,,ii #aafth ,,congress #ast ,session ,s4 #ggi ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #ac1 #bjai,mr4 ,whitehouse 7for himself and ,mrs4 ,shaheen7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to end offshore corporate tax avoidance1 and for other purposes4 #a4 ,short title1 etc 7a7 ,short title ,this ,act may be cited as the ,stop ,tax ,haven ,abuse ,act4 7b7 ,amendment of #aihf code ,except as otherwise expressly provided1 whenever in this ,act an amendment or repeal is expressed in terms of an amendment to1 or repeal of1 a section or other provision1 the reference shall be considered to be made to a section or other provision of the ,internal ,revenue ,code of #aihf4 7c7 ,table of contents ,the table of contents of this ,act is as follows3 ,sec4 #a4 ,short title1 etc4,title ,i--,ending corporate offshore tax avoidance,sec4 #aja4 ,repeal of check-the-box rules for certain foreign entities and ,,cfc look-thru rules4,sec4 #ajb4 ,limitation on deduction of interest by domestic corporations which are members of an international financial reporting group4,sec4 #ajc4 ,treatment of foreign corporations managed and controlled in the ,united ,states as domestic corporations4,sec4 #ajd4 ,swap payments made from the ,united ,states to persons offshore4,sec4 #aje4 ,modifications to rules relating to inverted corporations4,sec4 #ajf4 ,requirement to disclose total corporate taxes paid4,sec4 #ajg4 ,penalty for election to pay tax on deferred foreign income in installments4,title ,,ii--,additional measures to combat tax evasion,sec4 #bja4 ,authorizing special measures against foreign jurisdictions1 financial institutions1 and others that significantly impede ,united ,states tax enforcement4,sec4 #bjb4 ,strengthening the ,foreign ,account ,tax ,compliance ,act 7,,fatca74,sec4 #bjc4 ,reporting ,united ,states beneficial owners of foreign owned financial accounts4,sec4 #bjd4 ,penalty for failing to disclose offshore holdings4,sec4 #bje4 ,deadline for anti-money laundering rule for investment advisers4,sec4 #bjf4 ,anti-money laundering requirements for formation agents4,sec4 #bjg4 ,strengthening ,john ,doe summons proceedings4,sec4 #bjh4 ,improving enforcement of foreign financial account reporting4 ,i ,ending corporate offshore tax avoidance #aja4 ,repeal of check-the-box rules for certain foreign entities and ,,cfc look-thru rules 7a7 ,check-the-,box rules ,paragraph 7#c7 of section #ggja7;a7 is amended-- 7#a7 by striking and1 and 7#b7 by inserting after insurance companies the following3 1 and any foreign business entity that-- 7,a7 has a single owner that does not have limited liability1 or 7,b7 has one or more members all of which have limited liability 4 7b7 ,look-,thru rule ,subparagraph 7,c7 of section #ied7;c77#f7 is amended to read as follows3 7,c7 ,termination ,subparagraph 7,a7 shall not apply to dividends1 interest1 rents1 and royalties received or accrued after the date of the enactment of the ,stop ,tax ,haven ,abuse ,act4 4 7c7 ,effective date 7#a7 ,the amendments made by subsection 7a7 shall take effect on the date of the enactment of this ,act4 7#b7 ,the amendment made by subsection 7b7 shall apply to payments received after the date of the enactment of this ,act4 #ajb4 ,limitation on deduction of interest by domestic corporations which are members of an international financial reporting group 7a7 ,in general ,section #afc is amended by redesignating subsection 7n7 as subsection 7p7 and by inserting after subsection 7m7 the following new subsection3 7n7 ,limitation on deduction of interest by domestic corporations in international financial reporting groups 7#a7 ,in general ,in the case of any domestic corporation which is a member of any international financial reporting group1 the deduction under this chapter for interest paid or accrued during the taxable year shall not exceed the sum of-- 7,a7 the allowable percentage of #aaj percent of the excess 7if any7 of-- 7i7 the amount of such interest so paid or accrued1 over 7ii7 the amount described in subparagraph 7,b71 plus 7,b7 the amount of interest includible in gross income of such corporation for such taxable year4 7#b7 ,international financial reporting group 7,a7 ,for purposes of this subsection1 the term international financial reporting group means1 with respect to any reporting year1 any group of entities which-- 7i7 includes-- 7,i7 at least one foreign corporation engaged in a trade or business within the ,united ,states1 or 7,,ii7 at least one domestic corporation and one foreign corporation1 7ii7 prepares consolidated financial statements with respect to such year1 and 7iii7 reports in such statements average annual gross receipts 7determined in the aggregate with respect to all entities which are part of such group7 for the #c-reporting-year period ending with such reporting year in excess of #ajj1jjj1jjj4 7,b7 ,rules relating to determination of average gross receipts ,for purposes of subparagraph 7,a77iii71 rules similar to the rules of section #ddh7;c77#c7 shall apply4 7#c7 ,allowable percentage ,for purposes of this subsection-- 7,a7 ,in general ,the term allowable percentage means1 with respect to any domestic corporation for any taxable year1 the ratio 7expressed as a percentage and not greater than #ajj percent7 of-- 7i7 such corporation's allocable share of the international financial reporting group's reported net interest expense for the reporting year of such group which ends in or with such taxable year of such corporation1 over 7ii7 such corporation's reported net interest expense for such reporting year of such group4 7,b7 ,reported net interest expense ,the term reported net interest expense means-- 7i7 with respect to any international financial reporting group for any reporting year1 the excess of-- 7,i7 the aggregate amount of interest expense reported in such group's consolidated financial statements for such taxable year1 over 7,,ii7 the aggregate amount of interest income reported in such group's consolidated financial statements for such taxable year1 and 7ii7 with respect to any domestic corporation for any reporting year1 the excess of-- 7,i7 the amount of interest expense of such corporation reported in the books and records of the international financial reporting group which are used in preparing such group's consolidated financial statements for such taxable year1 over 7,,ii7 the amount of interest income of such corporation reported in such books and records4 7,c7 ,allocable share of reported net interest expense ,with respect to any domestic corporation which is a member of any international financial reporting group1 such corporation's allocable share of such group's reported net interest expense for any reporting year is the portion of such expense which bears the same ratio to such expense as-- 7i7 the ,,ebitda of such corporation for such reporting year1 bears to 7ii7 the ,,ebitda of such group for such reporting year4 7,d7 ,,ebitda 7i7 ,in general ,the term ,,ebitda means1 with respect to any reporting year1 earnings before interest1 taxes1 depreciation1 and amortization-- 7,i7 as determined in the international financial reporting group's consolidated financial statements for such year1 or 7,,ii7 for purposes of subparagraph 7,a77i71 as determined in the books and records of the international financial reporting group which are used in preparing such statements if not determined in such statements4 7ii7 ,treatment of disregarded entities ,the ,,ebitda of any domestic corporation shall not fail to include the ,,ebitda of any entity which is disregarded for purposes of this chapter4 7iii7 ,treatment of intra-group distributions ,the ,,ebitda of any domestic corporation shall be determined without regard to any distribution received by such corporation from any other member of the international financial reporting group4 7,e7 ,special rules for non-positive ,,ebitda 7i7 ,non-positive group ,,ebitda ,in the case of any international financial reporting group the ,,ebitda of which is zero or less1 paragraph 7#a7 shall not apply to any member of such group the ,,ebitda of which is above zero4 7ii7 ,non-positive entity ,,ebitda ,in the case of any group member the ,,ebitda of which is zero or less1 paragraph 7#a7 shall be applied without regard to subparagraph 7,a7 thereof4 7#d7 ,consolidated financial statement ,for purposes of this subsection1 the term consolidated financial statement means any consolidated financial statement described in paragraph 7#b77;,a77ii7 if such statement is-- 7,a7 a financial statement which is certified as being prepared in accordance with generally accepted accounting principles1 international financial reporting standards1 or any other comparable method of accounting identified by the ,secretary1 and which is-- 7i7 a #aj-,k 7or successor form71 or annual statement to shareholders1 required to be filed with the ,united ,states ,securities and ,exchange ,commission1 7ii7 an audited financial statement which is used for-- 7,i7 credit purposes1 7,,ii7 reporting to shareholders1 partners1 or other proprietors1 or to beneficiaries1 or 7,,iii7 any other substantial nontax purpose1 but only if there is no statement described in clause 7i71 or 7iii7 filed with any other ,federal or ,state agency for nontax purposes1 but only if there is no statement described in clause 7i7 or 7ii71 or 7,b7 a financial statement which-- 7i7 is used for a purpose described in subclause 7,i71 7,,ii71 or 7,,iii7 of subparagraph 7,a77ii71 or 7ii7 filed with any regulatory or governmental body 7whether domestic or foreign7 specified by the ,secretary1 but only if there is no statement described in subparagraph 7,a74 7#e7 ,reporting year ,for purposes of this subsection1 the term reporting year means1 with respect to any international financial reporting group1 the year with respect to which the consolidated financial statements are prepared4 7#f7 ,application to certain entities 7,a7 ,partnerships ,except as otherwise provided by the ,secretary in paragraph 7#g71 this subsection and subsection 7o7 shall apply to any partnership which is a member of any international financial reporting group under rules similar to the rules of section #afc7;j77#d74 7,b7 ,foreign corporations engaged in trade or business within the ,united ,states ,except as otherwise provided by the ,secretary in paragraph 7#g71 any deduction for interest paid or accrued by a foreign corporation engaged in a trade or business within the ,united ,states shall be limited in a manner consistent with the principles of this subsection4 7,c7 ,consolidated groups ,for purposes of this subsection1 the members of any group that file 7or are required to file7 a consolidated return with respect to the tax imposed by chapter #a for a taxable year shall be treated as a single corporation4 7#g7 ,regulations ,the ,secretary may issue such regulations or other guidance as are necessary or appropriate to carry out the purposes of this subsection4 4 7b7 ,carryforward of disallowed interest 7#a7 ,in general ,section #afc is amended by inserting after subsection 7n71 as added by subsection 7a71 the following new subsection3 7o7 ,carryforward of certain disallowed interest ,the amount of any interest not allowed as a deduction for any taxable year by reason of subsection 7j77#a7 or 7n77#a7 7whichever imposes the lower limitation with respect to such taxable year7 shall be treated as interest 7and as business interest for purposes of subsection 7j77#a77 paid or accrued in the succeeding taxable year4 ,interest paid or accrued in any taxable year 7determined without regard to the preceding sentence7 shall not be carried past the fifth taxable year following such taxable year1 determined by treating interest as allowed as a deduction on a first-in1 first-out basis4 4 7#b7 ,conforming amendments 7,a7 ,section #afc7;j77#b7 is amended to read as follows3 7#b7 ,carryforward cross-reference ,for carryforward treatment1 see subsection 7o74 4 7,b7 ,section #afc7;j77#d77;,b77i77,i7 is amended by striking paragraph 7#b7 and inserting subsection 7o74 7,c7 ,section #cha7;c77#bj7 is amended to read as follows3 7#bj7 ,carryforward of disallowed interest ,the carryover of disallowed interest described in section #afc7o7 to taxable years ending after the date of distribution or transfer4 4 7,d7 ,section #chb7;d77#c7 is amended to read as follows3 7#c7 ,application to carryforward of disallowed interest ,the term pre-change loss shall include any carryover of disallowed interest described in section #afc7o7 under rules similar to the rules of paragraph 7#a74 4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjah4 #ajc4 ,treatment of foreign corporations managed and controlled in the ,united ,states as domestic corporations 7a7 ,in general ,section #ggja is amended by redesignating subsection 7p7 as subsection 7q7 and by inserting after subsection 7o7 the following new subsection3 7p7 ,certain corporations managed and controlled in the ,united ,states treated as domestic for income tax 7#a7 ,in general ,notwithstanding subsection 7a77#d71 in the case of a corporation described in paragraph 7#b7 if-- 7,a7 the corporation would not otherwise be treated as a domestic corporation for purposes of this title1 but 7,b7 the management and control of the corporation occurs1 directly or indirectly1 primarily within the ,united ,states1 then1 solely for purposes of chapter #a 7and any other provision of this title relating to chapter #a71 the corporation shall be treated as a domestic corporation4 7#b7 ,corporation described 7,a7 ,in general ,a corporation is described in this paragraph if-- 7i7 the stock of such corporation is regularly traded on an established securities market1 or 7ii7 the aggregate gross assets of such corporation 7or any predecessor thereof71 including assets under management for investors1 whether held directly or indirectly1 at any time during the taxable year or any preceding taxable year is #ej1jjj1jjj or more4 7,b7 ,general exception ,a corporation shall not be treated as described in this paragraph if-- 7i7 such corporation was treated as a corporation described in this paragraph in a preceding taxable year1 7ii7 such corporation-- 7,i7 is not regularly traded on an established securities market1 and 7,,ii7 has1 and is reasonably expected to continue to have1 aggregate gross assets 7including assets under management for investors1 whether held directly or indirectly7 of less than #ej1jjj1jjj1 and 7iii7 the ,secretary grants a waiver to such corporation under this subparagraph4 7#c7 ,management and control 7,a7 ,in general ,the ,secretary shall prescribe regulations for purposes of determining cases in which the management and control of a corporation is to be treated as occurring primarily within the ,united ,states4 7,b7 ,executive officers and senior management ,such regulations shall provide that-- 7i7 the management and control of a corporation shall be treated as occurring primarily within the ,united ,states if substantially all of the executive officers and senior management of