+ ,ov]sight ,bo>d1 a return or return in=mation %all be disclos$ to su* reque/or's (fic]s & employees :o are p]sonally & directly engag$ 9 an inve/igation1 exam9ation1 or proce$+ by su* reque/] to evaluate ! accuracy ( a f9ancial /atem5t or report1 or to det]m9e :e!r to require a re/atem5t1 p5alize1 or det] conduct by an issu]1 inve/m5t company1 or public acc\nt+ firm1 or associat$ p]son1 9 connection ) a pot5tial or actual violation ( audit+ /&>ds or prohibitions aga9/ false or mislead+ /atem5ts or omissions 9 f9ancial /atem5ts or reports4 ,su* disclosure %all be solely = use by su* (fic]s & employees 9 su* inve/igation1 exam9ation1 or proce$+4 7,b7 ,requirem5ts ,a reque/ meets ! requirem5ts ( ?is subp>agraph if x sets =?-- 7i7 ! nature ( ! inve/igation1 exam9ation1 or proce$+1 7ii7 ! /atutory au?ority "u :i* su* inve/igation1 exam9ation1 or proce$+ is be+ conduct$1 7iii7 ! "n or names ( ! issu]1 inve/m5t company1 or public acc\nt+ firm to :i* su* return in=mation relates1 7iv7 ! taxable p]iod or p]iods to :i* su* return in=mation relates1 & 7v7 ! specific reason or reasons :y su* disclosure is1 or may be1 relevant to su* inve/igation1 exam9ation or proce$+4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to disclosures & to in=mation & docum5t reque/s made aft] ! date ( ! enactm5t ( ?is ,act4 #bjf4 ,disclosure ( in=mation to ,congress 7a7 ,disclosure by tax return prep>] 7#a7 ,9 g5]al ,subp>agraph 7,b7 ( section #gbaf7;b77#a7 is am5d$ to read z foll[s3 7,b7 pursuant to any #a ( ! foll[+ docum5ts1 if cle>ly id5tifi$3 7i7 ,! ord] ( any ,f$]al1 ,/ate1 or local c\rt ( record4 7ii7 ,a subpo5a issu$ by a ,f$]al or ,/ate gr& jury4 7iii7 ,an adm9i/rative ord]1 summons1 or subpo5a :i* is issu$ 9 ! p]=mance ( its duties by-- 7,i7 any ,f$]al ag5cy1 includ+ ,congress or any committee or subcommittee !re(1 or 7,,ii7 any ,/ate ag5cy1 body1 or commission *>g$ "u ! laws ( ! ,/ate or a political subdivision ( ! ,/ate ) ! lic5s+1 regi/ration1 or regulation ( tax return prep>]s4 4 7#b7 ,effective date ,! am5dm5t made by ?is subsection %all apply to disclosures made aft] ! date ( ! enactm5t ( ?is ,act pursuant to any docum5t 9 effect on or aft] su* date4 7b7 ,disclosure by ,secret>y ,p>agraph 7#b7 ( section #fajd7;a7 is am5d$ to read z foll[s3 7#b7 ,inspection by ,congress 7,a7 ,9 g5]al ,^u receipt ( a writt5 reque/ f a committee or subcommittee ( ,congress1 copies ( docum5ts relat$ to a det]m9ation by ! ,secret>y to grant1 d5y1 revoke1 or re/ore an organization's exemption f taxation "u section #eja %all be provid$ to su* committee or subcommittee1 includ+ any application1 notice ( /atus1 or support+ in=mation provid$ by su* organization to ! ,int]nal ,rev5ue ,s]vice2 any lett]1 analysis1 or o!r docum5t produc$ by or = ! ,int]nal ,rev5ue ,s]vice evaluat+1 det]m9+1 expla9+1 or relat+ to ! tax exempt /atus ( su* organization 7o!r ?an returns1 unless su* returns are available to ! public "u ?is section or section #fajc or #faaj72 & any communication betwe5 ! ,int]nal ,rev5ue ,s]vice & any o!r p>ty relat+ to ! tax exempt /atus ( su* organization4 7,b7 ,additional in=mation ,section #fajc7;f7 %all apply ) respect to-- 7i7 ! application = exemption ( any organization describ$ 9 subsection 7c7 or 7d7 ( section #eja :i* is exempt f taxation "u section #eja7;a7 = any taxable ye> & any application ref]r$ to 9 subp>agraph 7,b7 ( subsection 7a77#a7 ( ?is section1 & 7ii7 any o!r pap]s :i* are 9 ! possession ( ! ,secret>y & :i* relate to su* application1 z if su* pap]s con/itut$ returns4 4 7c7 ,effective date ,! am5dm5ts made by ?is section %all apply to disclosures & to in=mation & docum5t reque/s made aft] ! date ( ! enactm5t ( ?is ,act4 #bjg4 ,tax op9ion /&>ds = tax practition]s ,section #ccj7;d7 ( title #ca1 ,unit$ ,/ates ,code1 is am5d$ to read z foll[s3 7d7 ,! ,secret>y ( ! ,treasury %all impose /&>ds applicable to ! r5d]+ ( writt5 advice ) respect to any li/$ transaction or any entity1 plan1 arrangem5t1 or o!r transaction :i* has a pot5tial = tax avoidance or evasion4 ,su* /&>ds %all address1 b n be limit$ to1 ! foll[+ issues3 7#a7 ,indep5d5ce ( ! practition] issu+ su* writt5 advice f p]sons promot+1 m>ket+1 or recomm5d+ ! subject ( ! advice4 7#b7 ,collaboration among practition]s1 or betwe5 a practition] & o!r p>ty1 :i* c\ld result 9 su* collaborat+ p>ties hav+ a jo9t f9ancial int]e/ 9 ! subject ( ! advice4 7#c7 ,avoidance ( conflicts ( int]e/ :i* w\ld impair auditor indep5d5ce4 7#d7 ,= writt5 advice issu$ by a firm1 /&>ds = review+ ! advice & ensur+ ! cons5sus support ( ! firm = positions tak54 7#e7 ,reliance on reasonable factual repres5tations by ! taxpay] & o!r p>ties4 7#f7 ,appropriat5ess ( ! fees *>g$ by ! practition] = ! writt5 advice4 7#g7 ,prev5t+ practition]s & firms f aid+ or abett+ ! und]/atem5t ( tax liability by cli5ts4 7#h7 ,bann+ ! promotion ( pot5tially abusive or illegal tax %elt]s4 4 ,b ,simplify tax li5 proc$ure #baa4 ,%ort title ,?is subtitle may be cit$ z ! ,tax ,li5 ,simplification ,act4 #bab4 ,f9d+s & purpose 7a7 ,f9d+s ,congress makes ! foll[+ f9d+s3 7#a7 ,! pres5t dec5traliz$ sy/em = fil+ ,f$]al tax li5s 9 local prop]ty (fices1 :i* 0 e/abli%$ be=e ! adv5t ( mod]n comput]s1 ! ,int]net1 & e-gov]nm5t programs1 is ineffici5t1 burd5some1 & exp5sive4 7#b7 ,curr5t te*nology p]mits ! creation ( a c5traliz$ ,f$]al tax li5 fil+ sy/em :i* c provide = enhanc$ public notice ( & access to accurate tax li5 in=mation 9 a mann] t is m effici5t1 m timely1 & less burd5some ?an ! exi/+ tax li5 fil+ sy/em2 :i* w\ld exp$ite ! release ( li5s2 & :i* w\ld be less exp5sive = bo? taxpay]s & us]s4 7b7 ,purpose ,! purpose ( ?is subtitle is to simplify & mod]nize ! process = fil+ notices ( ,f$]al tax li5s1 to improve public access to tax li5 in=mation1 & to save taxpay] doll>s by e/abli%+ a nationwide1 ,int]net accessible1 & fully se>*able fil+ sy/em = ,f$]al tax li5s :i* w\ld replace ! curr5t sy/em ( local tax li5 fil+s4 #bac4 ,national tax li5 fil+ sy/em 7a7 ,fil+ ( notice ( li5 ,subsection 7f7 ( section #fcbc is am5d$ to read z foll[s3 7f7 ,fil+ ( notice2 =m 7#a7 ,fil+ ( notice ,! notice ref]r$ to 9 subsection 7a7 %all be fil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u subsection 7k74 ,! fil+ ( a notice ( li51 or a c]tificate ( release1 dis*>ge1 subord9ation1 or nonatta*m5t ( li51 or a notice ( )drawal ( a notice ( li51 9 ! ,f$]al tax li5 regi/ry %all be effective = purposes ( det]m9+ li5 priority reg>dless ( ! nature or location ( ! prop]ty int]e/ to :i* ! li5 atta*es4 7#b7 ,=m ,! =m & cont5t ( ! notice ref]r$ to 9 subsection 7a7 %all be prescrib$ by ! ,secret>y4 ,su* notice %all be valid not)/&+ any o!r provision ( law reg>d+ ! =m or cont5t ( a notice ( li54 7#c7 ,o!r national fil+ sy/ems ,once ! ,f$]al tax li5 regi/ry is op]ational "u subsection 7k71 ! fil+ ( a notice ( li5 %all be gov]n$ by ?is title & %all n be subject to any o!r ,f$]al law e/abli%+ a place or places = ! fil+ ( li5s