,,ii #aagth ,,congress #ast ,session ,s4 #gbe ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,march #aa1 #bjba ,mr4 ,whitehouse 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 ,swap payments made from the ,united ,states to persons offshore4 ,sec4 #ajc4 ,requirement to disclose total corporate taxes paid4 ,sec4 #ajd4 ,penalty for election to pay tax on deferred foreign income in installments4 ,sec4 #aje4 ,modifications to base erosion and anti-abuse tax4 ,sec4 #ajf4 ,treatment of foreign base company oil related income as subpart ,f income4 ,sec4 #ajg4 ,modifications of foreign tax credit rules applicable to dual capacity taxpayers4 ,sec4 #ajh4 ,treatment of intangibles transferred to partnerships4 ,,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 ,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 #ajc4 ,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 #ajd4 ,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 #aje4 ,modifications to base erosion and anti-abuse tax 7a7 ,reduction of exemption based on annual gross receipts ,section #ei;,a7e77#a77;,b7 is amended by striking #ejj1jjj1jjj and inserting #ajj1jjj1jjj4 7b7 ,elimination of exception based on base erosion percentage ,section #ei7;e77#a7 is amended by inserting and at the end of subparagraph 7,a71 by striking 1 and at the end of subparagraph 7,b7 and inserting a period1 and by striking subparagraph 7,c74 7c7 ,certain capitalized amounts included as base erosion payments ,section #ei;,a7d7 is amended by redesignating paragraphs 7#d7 and 7#e7 as paragraphs 7#e7 and 7#f71 respectively1 and by inserting after paragraph 7#c7 the following new paragraph3 7#d7 ,certain capitalized amounts ,such term shall also include any interest1 royalty1 or any other amount identified by the ,secretary that is paid or accrued by the taxpayer to a foreign person which is a related party of the taxpayer and with respect to which the taxpayer increases the value of property under section #ajaf or any other provision of this title4 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after the date of the enactment of this ,act4 #ajf4 ,treatment of foreign base company oil related income as subpart ,f income 7a7 ,in general ,section #ied7;a7 is amended by striking and at the end of paragraph 7#b71 by striking the period at the end of paragraph 7#c7 and inserting 1 and1 and by adding at the end the following new paragraph3 7#d7 the foreign base company oil related income for the taxable year 7determined under subsection 7g7 and reduced as provided in subsection 7b77#e774 4 7b7 ,foreign base company oil related income ,section #ied is amended by inserting after subsection 7e7 the following new subsection3 7g7 ,foreign base company oil related income ,for purposes of this section1 the term foreign base company oil related income means foreign oil related income 7within the meaning of paragraphs 7#b7 and 7#c7 of section #ijg7;c77 other than income derived from a source within a foreign country in connection with-- 7#a7 oil or gas which was extracted from an oil or gas well located in such foreign country1 or 7#b7 oil1 gas1 or a primary product of oil or gas which is sold by the foreign corporation or a related person for use or consumption within such country or is loaded in such country on a vessel or aircraft as fuel for such vessel or aircraft4 ,such term shall not include any foreign personal holding company income 7as defined in subsection 7c774 4 7c7 ,conforming amendments 7#a7 ,section #ieb7;c77#a77;,b77iii7 is amended by redesignating subclauses 7,,iii7 and 7,,iv7 as subclauses 7,,iv7 and 7,v71 respectively1 and by inserting after subclause 7,,ii7 the following new subclause3 7,,iii7 foreign base company oil related income4 4 7#b7 ,section #ied7;b7 is amended-- 7,a7 by striking and the foreign base company services income in paragraph 7#e7 and inserting the foreign base company services income1 and the foreign base company oil related income1 and 7,b7 by adding at the end the following new paragraph3 7#f7 ,foreign base company oil related income not treated as another kind of base company income ,income of a corporation which is foreign base company oil related income shall not be considered foreign base company income of such corporation under paragraph 7#b7 or 7#c7 of subsection 7a74 4 7d7 ,effective date ,the amendments made by this section shall apply to taxable years of foreign corporations beginning after the date of the enactment of this ,act1 and to taxable years of ,united ,states shareholders in which or with which such taxable years of foreign corporations end4 #ajg4 ,modifications of foreign tax credit rules applicable to dual capacity taxpayers 7a7 ,in general ,section #ija of the ,internal ,revenue ,code of #aihf is amended by redesignating subsection 7n7 as subsection 7o7 and by inserting after subsection 7m7 the following new subsection3 7n7 ,special rules relating to dual capacity taxpayers 7#a7 ,general rule ,notwithstanding any other provision of this chapter1 any amount paid or accrued by a dual capacity taxpayer to a foreign country or possession of the ,united ,states for any period with respect to combined foreign oil and gas income 7as defined in section #ijg7;b77#a77 shall not be considered a tax to the extent such amount exceeds the amount 7determined in accordance with regulations7 which would have been required to be paid if the taxpayer were not a dual capacity taxpayer4 7#b7 ,dual capacity taxpayer ,for purposes of this subsection1 the term dual capacity taxpayer means1 with respect to any foreign country or possession of the ,united ,states1 a person who-- 7,a7 is subject to a levy of such country or possession1 and 7,b7 receives 7or will receive7 directly or indirectly a specific economic benefit 7as determined in accordance with regulations7 from such country or possession4 4 7b7 ,effective date 7#a7 ,in general ,the amendments made by this section shall apply to taxes paid or accrued in taxable years beginning after ,december #ca1 #bjbj4 7#b7 ,contrary treaty obligations upheld ,the amendments made by this section shall not apply to the extent contrary to any treaty obligation of the ,united ,states4 #ajh4 ,treatment of intangibles transferred to partnerships 7a7 ,repeal of certain regulatory authority ,section #cfg7;d7 is amended by striking paragraph 7#c74 7b7 ,exception to rules providing nonrecognition of gain ,section #gba7;d7 is amended to read as follows3 7d7 ,certain transfers of intangible property to partnerships 7#a7 ,in general ,except as provided in regulations prescribed by the ,secretary1 if a ,united ,states person transfers any intangible property within the meaning of section #cfg7;d77#d7 to a specified partnership in an exchange described in this section1 subsection 7a7 shall not apply to the transfer of such property and the provisions of section #cfg7;d77#b7 shall apply to such transfer4 7#b7 ,specified partnership ,for purposes of this subsection1 the term specified partnership means any partnership if any item of income or gain attributable to intangible property is taken into account in determining any distributive share of such partnership to a person that is not a ,united ,states person4 4 7c7 ,effective date ,the amendments made by this section shall apply to transfers after the date of the enactment of this ,act1 in taxable years ending after such date4 ,,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 at 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 7,,kk71 by striking or at the end of subparagraph 7,,jj71 by striking the period at the end of subparagraph 7,,kk71 and by inserting after 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