the corporation who exercise day-to-day responsibility for making decisions involving strategic1 financial1 and operational policies of the corporation are located primarily within the ,united ,states1 and 7ii7 individuals who are not executive officers and senior management of the corporation 7including individuals who are officers or employees of other corporations in the same chain of corporations as the corporation7 shall be treated as executive officers and senior management if such individuals exercise the day-to-day responsibilities of the corporation described in clause 7i74 7,c7 ,corporations primarily holding investment assets ,such regulations shall also provide that the management and control of a corporation shall be treated as occurring primarily within the ,united ,states if-- 7i7 the assets of such corporation 7directly or indirectly7 consist primarily of assets being managed on behalf of investors1 and 7ii7 decisions about how to invest the assets are made in the ,united ,states4 4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning on or after the date which is #b years after the date of the enactment of this ,act1 whether or not regulations are issued under section #ggja7p77#c7 of the ,internal ,revenue ,code of #aihf1 as added by this section4 #ajd4 ,swap payments made from the ,united ,states to persons offshore 7a7 ,tax on swap payments received by foreign persons ,section #hga7;a77#a7 is amended-- 7#a7 by inserting swap payments 7as identified in section #abef7;b77#b77;,b771 after annuities1 in subparagraph 7,a71 and 7#b7 by adding at the end the following new sentence3 ,in the case of swap payments1 the source of a swap payment is determined by reference to the location of the payor44 7b7 ,tax on swap payments received by foreign corporations ,section #hha7;a7 is amended-- 7#a7 by inserting swap payments 7as identified in section #abef7;b77#b77;,b771 after annuities1 in paragraph 7#a71 and 7#b7 by adding at the end the following new sentence3 ,in the case of swap payments1 the source of a swap payment is determined by reference to the location of the payor44 #aje4 ,modifications to rules relating to inverted corporations 7a7 ,in general ,subsection 7b7 of section #ghgd is amended to read as follows3 7b7 ,inverted corporations treated as domestic corporations 7#a7 ,in general ,notwithstanding section #ggja7;a77#d71 a foreign corporation shall be treated for purposes of this title as a domestic corporation if-- 7,a7 such corporation would be a surrogate foreign corporation if subsection 7a77#b7 were applied by substituting #hj percent for #fj percent1 or 7,b7 such corporation is an inverted domestic corporation4 7#b7 ,inverted domestic corporation ,for purposes of this subsection1 a foreign corporation shall be treated as an inverted domestic corporation if1 pursuant to a plan 7or a series of related transactions7-- 7,a7 the entity completes after ,december #bb1 #bjag1 the direct or indirect acquisition of-- 7i7 substantially all of the properties held directly or indirectly by a domestic corporation1 or 7ii7 substantially all of the assets of1 or substantially all of the properties constituting a trade or business of1 a domestic partnership1 and 7,b7 after the acquisition1 either-- 7i7 more than #ej percent of the stock 7by vote or value7 of the entity is held-- 7,i7 in the case of an acquisition with respect to a domestic corporation1 by former shareholders of the domestic corporation by reason of holding stock in the domestic corporation1 or 7,,ii7 in the case of an acquisition with respect to a domestic partnership1 by former partners of the domestic partnership by reason of holding a capital or profits interest in the domestic partnership1 or 7ii7 the management and control of the expanded affiliated group which includes the entity occurs1 directly or indirectly1 primarily within the ,united ,states1 and such expanded affiliated group has significant domestic business activities4 7#c7 ,exception for corporations with substantial business activities in foreign country of organization ,a foreign corporation described in paragraph 7#b7 shall not be treated as an inverted domestic corporation if after the acquisition the expanded affiliated group which includes the entity has substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group4 ,for purposes of subsection 7a77#b77;,b77iii7 and the preceding sentence1 the term substantial business activities shall have the meaning given such term under regulations in effect on ,december #bb1 #bjag1 except that the ,secretary may issue regulations increasing the threshold percent in any of the tests under such regulations for determining if business activities constitute substantial business activities for purposes of this paragraph4 7#d7 ,management and control ,for purposes of paragraph 7#b77;,b77ii7-- 7,a7 ,in general ,the ,secretary shall prescribe regulations for purposes of determining cases in which the management and control of an expanded affiliated group is to be treated as occurring1 directly or indirectly1 primarily within the ,united ,states4 ,the regulations prescribed under the preceding sentence shall apply to periods after ,december #bb1 #bjag4 7,b7 ,executive officers and senior management ,such regulations shall provide that the management and control of an expanded affiliated group shall be treated as occurring1 directly or indirectly1 primarily within the ,united ,states if substantially all of the executive officers and senior management of the expanded affiliated group who exercise day-to-day responsibility for making decisions involving strategic1 financial1 and operational policies of the expanded affiliated group are based or primarily located within the ,united ,states4 ,individuals who in fact exercise such day-to-day responsibilities shall be treated as executive officers and senior management regardless of their title4 7#e7 ,significant domestic business activities ,for purposes of paragraph 7#b77;,b77ii71 an expanded affiliated group has significant domestic business activities if at least #be percent of-- 7,a7 the employees of the group are based in the ,united ,states1 7,b7 the employee compensation incurred by the group is incurred with respect to employees based in the ,united ,states1 7,c7 the assets of the group are located in the ,united ,states1 or 7,d7 the income of the group is derived in the ,united ,states1 determined in the same manner as such determinations are made for purposes of determining substantial business activities under regulations referred to in paragraph 7#c7 as in effect on ,december #bb1 #bjag1 but applied by treating all references in such regulations to foreign country and relevant foreign country as references to the ,united ,states4 ,the ,secretary may issue regulations decreasing the threshold percent in any of the tests under such regulations for determining if business activities constitute significant domestic business activities for purposes of this paragraph4 4 7b7 ,conforming amendments 7#a7 ,clause 7i7 of section #ghgd7;a77#b77;,b7 is amended by striking after ,march #d1 #bjjc1 and inserting after ,march #d1 #bjjc1 and before ,december #bc1 #bjag14 7#b7 ,subsection 7c7 of section #ghgd is amended-- 7,a7 in paragraph 7#b7-- 7i7 by striking subsection 7a77#b77;,b77ii7 and inserting subsections 7a77#b77;,b77ii7 and 7b77#b77;,b77i72 and 7ii7 by inserting or 7b77#b77;,a7 after 7a77#b77;,b77i7 in subparagraph 7,b72 7,b7 in paragraph 7#c71 by inserting or 7b77#b77;,b77i71 as the case may be1 