or encumbrances "u a national fil+ sy/em4 4 7b7 ,refil+ ( notice ,p>agraph 7#b7 ( section #fcbc7;g7 is am5d$ to read z foll[s3 7#b7 ,refil+ ,a notice ( li5 may be refil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u subsection 7k74 4 7c7 ,release ( tax li5s or dis*>ge ( prop]ty 7#a7 ,9 g5]al ,section #fcbe7;a7 is am5d$ by ins]t+ 1 & %all cause ! c]tificate ( release to be fil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k71 aft] int]nal rev5ue tax4 7#b7 ,release ( tax li5s exp$it$ f #cj to #bj days ,section #fcbe7;a7 is am5d$ by /rik+ n lat] ?an #cj days & ins]t+ n lat] ?an #bj days4 7#c7 ,dis*>ge ( prop]ty f li5 ,section #fcbe7;b7 is am5d$-- 7,a7 by ins]t+ 1 & %all cause ! c]tificate ( dis*>ge to be fil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k71 aft] "u ?is *apt] 9 p>agraph 7#a71 7,b7 by ins]t+ 1 & %all cause ! c]tificate ( dis*>ge to be fil$ 9 su* ,f$]al tax li5 regi/ry1 aft] prop]ty subject to ! li5 9 p>agraph 7#b71 7,c7 by ins]t+ 1 & %all cause ! c]tificate ( dis*>ge to be fil$ 9 su* ,f$]al tax li5 regi/ry1 aft] prop]ty subject to ! li5 9 p>agraph 7#c71 & 7,d7 by ins]t+ 1 & %all cause ! c]tificate ( dis*>ge ( prop]ty to be fil$ 9 su* ,f$]al tax li5 regi/ry1 aft] c]tificate ( dis*>ge ( su* prop]ty 9 p>agraph 7#d74 7#d7 ,dis*>ge ( prop]ty f e/ate or gift tax li5 ,section #fcbe7;c7 is am5d$ by ins]t+ 1 & %all cause ! c]tificate ( dis*>ge to be fil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k71 aft] impos$ by section #fcbd4 7#e7 ,subord9ation ( li5 ,section #fcbe7;d7 is am5d$ by ins]t+ 1 & %all cause ! c]tificate ( subord9ation to be fil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k71 aft] subject to su* li54 7#f7 ,nonatta*m5t ( li5 ,section #fcbe7;e7 is am5d$ by ins]t+ 1 & %all cause ! c]tificate ( nonatta*m5t to be fil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k71 aft] prop]ty ( su* p]son4 7#g7 ,effect ( c]tificate ,p>agraphs 7#a7 & 7#b77;,b7 ( section #fcbe7;f7 are ea* am5d$ by /rik+ 9 ! same (fice z ! notice ( li5 to :i* x relates is fil$ 7if su* notice ( li5 has be5 fil$7 & ins]t+ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k74 7#h7 ,release foll[+ adm9i/rative appeal ,section #fcbf7;b7 is am5d$-- 7,a7 by /rik+ & %all include & ins]t 1 %all include1 & 7,b7 by ins]t+ 1 & %all cause ! c]tificate ( release to be fil$ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k71 aft] errone\s4 7#i7 ,)drawal ( notice ,section #fcbc7;j77#a7 is am5d$ by /rik+ at ! same (fice z ! )drawn notice & ins]t+ 9 ! ,f$]al tax li5 regi/ry op]at$ "u section #fcbc7k74 7#aj7 ,con=m+ am5dm5ts ,section #fcbe is am5d$ by /rik+ subsection 7g7 & by r$esignat+ subsection 7h7 z subsection 7g74 7d7 ,f$]al tax li5 regi/ry ,section #fcbc is am5d$ by add+ at ! end ! foll[+ new subsection3 7k7 ,f$]al tax li5 regi/ry 7#a7 ,9 g5]al ,! ,f$]al tax li5 regi/ry op]at$ "u ?is subsection %all be e/abli%$ & ma9ta9$ by ! ,secret>y & %all be accessible to & se>*able by ! public ?r\gh ! ,int]net at no co/ to access or se>*4 ,! regi/ry %all id5tify ! taxpay] to :om ! ,f$]al tax li5 applies & reflect ! date & "t ! notice ( li5 0 fil$1 & %all be made se>*able by1 at a m9imum1 taxpay] "n1 ! ,/ate ( ! taxpay]'s address z %[n on ! notice ( li51 ! type ( tax1 & ! tax p]iod4 ,! regi/ry %all also provide = ! fil+ ( c]tificates ( release1 dis*>ge1 subord9ation1 & nonatta*m5t ( ,f$]al tax li5s1 z au?oriz$ 9 sections #fcbe & #fcbf1 & may provide = publi%+ su* o!r docum5ts or in=mation ) respect to ,f$]al tax li5s z ! ,secret>y may by regulation provide "u p>agraph 7#b77;,c74 7#b7 ,adm9i/rative action 7,a7 ,9 g5]al ,! ,secret>y %all issue regulations or o!r guidance provid+ = ! ma9t5ance1 reliability1 accessibility1 & use ( ! ,f$]al tax li5 regi/ry e/abli%$ "u p>agraph 7#a74 ,su* regulations or guidance %all address1 among o!r matt]s1 issues relat$ to p]iods dur+ :i* ! regi/ry may be unavailable = use due to r\t9e ma9t5ance or o!r activities4 7,b7 ,fees ,! ,secret>y may *>ge a taxpay]'s acc\nt ) a reasonable fil+ fee = ea* notice ( li5 & ea* relat$ c]tificate1 notice1 or o!r fil+ record$ 9 ! ,f$]al tax li5 regi/ry ) respect to su* taxpay]1 9 an am\nt det]m9$ by ! ,secret>y to be suffici5t to defray ! co/s ( op]at+ ! regi/ry4 ,! ,secret>y may also *>ge a reasonable fee to any p]son :o reque/s & receives "u section #fcbc7;d77#a7 in=mation or a c]tifi$ copy ( a fil+ 9 ! ,f$]al tax li5 regi/ry to defray ! co/s ( provid+ su* in=mation or copies4 7,c7 ,fil+ ( o!r items on regi/ry ,! ,secret>y may1 by regulation1 provide = ! fil+ ( items on ! regi/ry o!r ?an ,f$]al tax li5s1 includ+ crim9al f9e judgm5ts "u section #cfac ( title #ah1 ,unit$ ,/ates ,code1 & civil judgm5ts "u section #cbja ( su* title1 if ! ,secret>y det]m9es t x w\ld be useful & appropriate to d s4 4 7e7 ,c]tifi$ copies ( in=mation f regi/ry ,section #fcbc1 z am5d$ by subsection 7d71 is am5d$ by add+ at ! end ! foll[+ new subsection3 7l7 ,c]tifi$ copies ( in=mation f ,f$]al regi/ry ,! ,secret>y %all make available 9 a c]tificate t c be admitt$ into evid5ce 9 ! c\rts ( ! ,unit$ ,/ates )\t extr9sic evid5ce ( its au!nticity ! foll[+ in=mation to any p]son t submits a reque/ 9 a =m specifi$ by ! ,secret>y3 7#a7 ,:e!r !re is on file 9 ! ,f$]al tax li5 regi/ry op]at$ "u subsection 7k7 at a date & "t specifi$ by ! ,secret>y1 b n a date e>li] ?an #c days be=e ! creation ( ! c]tificate1 any notice ( a li5 t-- 7,a7 designates a p>ticul> taxpay]1 7,b7 has n be5 fully satisfi$1 become legally un5=ceable1 or be5 releas$ or )drawn1 & 7,c7 if ! reque/ s /ates1 has be5 fully satisfi$1 become legally un5=ceable1 or be5 releas$ or )drawn1 & a record ( :i* is ma9ta9$ on ! regi/ry at ! "t ( fil+ ( ! reque/1 7#b7 ! date & "t ( fil+ ( & ! in=mation provid$ 9 ea* notice ( li51 & 7#c7 if ! reque/ s /ates1 ! date & "t ( fil+ ( & ! in=mation provid$ 9 ea* c]tificate ( release1 dis*>ge1 subord9ation1 or non-atta*m5t & ea* notice ( )drawal record$ 9 ! regi/ry ) respect to ea* notice ( li54 4 7f7 ,effective date2 implem5tation ( regi/ry 7#a7 ,effective date ,! am5dm5ts made by ?is section %all take effect on ! date det]m9$ by ! ,secret>y ( ! ,treasury "u p>agraph 7#b77;,e7 &1 except z provid$ 9 p>agraph 7#b77;,f71 %all apply to notices ( li5s fil$ aft] su* date4 7#b7 ,implem5tation ( ,f$]al tax li5 regi/ry 7,a7 ,pilot project ,prior to ! implem5tation ( ! ,f$]al tax li5 regi/ry "u section #fcbc7k77#a7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by ?is section71 ! ,secret>y ( ! ,treasury1 or ! ,secret>y's delegate1 %all conduct & %all complete by n lat] ?an #b ye>s aft] ! date ( ! enactm5t ( ?is ,act #a or m pilot projects to te/ ! accessibility1 reliability1 & effectiv5ess ( ! electronic sy/ems design$ to op]ate ! regi/ry4 7,b7 ,,gao review ,)9 #c mon?s aft] ! completion ( su* a pilot project1 ! ,gov]nm5t ,acc\ntability ,(fice %all provide a writt5 evaluation ( ! project results & provide su* evaluation to ! ,secret>y ( ! ,treasury1 ! ,commission] ( ,int]nal ,rev5ue1 & appropriate committees 9 ,congress4 ,! ,secret>y & ,commission] %all coop]ate )1 & provide in=mation reque/$ by1 ! ,gov]nm5t ,acc\ntability ,(fice to enable ! evaluation to be complet$ by ! date specifi$4 7,c7 ,nationwide te/ ,^u ! completion ( #a or m su* pilot projects & aft] mak+ a det]m9ation t ! electronic sy/ems design$ to op]ate ! ,f$]al tax li5 regi/ry are suffici5tly accessible1 reliable1 & effective1 ! ,secret>y ( ! ,treasury1 or ! ,secret>y's delegate1 %all conduct a nationwide te/ ( ! ,f$]al tax li5 regi/ry to evaluate its capabilities & functionality4 7,d7 ,data protection ,prior to ! implem5tation ( su* regi/ry1 ! ,secret>y ( ! ,treasury1 or ! ,secret>y's delegate1 %all take appropriate /eps to-- 7i7 secure & prev5t tamp]+ ) ! data record$ 9 ! regi/ry1 7ii7 review ! in=mation curr5tly provid$ 9 public li5 fil+s & det]m9e :e!r any su* in=mation %\ld be exclud$ or protect$ f public view+ 9 su* regi/ry1 & 7iii7 develop a sy/em1 aft] consultation ) ! ,/ates1 indu/ry1 & o!r int]e/$ p>ties1 & aft] consid]ation ( se>* crit]ia develop$ = o!r public fil+ sy/ems includ+ ,article #i ( ! ,uni=m ,comm]cial ,code1 t w enable us]s ( ! regi/ry1 :5 exam9+ tax li5 in=mation = a taxpay] ) a common "n1 to id5tify ?r\gh reasonable ef=ts ! specific p]son to :om su* tax li5 relates4 7,e7 ,decl>ation ( regi/ry effective date ,^u ! successful completion ( a nationwide te/ ( ! ,f$]al tax li5 regi/ry sy/em1 ! ,secret>y ( ! ,treasury %all det]m9e & ann\nce publicly a date ^u :i* ! regi/ry %all take effect & become op]ational4 7,f7 ,ord]ly transition ,9 ord] to p]mit an ord]ly transition to ! ,f$]al tax li5 regi/ry1 ! ,secret>y ( ! ,treasury may by regulation prescribe = ! cont9u$ fil+ ( notices ( ,f$]al tax li5s 9 ! (fices ( ! ,/ates1 c\nties1 & o!r gov]nm5tal subdivisions aft] ! det]m9ation ( an effective date "u subp>agraph 7,e7 "u ! provisions ( section #fcbc7;f7 z 9 effect be=e su* effective date1 = an appropriate p]iod n to exce$ #b ye>s aft] su* effective date4 ,,iii ,end+ excessive corporate tax d$uctions = /ock options #cja4 ,consi/5t treatm5t ( /ock options by corporations 7a7 ,consi/5t treatm5t = wage d$uction 7#a7 ,9 g5]al ,section #hc7;h7 is am5d$-- 7,a7 by /rik+ ,9 ! case ( & ins]t+3 7#a7 ,9 g5]al ,9 ! case ( 1 & 7,b7 by add+ at ! end ! foll[+ new p>agraph3 7#b7 ,/ock options ,9 ! case ( prop]ty transf]r$ to a p]son 9 connection ) a /ock option1 any d$uction relat$ to su* /ock option %all be all[$ only "u section #afb7q7 & p>agraph 7#a7 %all n apply4 4 7#b7 ,treatm5t ( comp5sation paid ) /ock options ,section #afb is am5d$ by r$esignat+ subsection 7q7 z subsection 7r7 & by ins]t+ aft] subsection 7p7 ! foll[+ new subsection3 7q7 ,treatm5t ( comp5sation paid ) /ock options 7#a7 ,9 g5]al ,9 ! case ( comp5sation = p]sonal s]vices t is paid ) /ock options1 ! d$uction "u subsection 7a77#a7 %all n exce$ ! am\nt ! taxpay] has treat$ z comp5sation co/ ) respect to su* /ock options = ! purpose ( asc]ta9+ income1 pr(it1 or loss 9 a report or /atem5t to %>ehold]s1 p>tn]s1 or o!r proprietors 7or to b5efici>ies71 & %all be tak5 into acc\nt 9 ! same p]iod t su* comp5sation co/ is recogniz$ = su* purpose4 7#b7 ,special rules = controll$ gr\ps ,! ,secret>y may prescribe rules = ! application ( p>agraph 7#a7 9 cases :]e ! /ock option is grant$ by-- 7,a7 a p>5t or subsidi>y corporation 7)9 ! mean+ ( section #dbd7 ( ! taxpay]1 or 7,b7 ano!r corporation4 4 7b7 ,consi/5t treatm5t = rese>* tax cr$it ,section #da7;b77#b77;,d7 is am5d$ by ins]t+ at ! end ! foll[+ new clause3 7iv7 ,special rule = /ock options ,! am\nt :i* may be treat$ z wages = any taxable ye> 9 connection ) ! issuance ( a /ock option %all n exce$ ! am\nt all[$ = su* taxable ye> z a comp5sation d$uction "u section #afb7q7 ) respect to su* /ock option4 4 7c7 ,application ( am5dm5ts ,! am5dm5ts made by ?is section %all apply to /ock options ex]cis$ aft] ! date ( ! enactm5t ( ?is ,act1 except t-- 7#a7 su* am5dm5ts %all n apply to /ock options t 7 grant$ be=e su* date & t ve/$ 9 taxable p]iods beg9n+ on or be=e ,june #ae1 #bjje1 7#b7 = /ock options t 7 grant$ be=e su* date ( enactm5t & ve/$ dur+ taxable p]iods beg9n+ aft] ,june #ae1 #bjje1 & end+ be=e su* date ( enactm5t1 a d$uction "u section #afb7q7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by subsection 7a77#b77 %all be all[$ 9 ! fir/ taxable p]iod ( ! taxpay] t ends aft] su* date ( enactm5t1 7#c7 = public entities report+ z small bus9ess issu]s & = non-public entities requir$ to file public reports ( f9ancial condition1 p>agraphs 7#a7 & 7#b7 %all be appli$ by sub/itut+ ,decemb] #ae1 #bjje = ,june #ae1 #bjje1 & 7#d7 no d$uction %all be all[$ "u section #hc7;h7 or section #afb7q7 ( su* ,code ) respect to any /ock option ! ve/+ date ( :i* is *ang$ to accel]ate ! "t at :i* ! option may be ex]cis$ 9 ord] to avoid ! applicability ( su* am5dm5ts4 #cjb4 ,application ( executive pay d$uction limit 7a7 ,9 g5]al ,subp>agraph 7,d7 ( section #afb7m77#d7 is am5d$ to read z foll[s3 7,d7 ,/ock option comp5sation ,! t]m applicable employee remun]ation %all include any comp5sation d$uct$ "u subsection 7q71 & su* comp5sation %all n qualify z p]=mance-bas$ comp5sation "u subp>agraph 7,c74 4 7b7 ,effective date ,! am5dm5t made by ?is section %all apply to /ock options ex]cis$ or grant$ aft] ! date ( ! enactm5t ( ?is ,act4 ,,iv ,clos+ ! d]ivatives bl5d$ rate loophole #dja4 ,%ort title ,?is title may be cit$ z ! ,clos+ ! ,d]ivatives ,bl5d$ ,rate ,loophole ,act4 #djb4 ,modifications to treatm5t ( section #abef contracts 7a7 ,elim9ation ( bl5d$ capital ga9 or loss treatm5t 9 favor ( %ort-,t]m capital ga9 or loss 7#a7 ,9 g5]al ,p>agraph 7#c7 ( section #abef7;a7 is am5d$ to read z foll[s3 7#c7 any ga9 or loss ) respect to a section #abef contract %all be treat$ z %ort-t]m capital ga9 or loss1 & 4 7#b7 ,con=m+ am5dm5ts ,subsection 7f7 ( section #abef is am5d$ by /rik+ p>agraphs 7#b71 7#c71 & 7#d7 & by r$esignat+ p>agraph 7#e7 z p>agraph 7#b74 7b7 ,con=m+ am5dm5ts 7#a7 ,clause 7iv7 ( section #ihh7;c77#a77;,e7 is am5d$ to read z foll[s3 7iv7 ,treatm5t ( c]ta9 curr5cy contracts ,except z provid$ 9 regulations1 9 ! case ( a qualifi$ fund1 any bank =w>d contract1 any =eign curr5cy futures contract trad$ on a =eign ex*ange1 or to ! ext5t provid$ 9 regulations any simil> in/rum5t1 :i* is n o!rwise a section #abef contract %all be treat$ z a section #abef contract = purposes ( section #abef4 4 7#b7 ,subp>agraph 7,a7 ( section #abab7;c77#a7 is am5d$ by /rik+ prec$+ taxable ye> & all t foll[s & ins]t+ prec$+ taxable ye>1 ! am\nt s all[$ %all be treat$ z %ort-t]m capital loss f section #abef contracts44 7#c7 ,subp>agraph 7,a7 ( section #abab7;c77#f7 is am5d$ by /rik+ prec$+ taxable ye> & all t foll[s & ins]t+ prec$+ taxable ye>1 ! am\nt all[$ z a c>ryback %all be treat$ z %ort-t]m ga9 = ! loss ye>44 7#d7 ,subp>agraph 7,b7 ( section #abab7;c77#f7 is am5d$ by /rik+ or long-t]m4 7#e7 ,subsection 7f7 ( section #abef is am5d$ by /rik+ p>agraphs 7#c7 & 7#d7 & by r$esignat+ p>agraph 7#e7 z p>agraph 7#c74 7c7 ,effective dates 7#a7 ,9 g5]al ,except z provid$ 9 p>agraph 7#b71 ! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,con=m+ am5dm5ts ,! am5dm5ts made by p>agraphs 7#b71 7#c71 & 7#d7 ( subsection 7b7 %all apply to losses = taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 #djc4 ,modifications to treatm5t ( deal]s 9 securities & commodities 7a7 ,modification ( def9ition ( security ,p>agraph 7#b7 ( section #dge7;c7 is am5d$ by /rik+ ! second s5t5ce4 7b7 ,requir$ m>k to m>ket = deal]s 9 commodities ,subsection 7e7 ( section #dge is am5d$-- 7#a7 by /rik+ ,9 ! case ( a deal] 9 commodities :o elects ! application ( ?is subsection1 ?is section %all apply to commodities held by su* deal] 9 p>agraph 7#a7 & ins]t+ ,?is section %all apply to commodities held by a deal] 9 commodities1 & 7#b7 by /rik+ p>agraph 7#c74 7c7 ,commodities d]ivatives deal]s ,clause 7i7 ( section #abba7;b77#a77;,b7 is am5d$ by /rik+ a note1 bond1 or o!r evid5ce ( indebt$ness1 or a section #abef contract 7z def9$ 9 section #abef7;b77 & ins]t+ or a note1 bond1 or o!r evid5ce ( indebt$ness74 7d7 ,te*nical am5dm5t ,p>agraph 7#a7 ( section #adjb7;i7 is am5d$ by /rik+ subsection 7a77#c77;,a7 & ins]t+ subsection 7a77#c74 7e7 ,effective date ,! am5dm5ts made by ?is section %all apply to taxable ye>s beg9n+ aft] ! date ( ! enactm5t ( ?is ,act4 ,v ,end+ ! t> s&s oil spill loophole #eja4 ,%ort title ,?is title may be cit$ z ! ,clos+ ! ,oil ,spill ,cleanup ,loophole ,act4 #ejb4 ,requirem5ts = contribution to ! ,oil ,spill ,liability ,tru/ ,fund 7a7 ,9 g5]al ,p>agraph 7#a7 ( section #dfab7;a7 is am5d$ to read z foll[s3 7#a7 ,crude oil ,! t]m crude oil includes crude oil cond5sates1 natural gasol9e1 %ale oil1 any bitum5 or bitum9\s mixture1 any oil d]iv$ f a bitum5 or bitum9\s mixture1 & any oil d]iv$ f k]og5-be>+ s\rces4 4 7b7 ,regulatory au?ority ,to address o!r types ( crude oil & petroleum products ,subsection 7a7 ( section #dfab is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#aj7 ,regulatory au?ority to address o!r types ( crude oil & petroleum products ,"u su* regulations z ! ,secret>y may prescribe1 aft] consultation ) ! ,adm9i/rator ( ! ,environm5tal ,protection ,ag5cy1 ! ,secret>y may include z crude oil or z a petroleum product subject to tax "u section #dfaa1 any fuel fe$/ock or f9i%$ fuel product cu/om>ily transport$ by pipel9e1 vessel1 railc>1 or tank] truck if ! ,secret>y det]m9es t-- 7,a7 ! classification ( su* fuel fe$/ock or f9i%$ fuel product is consi/5t ) ! def9ition ( oil "u ! ,oil ,pollution ,act ( #aiij1 & 7,b7 su* fuel fe$/ock or f9i%$ fuel product is produc$ 9 suffici5t comm]cial quantities z to pose a significant risk ( haz>d 9 ! ev5t ( a dis*>ge4 4 7c7 ,remov+ re/rictions relat+ to oil wells & extraction me?ods ,p>agraph 7#b7 ( section #dfab7;a7 is am5d$ by /rik+ f a well locat$4 7d7 ,effective date ,! am5dm5ts made by ?is section %all apply to oil & petroleum products receiv$ or ent]$ dur+ cal5d> qu>t]s beg9n+ m ?an #fj days aft] ! date ( ! enactm5t ( ?is ,act1 reg>dless ( :e!r ! ,secret>y ( ! ,treasury has promulgat$ regulations implem5t+ su* am5dm5ts4 #ejc4 ,ext5sion ( ,oil ,spill ,liability ,tru/ ,fund f9anc+ rate ,section #dfaa is am5d$ by /rik+ subsection 7f74 #ejd4 ,te*nical am5dm5t ,subclause 7,i7 ( section #dfab7;e77#b77;,b77ii7 is am5d$ by /rik+ tranf]r$ & ins]t+ transf]r$4 ,,vi ,end+ ! c>ri$ int]e/ loophole #fja4 ,%ort title2 etc ,?is title may be cit$ z ! ,c>ri$ ,int]e/ ,fairness ,act ( #bjab4 #fjb4 ,p>tn]%ip int]e/s transf]r$ 9 connection ) p]=mance ( s]vices 7a7 ,modification to election ,to include p>tn]%ip int]e/ 9 gross income 9 ye> ( transf] ,subsection 7c7 ( section #hc is am5d$ by r$esignat+ p>agraph 7#d7 z p>agraph 7#e7 & by ins]t+ aft] p>agraph 7#c7 ! foll[+ new p>agraph3 7#d7 ,p>tn]%ip int]e/s ,except z provid$ by ! ,secret>y-- 7,a7 ,9 g5]al ,9 ! case ( any transf] ( an int]e/ 9 a p>tn]%ip 9 connection ) ! provision ( s]vices to 7or = ! b5efit (7 su* p>tn]%ip-- 7i7 ! fair m>ket value ( su* int]e/ %all be treat$ = purposes ( ?is section z be+ equal to ! am\nt ( ! di/ribution :i* ! p>tn] w\ld receive if ! p>tn]%ip sold 7at ! "t ( ! transf]7 all ( its assets at fair m>ket value & di/ribut$ ! proce$s ( su* sale 7r$uc$ by ! liabilities ( ! p>tn]%ip7 to its p>tn]s 9 liquidation ( ! p>tn]%ip1 & 7ii7 ! p]son receiv+ su* int]e/ %all be treat$ z hav+ made ! election "u subsection 7b77#a7 unless su* p]son makes an election "u ?is p>agraph to h su* subsection n apply4 7,b7 ,election ,! election "u subp>agraph 7,a77ii7 %all be made "u rules simil> to ! rules ( subsection 7b77#b74 4 7b7 ,effective date ,! am5dm5ts made by ?is section %all apply to int]e/s 9 p>tn]%ips transf]r$ aft] ! date ( ! enactm5t ( ?is ,act4 #fjc4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips 7a7 ,9 g5]al ,"p ,i ( sub*apt] ,k ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new section3 #gaj4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips 7a7 ,treatm5t ( di/ributive %>e ( p>tn]%ip items ,= purposes ( ?is title1 9 ! case ( an inve/m5t s]vices p>tn]%ip int]e/-- 7#a7 ,9 g5]al ,not)/&+ section #gjb7;b7-- 7,a7 an am\nt equal to ! net capital ga9 ) respect to su* int]e/ = any p>tn]%ip taxable ye> %all be treat$ z ord9>y income1 & 7,b7 subject to ! limitation ( p>agraph 7#b71 an am\nt equal to ! net capital loss ) respect to su* int]e/ = any p>tn]%ip taxable ye> %all be treat$ z an ord9>y loss4 7#b7 ,re*>act]ization ( losses limit$ to re*>act]iz$ ga9s ,! am\nt treat$ z ord9>y loss "u p>agraph 7#a77;,b7 = any taxable ye> %all n exce$ ! excess 7if any7 (-- 7,a7 ! aggregate am\nt treat$ z ord9>y income "u p>agraph 7#a77;,a7 ) respect to ! inve/m5t s]vices p>tn]%ip int]e/ = all prec$+ p>tn]%ip taxable ye>s to :i* ?is section applies1 ov] 7,b7 ! aggregate am\nt treat$ z ord9>y loss "u p>agraph 7#a77;,b7 ) respect to su* int]e/ = all prec$+ p>tn]%ip taxable ye>s to :i* ?is section applies4 7#c7 ,allocation to items ( ga9 & loss 7,a7 ,net capital ga9 ,! am\nt treat$ z ord9>y income "u p>agraph 7#a77;,a7 %all be allocat$ ratably among ! items ( long-t]m capital ga9 tak5 into acc\nt 9 det]m9+ su* net capital ga94 7,b7 ,net capital loss ,! am\nt treat$ z ord9>y loss "u p>agraph 7#a77;,b7 %all be allocat$ ratably among ! items ( long-t]m capital loss & %ort-t]m capital loss tak5 into acc\nt 9 det]m9+ su* net capital loss4 7#d7 ,t]ms relat+ to capital ga9s & losses ,= purposes ( ?is section-- 7,a7 ,9 g5]al ,net capital ga91 long-t]m capital ga91 & long-t]m capital loss1 ) respect to any inve/m5t s]vices p>tn]%ip int]e/ = any taxable ye>1 %all be det]m9$ "u section #abbb1 except t su* section %all be appli$-- 7i7 )\t reg>d to ! re*>act]ization ( any item z ord9>y income or ord9>y loss "u ?is section1 7ii7 by only tak+ into acc\nt items ( ga9 & loss tak5 into acc\nt by ! hold] ( su* int]e/ "u section #gjb ) respect to su* int]e/ = su* taxable ye>1 & 7iii7 by treat+ prop]ty :i* is tak5 into acc\nt 9 det]m9+ ga9s & losses to :i* section #abca applies z capital assets held = m ?an #a ye>4 7,b7 ,net capital loss ,! t]m net capital loss means ! excess ( ! losses f sales or ex*anges ( capital assets ov] ! ga9s f su* sales or ex*anges4 ,rules simil> to ! rules ( clauses 7i7 ?r\gh 7iii7 ( subp>agraph 7,a7 %all apply = purposes ( ! prec$+ s5t5ce4 7#e7 ,special rules = divid5ds 7,a7 ,individuals ,any divid5d allocat$ to any inve/m5t s]vices p>tn]%ip int]e/ %all n be treat$ z qualifi$ divid5d income = purposes ( section #a7;h74 7,b7 ,corporations ,no d$uction %all be all[$ "u section #bdc or #bde ) respect to any divid5d allocat$ to any inve/m5t s]vices p>tn]%ip int]e/4 7#f7 ,special rule = qualifi$ small bus9ess /ock ,section #abjb %all n apply to any ga9 f ! sale or ex*ange ( qualifi$ small bus9ess /ock 7z def9$ 9 section #abjb7;c77 allocat$ ) respect to any inve/m5t s]vices p>tn]%ip int]e/4 7b7 ,dispositions ( p>tn]%ip int]e/s 7#a7 ,ga9 7,a7 ,9 g5]al ,any ga9 on ! disposition ( an inve/m5t s]vices p>tn]%ip int]e/ %all be-- 7i7 treat$ z ord9>y income1 & 7ii7 recogniz$ not)/&+ any o!r provision ( ?is subtitle4 7,b7 ,gift & transf]s at dea? ,9 ! case ( a disposition ( an inve/m5t s]vices p>tn]%ip int]e/ by gift or by reason ( dea? ( ! taxpay]-- 7i7 subp>agraph 7,a7 %all n apply1 7ii7 su* int]e/ %all be treat$ z an inve/m5t s]vices p>tn]%ip int]e/ 9 ! h&s ( ! p]son acquir+ su* int]e/1 & 7iii7 any am\nt t w\ld h be5 treat$ z ord9>y income "u ?is subsection _h ! dec$5t sold su* int]e/ imm$iately be=e dea? %all be treat$ z an item ( income 9 respect ( a dec$5t "u section #fia4 7#b7 ,loss ,any loss on ! disposition ( an inve/m5t s]vices p>tn]%ip int]e/ %all be treat$ z an ord9>y loss to ! ext5t ( ! excess 7if any7 (-- 7,a7 ! aggregate am\nt treat$ z ord9>y income "u subsection 7a7 ) respect to su* int]e/ = all p>tn]%ip taxable ye>s to :i* ?is section applies1 ov] 7,b7 ! aggregate am\nt treat$ z ord9>y loss "u subsection 7a7 ) respect to su* int]e/ = all p>tn]%ip taxable ye>s to :i* ?is section applies4 7#c7 ,election ) respect to c]ta9 ex*anges ,p>agraph 7#a77;,a77ii7 %all n apply to ! contribution ( an inve/m5t s]vices p>tn]%ip int]e/ to a p>tn]%ip 9 ex*ange = an int]e/ 9 su* p>tn]%ip if-- 7,a7 ! taxpay] makes an irrevocable election to treat ! p>tn]%ip int]e/ receiv$ 9 ! ex*ange z an inve/m5t s]vices p>tn]%ip int]e/1 & 7,b7 ! taxpay] agrees to comply ) su* report+ & recordkeep+ requirem5ts z ! ,secret>y may prescribe4 7#d7 ,di/ributions ( p>tn]%ip prop]ty 7,a7 ,9 g5]al ,9 ! case ( any di/ribution ( prop]ty by a p>tn]%ip ) respect to any inve/m5t s]vices p>tn]%ip int]e/ held by a p>tn]1 ! p>tn] receiv+ su* prop]ty %all recognize ga9 equal to ! excess 7if any7 (-- 7i7 ! fair m>ket value ( su* prop]ty at ! "t ( su* di/ribution1 ov] 7ii7 ! adju/$ basis ( su* prop]ty 9 ! h&s ( su* p>tn] 7det]m9$ )\t reg>d to subp>agraph 7,c774 7,b7 ,treatm5t ( ga9 z ord9>y income ,any ga9 recogniz$ by su* p>tn] "u subp>agraph 7,a7 %all be treat$ z ord9>y income to ! same ext5t & 9 ! same mann] z ! increase 9 su* p>tn]'s di/ributive %>e ( ! taxable income ( ! p>tn]%ip w\ld be treat$ "u subsection 7a7 if1 imm$iately prior to ! di/ribution1 ! p>tn]%ip _h sold ! di/ribut$ prop]ty at fair m>ket value & all ( ! ga9 f su* disposition 7 allocat$ to su* p>tn]4 ,= purposes ( apply+ subsection 7a77#b71 any ga9 treat$ z ord9>y income "u ?is subp>agraph %all be treat$ z an am\nt treat$ z ord9>y income "u subsection 7a77#a77;,a74 7,c7 ,adju/m5t ( basis ,9 ! case a di/ribution to :i* subp>agraph 7,a7 applies1 ! basis ( ! di/ribut$ prop]ty 9 ! h&s ( ! di/ributee p>tn] %all be ! fair m>ket value ( su* prop]ty4 7,d7 ,special rules ) respect to m]g]s1 divisions1 & te*nical t]m9ations ,9 ! case ( a taxpay] :i* satisfies requirem5ts simil> to ! requirem5ts ( subp>agraphs 7,a7 & 7,b7 ( p>agraph 7#c71 ?is p>agraph & p>agraph 7#a77;,a77ii7 %all n apply to ! di/ribution ( a p>tn]%ip int]e/ if su* di/ribution is 9 connection ) a contribution 7or deem$ contribution7 ( any prop]ty ( ! p>tn]%ip to :i* section #gba applies pursuant to a transaction describ$ 9 p>agraph 7#a77;,b7 or 7#b7 ( section #gjh7;b74 7c7 ,inve/m5t s]vices p>tn]%ip int]e/ ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m inve/m5t s]vices p>tn]%ip int]e/ means any int]e/ 9 an inve/m5t p>tn]%ip acquir$ or held by any p]son 9 connection ) ! conduct ( a trade or bus9ess describ$ 9 p>agraph 7#b7 by su* p]son 7or any p]son relat$ to su* p]son74 ,an int]e/ 9 an inve/m5t p>tn]%ip held by any p]son-- 7,a7 %all n be treat$ z an inve/m5t s]vices p>tn]%ip int]e/ = any p]iod be=e ! fir/ date on :i* x is s held 9 connection ) su* a trade or bus9ess1 7,b7 %all n cease to be an inve/m5t s]vices p>tn]%ip int]e/ m]ely because su* p]son holds su* int]e/ o!r ?an 9 connection ) su* a trade or bus9ess1 & 7,c7 %all be treat$ z an inve/m5t s]vices p>tn]%ip int]e/ if acquir$ f a relat$ p]son 9 ^: h&s su* int]e/ 0 an inve/m5t s]vices p>tn]%ip int]e/4 7#b7 ,bus9esses to :i* ?is section applies ,a trade or bus9ess is describ$ 9 ?is p>agraph if su* trade or bus9ess prim>ily involves ! p]=mance ( any ( ! foll[+ s]vices ) respect to assets held 7directly or indirectly7 by ! inve/m5t p>tn]%ip ref]r$ to 9 p>agraph 7#a73 7,a7 ,advis+ z to ! advisability ( inve/+ 91 pur*as+1 or sell+ any specifi$ asset4 7,b7 ,manag+1 acquir+1 or dispos+ ( any specifi$ asset4 7,c7 ,arrang+ f9anc+ ) respect to acquir+ specifi$ assets4 7,d7 ,any activity 9 support ( any s]vice describ$ 9 subp>agraphs 7,a7 ?r\gh 7,c74 7#c7 ,inve/m5t p>tn]%ip 7,a7 ,9 g5]al ,! t]m inve/m5t p>tn]%ip means any p>tn]%ip if1 at ! end ( any cal5d> qu>t] end+ aft] ! date ( enactm5t ( ?is section-- 7i7 sub/antially all ( ! assets ( ! p>tn]%ip are specifi$ assets 7det]m9$ )\t reg>d to any section #aig intangible )9 ! mean+ ( section #aig7;d771 & 7ii7 m ?an half ( ! capital ( ! p>tn]%ip is attributable to qualifi$ capital int]e/s :i* 79 ! h&s ( ! own]s ( su* int]e/s7 con/itute prop]ty n held 9 connection ) a trade or bus9ess4 7,b7 ,special rules = det]m9+ if prop]ty n held 9 connection ) trade or bus9ess ,except z o!rwise provid$ by ! ,secret>y1 = purposes ( det]m9+ :e!r any int]e/ 9 a p>tn]%ip con/itutes prop]ty n held 9 connection ) a trade or bus9ess "u subp>agraph 7,a77ii7-- 7i7 any election "u subsection 7e7 or 7f7 ( section #dge %all be disreg>d$1 & 7ii7 p>agraph 7#e77;,b7 %all n apply4 7,c7 ,antiabuse rules ,! ,secret>y may issue regulations or o!r guidance :i* prev5t ! avoidance ( ! purposes ( subp>agraph 7,a71 includ+ regulations or o!r guidance :i* treat conv]tible & cont+5t debt 7& o!r debt hav+ ! attributes ( equity7 z a capital int]e/ 9 ! p>tn]%ip4 7,d7 ,controll$ gr\ps ( entities 7i7 ,9 g5]al ,9 ! case ( a controll$ gr\p ( entities1 if an int]e/ 9 ! p>tn]%ip receiv$ 9 ex*ange = a contribution to ! capital ( ! p>tn]%ip