after 7a77#b77;,b77ii72 7,c7 in paragraph 7#e71 by striking subsection 7a77#b77;,b77ii7 and inserting subsections 7a77#b77;,b77ii7 and 7b77#b77;,b77i72 and 7,d7 in paragraph 7#f71 by inserting or inverted domestic corporation1 as the case may be1 after surrogate foreign corporation4 7c7 ,effective date ,the amendments made by this section shall apply to taxable years ending after ,december #bb1 #bjag4 #ajf4 ,requirement to disclose total corporate taxes paid 7a7 ,in general ,section #ac of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghm7 is amended by adding at the end the following new subsection3 7s7 ,disclosure of total corporate taxes paid 7#a7 ,issuer disclosure requirement ,each issuer required to file an annual or quarterly report under subsection 7a7 shall disclose in that report-- 7,a7 the total pre-tax profit of the issuer during the period covered by the report2 7,b7 the total amount paid by the issuer in ,state taxes during the period covered by the report2 7,c7 the total amount paid by the issuer in ,federal taxes during the period covered by the report2 and 7,d7 the total amount paid by the issuer in foreign taxes during the period covered by the report4 7#b7 ,disclosure of country-by-country reporting information ,each issuer required to file an annual or quarterly report under subsection 7a7 shall disclose in that report1 for each of its subsidiaries and aggregated on a country-by-country basis-- 7,a7 revenues generated from transactions with other constituent entities2 7,b7 revenues not generated from transactions with other constituent entities2 7,c7 profit or loss before income tax2 7,d7 total income tax paid on a cash basis to all tax jurisdictions1 and any taxes withheld on payments received by the constituent entities2 7,e7 total accrued tax expense recorded on taxable profits or losses1 reflecting only operations in the relevant annual period and excluding deferred taxes or provisions for uncertain tax liabilities2 7,f7 stated capital1 except that the stated capital of a permanent establishment must be reported in the tax jurisdiction of residence of the legal entity of which it is a permanent establishment unless there is a defined capital requirement in the permanent establishment tax jurisdiction for regulatory purposes2 7,g7 total accumulated earnings1 except that accumulated earnings of a permanent establishment must be reported by the legal entity of which it is a permanent establishment2 7,h7 total number of employees on a full-time equivalent basis2 and 7,i7 net book value of tangible assets1 which1 for purposes of this section1 does not include cash or cash equivalents1 intangibles1 or financial assets4 7#c7 ,availability of information ,the ,commission shall make the information filed with the ,commission pursuant to this subsection publicly available through the ,commission website in a manner that is searchable1 sortable1 and downloadable4 4 7b7 ,effective date ,the amendment made by this section shall apply to disclosures made after the date of the enactment of this ,act4 #ajg4 ,penalty for election to pay tax on deferred foreign income in installments 7a7 ,in general ,section #ife7;h7 is amended by adding at the end the following new paragraph3 7#g7 ,penalty ,interest on installments under this subsection shall be payable as determined under section #ffja by treating the last date prescribed for payment for any installment as the date for payment of the first installment under this subsection4 4 7b7 ,effective date ,the amendment made by subsection 7a7 shall take effect as if included in section #adajc of ,public ,law #aae-ig4 ,,ii ,additional measures to combat tax evasion #bja4 ,authorizing special measures against foreign jurisdictions1 financial institutions1 and others that significantly impede ,united ,states tax enforcement 7a7 ,in general ,section #ecah;,a of title #ca1 ,united ,states ,code1 is amended-- 7#a7 by striking the section heading and inserting the following3 ,special measures for jurisdictions1 financial institutions1 or international transactions that are of primary money laundering concern or significantly impede ,united ,states tax enforcement2 7#b7 in subsection 7a71 by striking the subsection heading and inserting the following3 ,special measures ,to counter money laundering and efforts to significantly impede united states tax enforcement2 7#c7 in subsection 7c7-- 7,a7 by striking the subsection heading and inserting the following3 ,consultations and information ,to be considered in finding jurisdictions1 institutions1 types of accounts1 or transactions ,to be of primary money laundering concern or ,to be significantly impeding ,united ,states tax enforcement2 and 7,b7 in paragraph 7#b71 by adding at the end the following3 7,c7 ,other considerations ,the fact that a jurisdiction or financial institution is cooperating with the ,united ,states on implementing the requirements specified in chapter #d of the ,internal ,revenue ,code of #aihf may be favorably considered in evaluating whether such jurisdiction or financial institution is significantly impeding ,united ,states tax enforcement4 2 7#d7 in subsection 7a77#a71 by inserting or is significantly impeding ,united ,states tax enforcement after primary money laundering concern2 7#e7 in subsection 7a77#d7-- 7,a7 in subparagraph 7,a7-- 7i7 by inserting in matters involving money laundering1 before shall consult2 and 7ii7 by striking and at the end2 7,b7 by redesignating subparagraph 7,b7 as subparagraph 7,c72 and 7,c7 by inserting after subparagraph 7,a7 the following3 7,b7 in matters involving ,united ,states tax enforcement1 shall consult with the ,commissioner of ,internal ,revenue1 the ,secretary of ,state1 the ,attorney ,general of the ,united ,states1 and in the sole discretion of the ,secretary1 such other agencies and interested parties as the ,secretary may find to be appropriate2 and 2 7#f7 in each of paragraphs 7#a77;,a71 7#b71 7#c71 and 7#d7 of subsection 7b71 by inserting or to be significantly impeding ,united ,states tax enforcement after primary money laundering concern each place that term appears2 7#g7 in subsection 7b71 by striking paragraph 7#e7 and inserting the following3 7#e7 ,prohibitions or conditions on opening or maintaining certain correspondent or payable-through accounts or authorizing certain payment cards ,if the ,secretary finds a jurisdiction outside of the ,united ,states1 #a or more financial institutions operating outside of the ,united ,states1 or #a or more classes of transactions within or involving a jurisdiction outside of the ,united ,states to be of primary money laundering concern or to be significantly impeding ,united ,states tax enforcement1 the ,secretary1 in consultation with the ,secretary of ,state1 the ,attorney ,general of the ,united ,states1 and the ,chairman of the ,board of ,governors of the ,federal ,reserve ,system1 may prohibit1 or impose conditions upon-- 7,a7 the opening or maintaining in the ,united ,states of a correspondent account or payable-through account by any domestic financial institution or domestic financial agency for or on behalf of a foreign banking institution1 if such correspondent account or payable-through account involves any such jurisdiction or institution1 or if any such transaction may be conducted through such correspondent account or payable-through account2 or 7,b7 the authorization1 approval1 or use in the ,united ,states of a credit card1 charge card1 debit card1 or similar credit or debit financial instrument by any domestic financial institution1 domestic financial agency1 or credit card company or association for or on behalf of a foreign banking institution1 if such credit card1 charge card1 debit card1 or similar credit or debit financial instrument involves any such jurisdiction or institution1 or if any such transaction may be conducted through such credit card1 charge card1 debit card1 or similar credit or debit financial instrument4 2 7#h7 in subsection 7c77#a71 by inserting or is significantly impeding ,united ,states tax enforcement after primary money laundering concern2 7#i7 in subsection 7c77#b77;,a7-- 7,a7 in clause 7ii71 by striking bank secrecy or special regulatory advantages and inserting bank1 tax1 corporate1 trust1 or financial secrecy or regulatory advantages2 7,b7 in clause 7iii71 by striking supervisory and counter-money and inserting supervisory1 international tax enforcement1 and counter-money2 7,c7 in clause 7v71 by striking banking or secrecy and inserting banking1 tax1 or secrecy2 and 7,d7 in clause 7vi71 by inserting 1 tax treaty1 or tax information exchange agreement after treaty2 7#aj7 in subsection 7c77#b77;,b7-- 7,a7 in clause 7i71 by inserting or tax evasion after money laundering2 and 7,b7 in clause 7iii71 by inserting 1 tax evasion1 after money laundering2 and 7#aa7 in subsection 7d71 by inserting involving money laundering1 and shall notify1 in writing1 the ,committee on ,finance of the ,senate and the ,committee on ,ways and ,means of the ,house of ,representatives of any such action involving ,united ,states tax enforcement after such action4 7b7 ,clerical amendment ,the table of contents for chapter #ec of title #ca1 ,united ,states ,code1 is amended by striking the item relating to section #ecah;,a and inserting the following3 #ecah;,a4 ,special measures for jurisdictions1 financial institutions1 or international transactions that are of primary money laundering concern or significantly impede ,united ,states tax enforcement4 4 #bjb4 ,strengthening the ,foreign ,account ,tax ,compliance ,act 7,,fatca7 7a7 ,reporting activities with respect to passive foreign investment companies ,section #abih7;f7 is amended by inserting 1 or who directly or indirectly forms1 transfers assets to1 is a beneficiary of1 has a beneficial interest in1 or receives money or property or the use thereof from1 after shareholder of4 7b7 ,withholdable payments to foreign financial institutions ,section #adga7;d7 is amended-- 7#a7 in paragraph 7#b77;,a71 by inserting or transaction after any depository1 and 7#b7 in paragraph 7#e77;,c71 by striking or any interest and all that follows and inserting derivatives1 or any interest 7including a futures or forward contract1 swap1 or option7 in such securities1 partnership interests1 commodities1 or derivatives44 7c7 ,withholdable payments to other foreign financial institutions ,section #adgb is amended-- 7#a7 by inserting as a result of any customer identification1 anti-money laundering1 anti-corruption1 or similar obligation to identify account holders1 after reason to know1 in subsection 7b77#b71 and 7#b7 by inserting as posing a low risk of tax evasion after this subsection in subsection 7c77#a77;,g74 7d7 ,definitions ,clauses 7i7 and 7ii7 of section #adgc7b77;,a7 are each amended by inserting or as a beneficial owner after indirectly4 7e7 ,special rules ,section #adgd7;c7 is amended-- 7#a7 by inserting 1 except that information provided under section #adga7;c7 or #adgb7;b7 may be disclosed to any ,federal law enforcement agency1 upon request or upon the initiation of the ,secretary1 to investigate or address a possible violation of ,united ,states law after shall apply in paragraph 7#a71 and 7#b7 by inserting 1 or has had an agreement terminated under such section1 after section #adga7;b7 in paragraph 7#b74 7f7 ,information with respect to foreign financial assets ,section #fjch;,d7a7 is amended by inserting ownership or beneficial ownership after holds any4 7g7 ,establishing presumptions for entities and transactions involving non-,,fatca institutions 7#a7 ,presumptions for tax purposes 7,a7 ,in general ,chapter #gf is amended by inserting after section #gdia the following new subchapter3 ,f ,presumptions for certain legal proceedings ,sec4 #gdib4 ,presumptions pertaining to entities and transactions involving non-,,fatca institutions4 #gdib4 ,presumptions pertaining to entities and transactions involving non-,,fatca institutions 7a7 ,control ,for purposes of any ,united ,states civil judicial or administrative proceeding to determine or collect tax1 there shall be a rebuttable presumption that a ,united ,states person who1 directly or indirectly1 formed1 transferred assets to1 was a beneficiary of1 had a beneficial interest in1 or received money or property or the use thereof from an entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation1 that holds an account1 or in any other manner has assets1 in a non-,,fatca institution1 exercised control over such entity4 ,the presumption of control created by this subsection shall not be applied to prevent the ,secretary from determining or arguing the absence of control4 7b7 ,transfers of income ,for purposes of any ,united ,states civil judicial or administrative proceeding to determine or collect tax1 there shall be a rebuttable presumption that any amount or thing of value received by a ,united ,states person directly or indirectly from an account or from an entity that holds an account1 or in any other manner has assets1 in a non-,,fatca institution1 constitutes income of such person taxable in the year of receipt2 and any amount or thing of value paid or transferred by or on behalf of a ,united ,states person directly or indirectly to an account1 or entity that holds an account1 or in any other manner has assets1 in a non-,,fatca institution1 represents previously unreported income of such person taxable in the year of the transfer4 7c7 ,rebutting the presumptions ,the presumptions established in this section may be rebutted only by clear and convincing evidence1 including detailed documentary1 testimonial1 and transactional evidence1 establishing that-- 7#a7 in subsection 7a71 such taxpayer exercised no control1 directly or indirectly1 over account or entity at the time in question1 and 7#b7 in subsection 7b71 such amounts or things of value did not represent income related to such ,united ,states person4 ,any court having jurisdiction of a civil proceeding in which control of such an offshore account or offshore entity or the income character of such receipts or amounts transferred is an issue shall prohibit the introduction by the taxpayer of any foreign based document that is not authenticated in open court by a person with knowledge of such document1 or any other evidence supplied by a person outside the jurisdiction of a ,united ,states court1 unless such person appears before the court4 4 7,b7 ,the table of subchapters for chapter #gf is amended by inserting after the item relating to subchapter ,e the following new item3 ,subchapter ,f4 ,presumptions for certain legal proceedings 4 7#b7 ,definition of non-fatca institution ,section #ggja7;a7 is amended by adding at the end the following new paragraph3 7#ea7 ,non-fatca institution ,the term non-,,fatca institution means any foreign financial institution that does not meet the reporting requirements of section #adga7;b74 4 7#c7 ,presumptions for securities law purposes ,section #ba of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghu7 is amended by adding at