by any memb] ( su* controll$ gr\p w\ld 79 ! h&s ( su* memb]7 con/itute prop]ty held 9 connection ) a trade or bus9ess1 !n any int]e/ 9 su* p>tn]%ip held by any memb] ( su* gr\p %all be treat$ = purposes ( subp>agraph 7,a7 z con/itut+ 79 ! h&s ( su* memb]7 prop]ty held 9 connection ) a trade or bus9ess4 7ii7 ,controll$ gr\p ( entities ,= purposes ( clause 7i71 ! t]m controll$ gr\p ( entities means a controll$ gr\p ( corporations z def9$ 9 section #aefc7;a77#a71 appli$ )\t reg>d to subsections 7a77#d7 & 7b77#b7 ( section #aefc4 ,a p>tn]%ip or any o!r entity 7o!r ?an a corporation7 %all be treat$ z a memb] ( a controll$ gr\p ( entities if su* entity is controll$ 7)9 ! mean+ ( section #ied7;d77#c77 by memb]s ( su* gr\p 7includ+ any entity treat$ z a memb] ( su* gr\p by reason ( ?is s5t5ce74 7,e7 ,special rule = corporations ,= purposes ( ?is p>agraph1 9 ! case ( a corporation1 ! det]m9ation ( :e!r prop]ty is held 9 connection ) a trade or bus9ess %all be det]m9$ z if ! taxpay] 7 an individual4 7#d7 ,specifi$ asset ,! t]m specifi$ asset means securities 7z def9$ 9 section #dge7;c77#b7 )\t reg>d to ! la/ s5t5ce !re(71 real e/ate held = r5tal or inve/m5t1 int]e/s 9 p>tn]%ips1 commodities 7z def9$ 9 section #dge7;e77#b771 ca% or ca% equival5ts1 or options or d]ivative contracts ) respect to any ( ! =ego+4 7#e7 ,relat$ p]sons 7,a7 ,9 g5]al ,a p]son %all be treat$ z relat$ to ano!r p]son if ! relation%ip betwe5 su* p]sons is describ$ 9 section #bfg7;b7 or #gjg7;b74 7,b7 ,attribution ( p>tn] s]vices ,any s]vice describ$ 9 p>agraph 7#b7 :i* is provid$ by a p>tn] ( a p>tn]%ip %all be treat$ z also provid$ by su* p>tn]%ip4 7d7 ,exception = c]ta9 capital int]e/s 7#a7 ,9 g5]al ,9 ! case ( any portion ( an inve/m5t s]vices p>tn]%ip int]e/ :i* is a qualifi$ capital int]e/1 all items ( ga9 & loss 7& any divid5ds7 :i* are allocat$ to su* qualifi$ capital int]e/ %all n be tak5 into acc\nt "u subsection 7a7 if-- 7,a7 allocations ( items are made by ! p>tn]%ip to su* qualifi$ capital int]e/ 9 ! same mann] z su* allocations are made to o!r qualifi$ capital int]e/s held by p>tn]s :o d n provide any s]vices describ$ 9 subsection 7c77#b7 & :o are n relat$ to ! p>tn] hold+ ! qualifi$ capital int]e/1 & 7,b7 ! allocations made to su* o!r int]e/s are significant comp>$ to ! allocations made to su* qualifi$ capital int]e/4 7#b7 ,au?ority to provide exceptions to allocation requirem5ts ,to ! ext5t provid$ by ! ,secret>y 9 regulations or o!r guidance-- 7,a7 ,allocations to portion ( qualifi$ capital int]e/ ,p>agraph 7#a7 may be appli$ sep>ately ) respect to a portion ( a qualifi$ capital int]e/4 7,b7 ,no or insignificant allocations to nons]vice provid]s ,9 any case 9 :i* ! requirem5ts ( p>agraph 7#a77;,b7 are n satisfi$1 items ( ga9 & loss 7& any divid5ds7 %all n be tak5 into acc\nt "u subsection 7a7 to ! ext5t t su* items are prop]ly allocable "u su* regulations or o!r guidance to qualifi$ capital int]e/s4 7,c7 ,allocations to s]vice provid]s' qualifi$ capital int]e/s :i* are less ?an o!r allocations ,allocations %all n be treat$ z fail+ to meet ! requirem5t ( p>agraph 7#a77;,a7 m]ely because ! allocations to ! qualifi$ capital int]e/ repres5t a l[] return ?an ! allocations made to ! o!r qualifi$ capital int]e/s ref]r$ to 9 su* p>agraph4 7#c7 ,special rule = *anges 9 s]vices & capital contributions ,9 ! case ( an int]e/ 9 a p>tn]%ip :i* 0 n an inve/m5t s]vices p>tn]%ip int]e/ & :i*1 by reason ( a *ange 9 ! s]vices ) respect to assets held 7directly or indirectly7 by ! p>tn]%ip or by reason ( a *ange 9 ! capital contributions to su* p>tn]%ip1 becomes an inve/m5t s]vices p>tn]%ip int]e/1 ! qualifi$ capital int]e/ ( ! hold] ( su* p>tn]%ip int]e/ imm$iately aft] su* *ange %all n1 = purposes ( ?is subsection1 be less ?an ! fair m>ket value ( su* int]e/ 7det]m9$ imm$iately be=e su* *ange74 7#d7 ,special rule = ti]$ p>tn]%ips ,except z o!rwise provid$ by ! ,secret>y1 9 ! case ( ti]$ p>tn]%ips1 all items :i* are allocat$ 9 a mann] :i* meets ! requirem5ts ( p>agraph 7#a7 to qualifi$ capital int]e/s 9 a l[]-ti] p>tn]%ip %all reta9 su* "* to ! ext5t allocat$ on ! basis ( qualifi$ capital int]e/s 9 any upp]-ti] p>tn]%ip4 7#e7 ,exception = no-self-*>g$ c>ry & managem5t fee provisions ,except z o!rwise provid$ by ! ,secret>y1 an int]e/ %all n fail to be treat$ z satisfy+ ! requirem5t ( p>agraph 7#a77;,a7 m]ely because ! allocations made by ! p>tn]%ip to su* int]e/ d n reflect ! co/ ( s]vices describ$ 9 subsection 7c77#b7 :i* are provid$ 7directly or indirectly7 to ! p>tn]%ip by ! hold] ( su* int]e/ 7or a relat$ p]son74 7#f7 ,special rule = dispositions ,9 ! case ( any inve/m5t s]vices p>tn]%ip int]e/ any portion ( :i* is a qualifi$ capital int]e/1 subsection 7b7 %all n apply to s mu* ( any ga9 or loss z be>s ! same proportion to ! entire am\nt ( su* ga9 or loss z-- 7,a7 ! di/ributive %>e ( ga9 or loss t w\ld h be5 allocat$ to ! qualifi$ capital int]e/ 7consi/5t ) ! requirem5ts ( p>agraph 7#a77 if ! p>tn]%ip _h sold all ( its assets at fair m>ket value imm$iately be=e ! disposition1 be>s to 7,b7 ! di/ributive %>e ( ga9 or loss t w\ld h be5 s allocat$ to ! inve/m5t s]vices p>tn]%ip int]e/ ( :i* su* qualifi$ capital int]e/ is a "p4 7#g7 ,qualifi$ capital int]e/ ,= purposes ( ?is section-- 7,a7 ,9 g5]al ,! t]m qualifi$ capital int]e/ means s mu* ( a p>tn]'s int]e/ 9 ! capital ( ! p>tn]%ip z is attributable to-- 7i7 ! fair m>ket value ( any money or o!r prop]ty contribut$ to ! p>tn]%ip 9 ex*ange = su* int]e/ 7det]m9$ )\t reg>d to section #geb7;a771 7ii7 any am\nts :i* h be5 includ$ 9 gross income "u section #hc ) respect to ! transf] ( su* int]e/1 & 7iii7 ! excess 7if any7 (-- 7,i7 any items ( income & ga9 tak5 into acc\nt "u section #gjb ) respect to su* int]e/1 ov] 7,,ii7 any items ( d$uction & loss s tak5 into acc\nt4 7,b7 ,adju/m5t to qualifi$ capital int]e/ 7i7 ,di/ributions & losses ,! qualifi$ capital int]e/ %all be r$uc$ by di/ributions f ! p>tn]%ip ) respect to su* int]e/ & by ! excess 7if any7 ( ! am\nt describ$ 9 subp>agraph 7,a77iii77,,ii7 ov] ! am\nt describ$ 9 subp>agraph 7,a77iii77,i74 7ii7 ,special rule = contributions ( prop]ty ,9 ! case ( any contribution ( prop]ty describ$ 9 subp>agraph 7,a77i7 ) respect to :i* ! fair m>ket value ( su* prop]ty is n equal to ! adju/$ basis ( su* prop]ty imm$iately be=e su* contribution1 prop] adju/m5ts %all be made to ! qualifi$ capital int]e/ to take into acc\nt su* diff]5ce consi/5t ) su* regulations or o!r guidance z ! ,secret>y may provide4 7,c7 ,te*nical t]m9ations1 etc41 disreg>d$ ,no increase or decrease 9 ! qualifi$ capital int]e/ ( any p>tn] %all result f a t]m9ation1 m]g]1 consolidation1 or division describ$ 9 section #gjh1 or any simil> transaction4 7#h7 ,treatm5t ( c]ta9 loans 7,a7 ,proce$s ( p>tn]%ip loans n treat$ z qualifi$ capital int]e/ ( s]vice provid+ p>tn]s ,= purposes ( ?is subsection1 an inve/m5t s]vices p>tn]%ip int]e/ %all n be treat$ z a qualifi$ capital int]e/ to ! ext5t t su* int]e/ is acquir$ 9 connection ) ! proce$s ( any loan or o!r advance made or gu>ante$1 directly or indirectly1 by any o!r p>tn] or ! p>tn]%ip 7or any p]son relat$ to any su* o!r p>tn] or ! p>tn]%ip74 ,! prec$+ s5t5ce %all n apply to ! ext5t ! loan or o!r advance is repaid be=e ! date ( ! enactm5t ( ?is section unless su* repaym5t is made ) ! proce$s ( a loan or o!r advance describ$ 9 ! prec$+ s5t5ce4 7,b7 ,r$uction 9 allocations to qualifi$ capital int]e/s = loans f nons]vice-provid+ p>tn]s to ! p>tn]%ip ,= purposes ( ?is subsection1 any loan or o!r advance to ! p>tn]%ip made or gu>ante$1 directly or indirectly1 by a p>tn] n provid+ s]vices describ$ 9 subsection 7c77#b7 to ! p>tn]%ip 7or any p]son relat$ to su* p>tn]7 %all be tak5 into acc\nt 9 det]m9+ ! qualifi$ capital int]e/s ( ! p>tn]s 9 ! p>tn]%ip4 7e7 ,o!r income & ga9 9 connection ) inve/m5t managem5t s]vices 7#a7 ,9 g5]al ,if-- 7,a7 a p]son p]=ms 7directly or indirectly7 inve/m5t managem5t s]vices = any inve/m5t entity1 7,b7 su* p]son holds 7directly or indirectly7 a disqualifi$ int]e/ ) respect to su* entity1 & 7,c7 ! value ( su* int]e/ 7or paym5ts !reund]7 is sub/antially relat$ to ! am\nt ( income or ga9 7:e!r or n realiz$7 f ! assets ) respect to :i* ! inve/m5t managem5t s]vices are p]=m$1 any income or ga9 ) respect to su* int]e/ %all be treat$ z ord9>y income4 ,rules simil> to ! rules ( subsections 7a77#e7 & 7d7 %all apply = purposes ( ?is subsection4 7#b7 ,def9itions ,= purposes ( ?is subsection-- 7,a7 ,disqualifi$ int]e/ 7i7 ,9 g5]al ,! t]m disqualifi$ int]e/ means1 ) respect to any inve/m5t entity-- 7,i7 any int]e/ 9 su* entity o!r ?an indebt$ness1 7,,ii7 conv]tible or cont+5t debt ( su* entity1 7,,iii7 any option or o!r "r to acquire prop]ty describ$ 9 subclause 7,i7 or 7,,ii71 & 7,,iv7 any d]ivative in/rum5t ent]$ into 7directly or indirectly7 ) su* entity or any inve/or 9 su* entity4 7ii7 ,exceptions ,su* t]m %all n include-- 7,i7 a p>tn]%ip int]e/1 7,,ii7 except z provid$ by ! ,secret>y1 any int]e/ 9 a taxable corporation1 & 7,,iii7 except z provid$ by ! ,secret>y1 /ock 9 an ,s corporation4 7,b7 ,taxable corporation ,! t]m taxable corporation means-- 7i7 a dome/ic ,c corporation1 or 7ii7 a =eign corporation sub/antially all ( ! income ( :i* is-- 7,i7 effectively connect$ ) ! conduct ( a trade or bus9ess 9 ! ,unit$ ,/ates1 or 7,,ii7 subject to a compreh5sive =eign income tax 7z def9$ 9 section #deg;,a7d77#b774 7,c7 ,inve/m5t managem5t s]vices ,! t]m inve/m5t managem5t s]vices means a sub/antial quantity ( any ( ! s]vices describ$ 9 subsection 7c77#b74 7,d7 ,inve/m5t entity ,! t]m inve/m5t entity means any entity :i*1 if x 7 a p>tn]%ip1 w\ld be an inve/m5t p>tn]%ip4 7f7 ,regulations ,! ,secret>y %all prescribe su* regulations or o!r guidance z is necess>y or appropriate to c>ry out ! purposes ( ?is section1 includ+ regulations or o!r guidance to-- 7#a7 provide modifications to ! application ( ?is section 7includ+ treat+ relat$ p]sons z n relat$ to "o ano!r7 to ! ext5t su* modification is consi/5t ) ! purposes ( ?is section1 7#b7 prev5t ! avoidance ( ! purposes ( ?is section1 & 7#c7 coord9ate ?is section ) ! o!r provisions ( ?is title4 7g7 ,cross-,ref]5ce ,= #dj p]c5t p5alty on c]ta9 und]paym5ts due to ! avoidance ( ?is section1 see section #fffb4 4 7b7 ,application ( section #gea to indirect dispositions ( inve/m5t s]vices p>tn]%ip int]e/s 7#a7 ,9 g5]al ,subsection 7a7 ( section #gea is am5d$ by /rik+ or at ! end ( p>agraph 7#a71 by ins]t+ or at ! end ( p>agraph 7#b71 & by ins]t+ aft] p>agraph 7#b7 ! foll[+ new p>agraph3 7#c7 inve/m5t s]vices p>tn]%ip int]e/s held by ! p>tn]%ip1 4 7#b7 ,c]ta9 di/ributions treat$ z sales or ex*anges ,subp>agraph 7,a7 ( section #gea7;b77#a7 is am5d$ by /rik+ or at ! end ( clause 7i71 by ins]t+ or at ! end ( clause 7ii71 & by ins]t+ aft] clause 7ii7 ! foll[+ new clause3 7iii7 inve/m5t s]vices p>tn]%ip int]e/s held by ! p>tn]%ip1 4 7#c7 ,application ( special rules 9 ! case ( ti]$ p>tn]%ips ,subsection 7f7 ( section #gea is am5d$-- 7,a7 by /rik+ or at ! end ( p>agraph 7#a71 by ins]t+ or at ! end ( p>agraph 7#b71 & by ins]t+ aft] p>agraph 7#b7 ! foll[+ new p>agraph3 7#c7 an inve/m5t s]vices p>tn]%ip int]e/ held by ! p>tn]%ip1 1 & 7,b7 by /rik+ p>tn]4 & ins]t+ p>tn] 7o!r ?an a p>tn]%ip 9 :i* x holds an inve/m5t s]vices p>tn]%ip int]e/744 7#d7 ,inve/m5t s]vices p>tn]%ip int]e/s2 qualifi$ capital int]e/s ,section #gea is am5d$ by add+ at ! end ! foll[+ new subsection3 7g7 ,inve/m5t s]vices p>tn]%ip int]e/s ,= purposes ( ?is section-- 7#a7 ,9 g5]al ,! t]m inve/m5t s]vices p>tn]%ip int]e/ has ! mean+ giv5 su* t]m by section #gaj7;c74 7#b7 ,adju/m5ts = qualifi$ capital int]e/s ,! am\nt to :i* subsection 7a7 applies by reason ( p>agraph 7#c7 !re( %all n include s mu* ( su* am\nt z is attributable to any portion ( ! inve/m5t s]vices p>tn]%ip int]e/ :i* is a qualifi$ capital int]e/ 7det]m9$ "u rules simil> to ! rules ( section #gaj7;d774 7#c7 ,exception = publicly trad$ p>tn]%ips ,9 ! case ( an ex*ange ( an int]e/ 9 a publicly trad$ p>tn]%ip 7z def9$ 9 section #ggjd7 to :i* subsection 7a7 applies-- 7,a7 ?is section %all be appli$ )\t reg>d to subsections 7a77#c71 7b77#a77;,a77iii71 & 7f77#c71 & 7,b7 su* p>tn]%ip %all be treat$ z own+ its proportionate %>e ( ! prop]ty ( any o!r p>tn]%ip 9 :i* x is a p>tn]4 7#d7 ,recognition ( ga9s ,any ga9 ) respect to :i* subsection 7a7 applies by reason ( p>agraph 7#c7 !re( %all be recogniz$ not)/&+ any o!r provision ( ?is title4 7#e7 ,coord9ation ) inv5tory items ,an inve/m5t s]vices p>tn]%ip int]e/ held by ! p>tn]%ip %all n be treat$ z an inv5tory item ( ! p>tn]%ip4 7#f7 ,prev5tion ( d\ble c\nt+ ,"u regulations or o!r guidance prescrib$ by ! ,secret>y1 subsection 7a77#c7 %all n apply ) respect to any am\nt to :i* section #gaj applies4 7#g7 ,valuation me?ods ,! ,secret>y %all prescribe regulations or o!r guidance :i* provide ! acceptable me?ods = valu+ inve/m5t s]vices p>tn]%ip int]e/s = purposes ( ?is section4 4 7c7 ,treatm5t = purposes ( section #ggjd ,subsection 7d7 ( section #ggjd is am5d$ by add+ at ! end ! foll[+ new p>agraph3 7#f7 ,income f c]ta9 c>ri$ int]e/s n qualifi$ 7,a7 ,9 g5]al ,specifi$ c>ri$ int]e/ income %all n be treat$ z qualify+ income4 7,b7 ,specifi$ c>ri$ int]e/ income ,= purposes ( ?is p>agraph-- 7i7 ,9 g5]al ,! t]m specifi$ c>ri$ int]e/ income means-- 7,i7 any item ( income or ga9 allocat$ to an inve/m5t s]vices p>tn]%ip int]e/ 7z def9$ 9 section #gaj7;c77 held by ! p>tn]%ip1 7,,ii7 any ga9 on ! disposition ( an inve/m5t s]vices p>tn]%ip int]e/ 7z s def9$7 or a p>tn]%ip int]e/ to :i* 79 ! h&s ( ! p>tn]%ip7 section #gea applies1 & 7,,iii7 any income or ga9 tak5 into acc\nt by ! p>tn]%ip "u subsection 7b77#d7 or 7e7 ( section #gaj4 7ii7 ,exception = qualifi$ capital int]e/s ,a rule simil> to ! rule ( section #gaj7;d7 %all apply = purposes ( clause 7i74 7,c7 ,coord9ation ) o!r provisions ,subp>agraph 7,a7 %all n apply to any item describ$ 9 p>agraph 7#a77;,e7 7or s mu* ( p>agraph 7#a77;,f7 z relates to p>agraph 7#a77;,e774 7,d7 ,special rules = c]ta9 p>tn]%ips 7i7 ,c]ta9 p>tn]%ips own$ by real e/ate inve/m5t tru/s ,subp>agraph 7,a7 %all n apply 9 ! case ( a p>tn]%ip :i* meets ea* ( ! foll[+ requirem5ts3 7,i7 ,su* p>tn]%ip is treat$ z publicly trad$ "u ?is section solely by reason ( int]e/s 9 su* p>tn]%ip be+ conv]tible into int]e/s 9 a real e/ate inve/m5t tru/ :i* is publicly trad$4 7,,ii7 ,fifty p]c5t or m ( ! capital & pr(its int]e/s ( su* p>tn]%ip are own$1 directly or indirectly1 at all times dur+ ! taxable ye> by su* real e/ate inve/m5t tru/ 7det]m9$ ) ! application ( section #bfg7;c774 7,,iii7 ,su* p>tn]%ip meets ! requirem5ts ( p>agraphs 7#b71 7#c71 & 7#d7 ( section #hef7;c74 7ii7 ,c]ta9 p>tn]%ips own+ o!r publicly trad$ p>tn]%ips ,subp>agraph 7,a7 %all n apply 9 ! case ( a p>tn]%ip :i* meets ea* ( ! foll[+ requirem5ts3 7,i7 ,sub/antially all ( ! assets ( su* p>tn]%ip consi/ ( int]e/s 9 "o or m publicly trad$ p>tn]%ips 7det]m9$ )\t reg>d to subsection 7b77#b774 7,,ii7 ,sub/antially all ( ! income ( su* p>tn]%ip is ord9>y income or section #abca ga9 7z def9$ 9 section #abca7;a77#c774 7,e7 ,transitional rule ,subp>agraph 7,a7 %all n apply to any taxable ye> ( ! p>tn]%ip beg9n+ be=e ! date :i* is #aj ye>s aft] ! date ( ! enactm5t ( ?is p>agraph4 4 7d7 ,imposition ( p5alty on und]paym5ts 7#a7 ,9 g5]al ,subsection 7b7 ( section #fffb is am5d$ by ins]t+ aft] p>agraph 7#g7 ! foll[+ new p>agraph3 7#h7 ,! application ( section #gaj7;e7 or ! regulations or o!r guidance prescrib$ "u section #gaj7;f7 to prev5t ! avoidance ( ! purposes ( section #gaj4 4 7#b7 ,am\nt ( p5alty 7,a7 ,9 g5]al ,section #fffb is am5d$ by add+ at ! end ! foll[+ new subsection3 7k7 ,increase 9 p5alty 9 case ( prop]ty transf]r$ = inve/m5t managem5t s]vices ,9 ! case ( any portion ( an und]paym5t to :i* ?is section applies by reason ( subsection 7b77#h71 subsection 7a7 %all be appli$ ) respect to su* portion by sub/itut+ #dj p]c5t = #bj p]c5t4 4 7,b7 ,con=m+ am5dm5t ,subp>agraph 7,b7 ( section #fffb;,a7e77#b7 is am5d$ by /rik+ or 7i7 & ins]t+ 1 7i71 or 7k74 7#c7 ,special rules = application ( reasonable cause exception ,subsection 7c7 ( section #fffd is am5d$-- 7,a7 by r$esignat+ p>agraphs 7#c7 & 7#d7 z p>agraphs 7#d7 & 7#e71 respectively2 7,b7 by /rik+ p>agraph 7#c7 9 p>agraph 7#e77;,a71 z s r$esignat$1 & ins]t+ p>agraph 7#d72 & 7,c7 by ins]t+ aft] p>agraph 7#b7 ! foll[+ new p>agraph3 7#c7 ,special rule = und]paym5ts attributable to inve/m5t managem5t s]vices 7,a7 ,9 g5]al ,p>agraph 7#a7 %all n apply to any portion ( an und]paym5t to :i* section #fffb applies by reason ( subsection 7b77#h7 unless-- 7i7 ! relevant facts affect+ ! tax treatm5t ( ! item are adequately disclos$1 7ii7 !re is or 0 sub/antial au?ority = su* treatm5t1 & 7iii7 ! taxpay] reasonably believ$ t su* treatm5t 0 m likely ?an n ! prop] treatm5t4 7,b7 ,rules relat+ to reasonable belief ,rules simil> to ! rules ( subsection 7d77#c7 %all apply = purposes ( subp>agraph 7,a77iii74 4 7e7 ,income & loss f inve/m5t s]vices p>tn]%ip int]e/s tak5 into acc\nt 9 det]m9+ net e>n+s f self-,employm5t 7#a7 ,int]nal ,rev5ue ,code 7,a7 ,9 g5]al ,section #adjb7;a7 is am5d$ by /rik+ & at ! end ( p>agraph 7#af71 by /rik+ ! p]iod at ! end ( p>agraph 7#ag7 & ins]t+ 2 &1 & by ins]t+ aft] p>agraph 7#ag7 ! foll[+ new p>agraph3 7#ah7 not)/&+ ! prec$+ provisions ( ?is subsection1 9 ! case ( any individual engag$ 9 ! trade or bus9ess ( provid+ s]vices describ$ 9 section #gaj7;c77#b7 ) respect to any entity1 inve/m5t s]vices p>tn]%ip income or loss 7z def9$ 9 subsection 7m77 ( su* individual ) respect to su* entity %all be tak5 into acc\nt 9 det]m9+ ! net e>n+s f self-employm5t ( su* individual4 4 7,b7 ,inve/m5t s]vices p>tn]%ip income or loss ,section #adjb is am5d$ by add+ at ! end ! foll[+ new subsection3 7m7 ,inve/m5t s]vices p>tn]%ip income or loss ,= purposes ( subsection 7a7-- 7#a7 ,9 g5]al ,! t]m inve/m5t s]vices p>tn]%ip income or loss means1 ) respect to any inve/m5t s]vices p>tn]%ip int]e/ 7z def9$ 9 section #gaj7;c77 or disqualifi$ int]e/ 7z def9$ 9 section #gaj7;e771 ! net (-- 7,a7 ! am\nts treat$ z ord9>y income or ord9>y loss "u subsections 7b7 & 7e7 ( section #gaj ) respect to su* int]e/1 7,b7 all items ( income1 ga91 loss1 & d$uction allocat$ to su* int]e/1 & 7,c7 ! am\nts treat$ z realiz$ f ! sale or ex*ange ( prop]ty o!r ?an a capital asset "u section #gea ) respect to su* int]e/4 7#b7 ,exception = qualifi$ capital int]e/s ,a rule simil> to ! rule ( section #gaj7;d7 %all apply = purposes ( apply+ p>agraph 7#a77;,b74 4 7#b7 ,social ,security ,act ,section #baa7;a7 ( ! ,social ,security ,act is am5d$ by /rik+ & at ! end ( p>agraph 7#ae71 by /rik+ ! p]iod at ! end ( p>agraph 7#af7 & ins]t+ 2 &1 & by ins]t+ aft] p>agraph 7#af7 ! foll[+ new p>agraph3 7#ag7 ,not)/&+ ! prec$+ provisions ( ?is subsection1 9 ! case ( any individual engag$ 9 ! trade or bus9ess ( provid+ s]vices describ$ 9 section #gaj7;c77#b7 ( ! ,int]nal ,rev5ue ,code ( #aihf ) respect to any entity1 inve/m5t s]vices p>tn]%ip income or loss 7z def9$ 9 section #adjb7m7 ( su* ,code7 %all be tak5 into acc\nt 9 det]m9+ ! net e>n+s f self-employm5t ( su* individual4 4 7f7 ,con=m+ am5dm5ts 7#a7 ,subsection 7d7 ( section #gca is am5d$ by ins]t+ section #gaj7;b77#d7 7relat+ to di/ributions ( p>tn]%ip prop]ty71 aft] to ! ext5t o!rwise provid$ by4 7#b7 ,section #gda is am5d$ by ins]t+ or section #gaj 7relat+ to special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips7 be=e ! p]iod at ! end4 7#c7 ,! table ( sections = "p ,i ( sub*apt] ,k ( *apt] #a is am5d$ by add+ at ! end ! foll[+ new item3 ,sec4 #gaj4 ,special rules = p>tn]s provid+ inve/m5t managem5t s]vices to p>tn]%ips4 4 7g7 ,effective date 7#a7 ,9 g5]al ,except z o!rwise provid$ 9 ?is subsection1 ! am5dm5ts made by ?is section %all apply to taxable ye>s end+ aft] ! date ( ! enactm5t ( ?is ,act4 7#b7 ,p>tn]%ip taxable ye>s :i* include effective date ,9 apply+ section #gaj7;a7 ( ! ,int]nal ,rev5ue ,code ( #aihf 7z add$ by ?is section7 9 ! case ( any p>tn]%ip taxable ye> :i* includes ! date ( ! enactm5t ( ?is ,act1 ! am\nt ( ! net capital ga9 ref]r$ to 9 su* section %all be treat$ z be+ ! less] ( ! net capital ga9 = ! entire p>tn]%ip taxable ye> or ! net capital ga9 det]m9$ by only tak+ into acc\nt items attributable to ! portion ( ! p>tn]%ip taxable ye> :i* is aft] su* date4 7#c7 ,dispositions ( p>tn]%ip int]e/s 7,a7 ,9 g5]al ,section #gaj7;b7 ( su* ,code 7z add$ by ?is section7 %all apply to dispositions & di/ributions aft] ! date ( ! enactm5t ( ?is ,act4 7,b7 ,indirect dispositions ,! am5dm5ts made by subsection 7b7 %all apply to transactions aft] ! date ( ! enactm5t ( ?is ,act4 7#d7 ,o!r income & ga9 9 connection ) inve/m5t managem5t s]vices ,section #gaj7;e7 ( su* ,code 7z add$ by ?is section7 %all take effect on ! date ( ! enactm5t ( ?is ,act4