the end the following new subsection3 7j7 ,presumptions pertaining to control and beneficial ownership 7#a7 ,control ,for purposes of any civil judicial or administrative proceeding under this title1 there shall be a rebuttable presumption that a ,united ,states person who1 directly or indirectly1 formed1 transferred assets to1 was a beneficiary of1 had a beneficial interest in1 or received money or property or the use thereof from an entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation1 that holds an account1 or in any other manner has assets1 in a non-,,fatca institution 7as defined in section #ggja7;a77#ea7 of the ,internal ,revenue ,code of #aihf71 exercised control over such entity4 ,the presumption of control created by this paragraph shall not be applied to prevent the ,commission from determining or arguing the absence of control4 7#b7 ,beneficial ownership ,for purposes of any civil judicial or administrative proceeding under this title1 there shall be a rebuttable presumption that securities that are nominally owned by an entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation1 and that are held in a non-,,fatca institution 7as so defined71 are beneficially owned by any ,united ,states person who directly or indirectly exercised control over such entity4 ,the presumption of beneficial ownership created by this paragraph shall not be applied to prevent the ,commission from determining or arguing the absence of beneficial ownership4 4 7#d7 ,presumption for reporting purposes relating to foreign financial accounts ,section #ecad of title #ca1 ,united ,states ,code1 is amended by adding at the end the following new subsection3 7d7 ,rebuttable presumption ,for purposes of this section1 there shall be a rebuttable presumption that any account with a non-,,fatca institution 7as defined in section #ggja7;a77#ea7 of the ,internal ,revenue ,code of #aihf7 contains funds in an amount that is at least sufficient to require a report prescribed by regulations under this section4 4 7#e7 ,regulatory authority ,not later than #ahj days after the date of enactment of this ,act1 the ,secretary of the ,treasury and the ,chairman of the ,securities and ,exchange ,commission shall each adopt regulations or other guidance necessary to implement the amendments made by this subsection4 ,the ,secretary and the ,chairman may1 by regulation or guidance1 provide that the presumption of control shall not extend to particular classes of transactions1 such as corporate reorganizations or transactions below a specified dollar threshold1 if either determines that applying such amendments to such transactions is not necessary to carry out the purposes of such amendments4 7h7 ,effective date ,the amendments made by this section shall take effect on the date which is #ahj days after the date of enactment of this ,act1 whether or not regulations are issued under subsection 7g77#e74 #bjc4 ,reporting ,united ,states beneficial owners of foreign owned financial accounts 7a7 ,in general ,subpart ,b of part ,,iii of subchapter ,a of chapter #fa is amended by inserting after section #fjde;,b the following new sections3 #fjde;,c4 ,returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity 7a7 ,requirement of return ,if-- 7#a7 any withholding agent under sections #adda and #addb has the control1 receipt1 custody1 disposal1 or payment of any amount constituting gross income from sources within the ,united ,states of any foreign entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation 7other than an entity with shares regularly traded on an established securities market71 and 7#b7 such withholding agent determines for purposes of title #ad1 #ah1 or #ca of the ,united ,states ,code that a ,united ,states person has any beneficial interest in the foreign entity or in the account in such entity's name 7hereafter in this section referred to as ,united ,states beneficial owner71 then the withholding agent shall make a return according to the forms or regulations prescribed by the ,secretary4 7b7 ,required information ,for purposes of subsection 7a7 the information required to be included on the return shall include-- 7#a7 the name1 address1 and1 if known1 the taxpayer identification number of the ,united ,states beneficial owner1 7#b7 the known facts pertaining to the relationship of such ,united ,states beneficial owner to the foreign entity and the account1 7#c7 the gross amount of income from sources within the ,united ,states 7including gross proceeds from brokerage transactions71 and 7#d7 such other information as the ,secretary may by forms or regulations provide4 7c7 ,statements ,to ,be furnished to beneficial owners with respect to whom information is required ,to ,be reported ,a withholding agent required to make a return under subsection 7a7 shall furnish to each ,united ,states beneficial owner whose name is required to be set forth in such return a statement showing-- 7#a7 the name1 address1 and telephone number of the information contact of the person required to make such return1 and 7#b7 the information required to be shown on such return with respect to such ,united ,states beneficial owner4 ,the written statement required under the preceding sentence shall be furnished to the ,united ,states beneficial owner on or before ,january #ca of the year following the calendar year for which the return under subsection 7a7 was required to be made4 ,in the event the person filing such return does not have a current address for the ,united ,states beneficial owner1 such written statement may be mailed to the address of the foreign entity4 #fjde;,d4 ,returns by financial institutions regarding establishment of accounts in non-,,fatca institutions 7a7 ,requirement of return ,any financial institution directly or indirectly opening a bank1 brokerage1 or other financial account for or on behalf of an offshore entity1 including a trust1 corporation1 limited liability company1 partnership1 or foundation 7other than an entity with shares regularly traded on an established securities market71 in a non-,,fatca institution 7as defined in section #ggja7;a77#ea77 at the direction of1 on behalf of1 or for the benefit of a ,united ,states person shall make a return according to the forms or regulations prescribed by the ,secretary4 7b7 ,required information ,for purposes of subsection 7a7 the information required to be included on the return shall include-- 7#a7 the name1 address1 and taxpayer identification number of such ,united ,states person1 7#b7 the name and address of the financial institution at which a financial account is opened1 the type of account1 the account number1 the name under which the account was opened1 and the amount of the initial deposit1 7#c7 if the account is held in the name of an entity1 the name and address of such entity1 the type of entity1 and the name and address of any company formation agent or other professional employed to form or acquire the entity1 and 7#d7 such other information as the ,secretary may by forms or regulations provide4 7c7 ,statements ,to be furnished to ,united ,states persons with respect to whom information is required ,to be reported ,a financial institution required to make a return under subsection 7a7 shall furnish to each ,united ,states person whose name is required to be set forth in such return a statement showing-- 7#a7 the name1 address1 and telephone number of the information contact of the person required to make such return1 and 7#b7 the information required to be shown on such return with respect to such ,united ,states person4 ,the written statement required under the preceding sentence shall be furnished to such ,united ,states person on or before ,january #ca of the year following the calendar year for which the return under subsection 7a7 was required to be made4 7d7 ,exemption ,the ,secretary may by regulations exempt any class of ,united ,states persons or any class of accounts or entities from the requirements of this section if the ,secretary determines that applying this section to such persons1 accounts1 or entities is not necessary to carry out the purposes of this section4 4 7b7 ,penalties 7#a7 ,returns ,section #fgbd7;d77#a77;,b7 is amended by striking or at the end of clause 7xxv71 by striking and at the end of clause 7xxvi71 and by adding after clause 7xxvi7 the following new clauses3 7xxvii7 section #fjde;,c7a7 7relating to returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity71 or 7xxviii7 section #fjde;,d7a7 7relating to returns by financial institutions regarding establishment of accounts at non-,,fatca institutions71 and 4 7#b7 ,payee statements ,section #fgbd7;d77#b7 is amended by redesignating the second subparagraph 7,,jj7 as subparagraph 7,,kk71 by striking or at the end of subparagraph 7,,ii71 by striking the period at the end of subparagraph 7,,kk7 7as so redesignated71 and by inserting after such subparagraph 7,,kk7 the following new subparagraphs3 7,,ll7 section #fjde;,c7c7 7relating to returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity71 or 7,,mm7 section #fjde;,d7c7 7relating to returns by financial institutions regarding establishment of accounts at non-,,fatca institutions74 4 7c7 ,clerical amendment ,the table of sections for subpart ,b of part ,,iii of subchapter ,a of chapter #fa is amended by inserting after the item relating to section #fjde;,b the following new items3 ,sec4 #fjde;,c4 ,returns regarding ,united ,states beneficial owners of financial accounts located in the ,united ,states and held in the name of a foreign entity4,sec4 #fjde;,d4 ,returns by financial institutions regarding establishment of accounts at non-,,fatca institutions4 4 7d7 ,additional penalties 7#a7 ,additional penalties on banks ,section #ebci7;b77#a7 of the ,revised ,statutes of the ,united ,states 7#ab ,u4,s4,c4 #ic7;b77#a77 is amended by inserting or any of the provisions of section #fjde;,d of the ,internal ,revenue ,code of #aihf1 after any regulation issued pursuant to14 7#b7 ,additional penalties on securities firms ,section #ba7;d77#c77;,a7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghu7d77#c77;,a77 is amended by inserting any of the provisions of section #fjde;,d of the ,internal ,revenue ,code of #aihf1 after the rules or regulations thereunder14 7e7 ,regulatory authority and effective date 7#a7 ,regulatory ,authority ,not later than #ahj days after the date of the enactment of this ,act1 the ,secretary of the ,treasury shall adopt regulations1 forms1 or other guidance necessary to implement this section4 7#b7 ,effective ,date ,section #fjde;,c of the ,internal ,revenue ,code of #aihf 7as added by this section7 and the amendment made by subsection 7d77#a7 shall take effect with respect to amounts paid into foreign owned accounts located in the ,united ,states after ,december #ca of the year of the date of the enactment of this ,act4 ,section #fjde;,d of such ,code 7as so added7 and the amendment made by subsection 7d77#b7 shall take effect with respect to accounts opened after ,december #ca of the year of the date of the enactment of this ,act4 ,section #fjde;,d of such ,code 7as so added7 and the amendment made by subsection 7d77#b7 shall take effect with respect to accounts opened after ,december #ca of the year of the date of the enactment of this act1 whether or not regulations are issued under ,section #fjde;,d4 #bjd4 ,penalty for failing to disclose offshore holdings 7a7 ,securities ,exchange ,act of #aicd ,section #ba7;d77#c77;,b7 of the ,securities ,exchange ,act of #aicd 7#ae ,u4,s4,c4 #ghu7d77#c77;,b77 is amended by adding at the end the following3 7iv7 ,fourth tier ,notwithstanding clauses 7i71 7ii71 and 7iii71 for each such violation1 the amount of penalty shall not exceed #a1jjj1jjj for any natural person or #aj1jjj1jjj for any other person1 if-- 7,i7 such person directly or indirectly controlled any foreign entity1 including any trust1 corporation1 limited liability company1 partnership1 or foundation through which an issuer purchased1 sold1 or held equity or debt instruments2 7,,ii7 such person knowingly or recklessly failed to disclose any such holding1 purchase1 or sale by the issuer2 and 7,,iii7 the holding1 purchase1 or sale would have been otherwise subject to disclosure by the issuer or such person under this title4 4 7b7 ,securities ,act of #aicc ,section #bj7;d77#b7 of the ,securities ,act of #aicc 7#ae ,u4,s4,c4 #ggt7d77#b77 is amended by adding at the end the following3 7,d7 ,fourth tier ,notwithstanding subparagraphs 7,a71 7,b71 and 7,c71 for each such violation1 the amount of penalty shall not exceed #a1jjj1jjj for any natural person or #aj1jjj1jjj for any other person1 if-- 7i7 such person directly or indirectly controlled any foreign entity1 including any trust1 corporation1 limited liability company1 partnership1 or foundation through which an issuer purchased1 sold1 or held equity or debt instruments2 7ii7 such person knowingly or recklessly failed to disclose any such holding1 purchase1 or sale by the issuer2 and 7iii7 the holding1 purchase1 or sale would have been otherwise subject to disclosure by the issuer or such person under this title4 4 7c7 ,investment ,advisers ,act of #aidj ,section #bjc7;i77#b7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#c7;i77#b77 is amended by adding at the end the following3 7,d7 ,fourth tier ,notwithstanding subparagraphs 7,a71 7,b71 and 7,c71 for each such violation1 the amount of penalty shall not exceed #a1jjj1jjj for any natural person or #aj1jjj1jjj for any other person1 if-- 7i7 such person directly or indirectly controlled any foreign entity1 including any trust1 corporation1 limited liability company1 partnership1 or foundation through which an issuer purchased1 sold1 or held equity or debt instruments2 7ii7 such person knowingly or recklessly failed to disclose any such holding1 purchase1 or sale by the issuer2 and 7iii7 the holding1 purchase1 or sale would have been otherwise subject to disclosure by the issuer or such person under this title4 4 #bje4 ,deadline for anti-money laundering rule for investment advisers 7a7 ,anti-,money laundering obligations for investment advisers ,section #ecab7;a77#b7 of title #ca1 ,united ,states ,code1 is amended-- 7#a7 in subparagraph 7,y71 by striking or at the end2 7#b7 by redesignating subparagraph 7,z7 as subparagraph 7,,bb72 and 7#c7 by inserting after subparagraph 7,y7 the following3 7,z7 an investment adviser 7as defined in section #bjb7;a7 of the ,investment ,advisers ,act of #aidj72 4 7b7 ,rules required ,the ,secretary of the ,treasury shall-- 7#a7 in consultation with the ,securities and ,exchange ,commission and the ,commodity ,futures ,trading ,commission1 not later than #ahj days after the date of enactment of this ,act1 publish a proposed rule in the ,federal ,register to carry out the amendments made by this section2 and 7#b7 not later than #bgj days after the date of enactment of this ,act1 publish a final rule in the ,federal ,register on the matter described in paragraph 7#a74 7c7 ,contents ,the final rule published under this section shall require1 at a minimum1 each investment adviser 7as defined in section #bjb7;a77#aa7 of the ,investment ,advisers ,act of #aidj 7#ae ,u4,s4,c4 #hj;b-#b7;a77#aa777 registered with the ,securities and ,exchange ,commission pursuant to section #bjc of that ,act 7#ae ,u4,s4,c4 #hj;b-#c7-- 7#a7 to submit suspicious activity reports and establish an anti-money laundering program under subsections 7g7 and 7h71 respectively1 of section #ecah of title #ca1 ,united ,states ,code2 and 7#b7 to comply with-- 7,a7 the customer identification program requirements under section #ecah7l7 of title #ca1 ,united ,states ,code2 and 7,b7 the due diligence requirements under section #ecah7;i7 of title #ca1 ,united ,states ,code4 #bjf4 ,anti-money laundering requirements for formation agents 7a7 ,anti-,money laundering obligations for formation agents ,section #ecab7;a77#b7 of title #ca1 ,united ,states ,code1 as amended by section #bje of this ,act1 is amended by inserting after subparagraph 7,z7 the following3 7,,aa7 any person engaged in the business of forming new corporations1 limited liability companies1 partnerships1 trusts1 or other legal entities2 or 4 7b7 ,deadline for anti-,money laundering rule for formation agents 7#a7 ,proposed rule ,the ,secretary of the ,treasury1 in consultation with the ,attorney ,general of the ,united ,states1 the ,secretary of ,homeland ,security1 and the ,commissioner of ,internal ,revenue1 shall-- 7,a7 not later than #abj days after the date of enactment of this ,act1 publish a proposed rule in the ,federal ,register requiring persons described in section #ecab7;a77#b77;,,aa7 of title #ca1 ,united ,states ,code1 as added by this section1 to establish anti-money laundering programs under section #ecah7;h7 of that title2 and 7,b7 not later than #bgj days after the date of enactment of this ,act1 publish a final rule in the ,federal ,register on the matter described in subparagraph 7,a74 7#b7 ,exclusions ,the rule promulgated under this subsection shall exclude from the category of persons engaged in the business of forming new corporations or other entities-- 7,a7 any government agency2 and 7,b7 any attorney or law firm that uses a paid formation agent operating within the ,united ,states to form such corporations or other entities4 #bjg4 ,strengthening ,john ,doe summons proceedings 7a7 ,in general ,subsection 7f7 of section #gfji is amended to read as follows3 7f7 ,additional requirement in the case of a ,john ,doe summons 7#a7 ,general ,rule ,any summons described in subsection 7c77#a7 which does not identify the person with respect to whose liability the summons is issued may be served only after a court proceeding in which the ,secretary establishes that-- 7,a7 the summons relates to the investigation of a particular person or ascertainable group or class of persons1 7,b7 there is a reasonable basis for believing that such person or group or class of persons may fail or may have failed to comply with any provision of any internal revenue law1 and 7,c7 the information sought to be obtained from the examination of the records or testimony 7and the identity of the person or persons with respect to whose liability the summons is issued7 is not readily available from other sources4 7#b7 ,exception ,paragraph 7#a7 shall not apply to any summons which specifies that it is limited to information regarding a ,united ,states correspondent account 7as defined in section #ecah;,a7e77#a77;,b7 of title #ca1 ,united ,states ,code7 or a ,united ,states payable-through account 7as defined in section #ecah;,a7e77#a77;,c7 of such title7 of a financial institution that is held at a non-,,fatca institution 7as defined in section #ggja7;a77#ea774 7#c7 ,presumption in cases involving non-fatca institutions ,for purposes of this section1 in any case in which the particular person or ascertainable group or class of persons have financial accounts in or transactions related to a non-,,fatca institution 7as defined in section #ggja7;a77#ea771 there shall be a presumption that there is a reasonable basis for believing that such person or group or class of persons may fail or may have failed to comply with provisions of internal revenue law4 7#d7 ,project ,john ,doe summonses 7,a7 ,in general ,notwithstanding the requirements of paragraph 7#a71 the ,secretary may issue a summons described in paragraph 7#a7 if the summons-- 7i7 relates to a project which is approved under subparagraph 7,b71 7ii7 is issued to a person who is a member of the group or class established under subparagraph 7,b77i71 and 7iii7 is issued within #c years of the date on which such project was approved under subparagraph 7,b74 7,b7 ,approval of projects ,a project may only be approved under this subparagraph after a court proceeding in which the ,secretary establishes that-- 7i7 any summons issued with respect to the project will be issued to a member of an ascertainable group or class of persons1 and 7ii7 any summons issued with respect to such project will meet the requirements of paragraph 7#a74 7,c7 ,extension ,upon application of the ,secretary1 the court may extend the time for issuing such summonses under subparagraph 7,a77i7 for additional #c-year periods1 but only if the court continues to exercise oversight of such project under subparagraph 7,d74 7,d7 ,ongoing court oversight ,during any period in which the ,secretary is authorized to issue summonses in relation to a project approved under subparagraph 7,b7 7including during any extension under subparagraph 7,c771 the ,secretary shall report annually to the court on the use of such authority1 provide copies of all summonses with such report1 and comply with the court's direction with respect to the issuance of any ,john ,doe summons under such project4 4 7b7 ,jurisdiction of court 7#a7 ,in general ,paragraph 7#a7 of section #gfji7;h7 is amended by inserting after the first sentence the following new sentence3 ,any ,united ,states district court in which a member of the group or class to which a summons may be issued resides or is found shall have jurisdiction to hear and determine the approval of a project under subsection 7f77#d77;,b744 7#b7 ,conforming amendment ,the first sentence of section #gfji7;h77#a7 is amended by striking 7f7 and inserting 7f77#a74 7c7 ,effective date ,the amendments made by this section shall apply to summonses issued after the date of the enactment of this ,act4 #bjh4 ,improving enforcement of foreign financial account reporting 7a7 ,clarifying the connection of foreign financial account reporting to tax administration ,paragraph 7#d7 of section #fajc7;b7 is amended by adding at the end the following new sentence3 ,for purposes of subparagraph 7,a77i71 section #ecad of title #ca1 ,united ,states ,code1 and sections #ecba and #ecbb of such title 7as such sections pertain to such section #ecad71 shall be considered related statutes4 4 7b7 ,simplifying the calculation of foreign financial account reporting penalties ,section #ecba7;a77#e77;,d77ii7 of title #ca1 ,united ,states ,code1 is amended by striking the balance in the account at the time of the violation and inserting the highest balance in the account during the reporting period to which the violation relates4 7c7 ,clarifying the use of suspicious activity reports under the ,bank ,secrecy ,act for civil tax law enforcement ,section #ecai of title #ca1 ,united ,states ,code1 is amended by inserting the civil and criminal enforcement divisions of the ,internal ,revenue ,service1 after including4