113 S1533 IS: Stop Tax Haven Abuse Act
U.S. Senate
2013-09-19
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.(a)This Act may be cited
as the Stop Tax Haven Abuse
Act
.(b)Except as otherwise
expressly provided, whenever in this Act an amendment or repeal is expressed in
terms of an amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or other provision of the
Internal Revenue Code of 1986.(c)The table of contents of this Act is as follows:Sec. 1. Short title, etc.TITLE I—Deterring the use of tax havens for tax evasionSec. 101. Authorizing special measures against foreign jurisdictions, financial institutions, and others that significantly impede United States tax enforcement.Sec. 102. Strengthening the Foreign Account Tax Compliance Act (FATCA).Sec. 103. Treatment of foreign corporations managed and controlled in the United States as domestic corporations.Sec. 104. Reporting United States beneficial owners of foreign owned financial accounts.Sec. 105. Swap payments made from the United States to persons offshore.TITLE II—Other measures To combat tax haven abusesSec. 201. Country-by-country reporting.Sec. 202. Penalty for failing to disclose offshore holdings.Sec. 203. Deadline for anti-money laundering rule for investment advisers.Sec. 204. Anti-money laundering requirements for formation agents.Sec. 205. Strengthening John Doe summons proceedings.Sec. 206. Improving enforcement of foreign financial account reporting.TITLE III—Ending corporate offshore tax avoidanceSec. 301. Allocation of expenses and taxes on basis of repatriation of foreign income.Sec. 302. Excess income from transfers of intangibles to low-taxed affiliates treated as subpart F income.Sec. 303. Limitations on income shifting through intangible property transfers.Sec. 304. Repeal of check-the-box rules for certain foreign entities and CFC look-thru rules.Sec. 305. Prohibition on offshore loan abuse.<enum>I</enum><header>Deterring the use of tax havens for tax
evasion</header><section id="id9BFBAD9CD61A4AF19DA8B5976FCB1BE9"><enum>101.</enum><header>Authorizing
special measures against foreign jurisdictions, financial institutions, and
others that significantly impede United States tax enforcement</header><text display-inline="no-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/31/5318A">Section 5318A</external-xref> of title 31, United States
Code, is amended—</text><paragraph id="idF4124E540E614EF78255810AF10BE771"><enum>(1)</enum><text>by striking the
section heading and inserting the following:</text><quoted-block display-inline="no-display-inline" id="id8E44AAE3AB514B39BFB0436BA8ABB62C" style="USC"><section id="idB7F9F3BEF7CC45EC9862D003421C4BCA"><enum>5318A.</enum><header>Special
measures for jurisdictions, financial institutions, or international
transactions that are of primary money laundering concern or significantly
impede United States tax
enforcement</header></section><after-quoted-block>;</after-quoted-block></quoted-block></paragraph><paragraph id="id0EC66DA561DF4D4EA27D9F3018879455"><enum>(2)</enum><text>in subsection
(a), by striking the subsection heading and inserting the following:</text><quoted-block display-inline="no-display-inline" id="id4C257715FD3043F6A44167F303680CC5" style="USC"><subsection id="id41080F3A7F1F49C28DE9C0BC453DB222"><enum>(a)</enum><header>Special
measures To counter money laundering and efforts to significantly impede United
States tax
enforcement</header></subsection><after-quoted-block>;</after-quoted-block></quoted-block></paragraph><paragraph id="id4A3C15CA3C2644E6AC4582C940CEEAEF"><enum>(3)</enum><text>in subsection
(c)—</text><subparagraph id="idA7A67EA7E52647ED905D9913A03B4F51"><enum>(A)</enum><text>by striking the
subsection heading and inserting the following:</text><quoted-block display-inline="no-display-inline" id="id16E8BD55D7E54C24A2A1DDCAEDDC6406" style="USC"><subsection id="idF43F622F940D4097B815FBA64F909A9D"><enum>(c)</enum><header>Consultations
and information To be considered in finding jurisdictions, institutions, types
of accounts, or transactions To be of primary money laundering concern or To be
significantly impeding United States tax
enforcement</header></subsection><after-quoted-block>;
and</after-quoted-block></quoted-block></subparagraph><subparagraph id="idC31F3A23DB3E45D59DA9426C3021312A"><enum>(B)</enum><text>by inserting at
the end of paragraph (2) thereof the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="id247DB39BC01B4365932B4AC67FECC721" style="OLC"><subparagraph id="id9DAFBFB871844215984F35E9DBAFC443"><enum>(C)</enum><header>Other
considerations</header><text>The fact that a jurisdiction or financial
institution is cooperating with the United States on implementing the
requirements specified in <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/4">chapter 4</external-xref> of the Internal Revenue Code of 1986 may be
favorably considered in evaluating whether such jurisdiction or financial
institution is significantly impeding United States tax
enforcement.</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="id9F17940EA8A84DEBBF1D9710B6E77154"><enum>(4)</enum><text>in subsection
(a)(1), by inserting <quote>or is significantly impeding United States tax
enforcement</quote> after <quote>primary money laundering
concern</quote>;</text></paragraph><paragraph id="id4AA6FD08A259462F9037F0210FC2E7B8"><enum>(5)</enum><text>in subsection
(a)(4)—</text><subparagraph id="id6C2800A414C941959AB41EE424ECBD32"><enum>(A)</enum><text>in subparagraph
(A)—</text><clause id="id864273A3DD344D83BBF14D6484651E94"><enum>(i)</enum><text>by
inserting <quote>in matters involving money laundering,</quote> before
<quote>shall consult</quote>; and</text></clause><clause id="idB2F69EF4D5864DC1ABC06A60EFDE908D"><enum>(ii)</enum><text>by
striking <quote>and</quote> at the end;</text></clause></subparagraph><subparagraph id="id17B4FB76D1814EF18DAD75F6321BB3C2"><enum>(B)</enum><text>by redesignating
subparagraph (B) as subparagraph (C); and</text></subparagraph><subparagraph id="id858B56F575014C8A8707A112D294C148"><enum>(C)</enum><text>by inserting
after subparagraph (A) the following:</text><quoted-block display-inline="no-display-inline" id="id5ADB7D5B9A6E4758B1A56C72EE85363E" style="OLC"><subparagraph id="idDD48E440921A46AC99080C97CB5C26B4"><enum>(B)</enum><text>in matters
involving United States tax enforcement, shall consult with the Commissioner of
the Internal Revenue, the Secretary of State, the Attorney General of the
United States, and in the sole discretion of the Secretary, such other agencies
and interested parties as the Secretary may find to be appropriate;
and</text></subparagraph><after-quoted-block>;</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="idDCA77BA32D954B1ABCF6CFAC493FD85B"><enum>(6)</enum><text>in each of
paragraphs (1)(A), (2), (3), and (4) of subsection (b), by inserting <quote>or
to be significantly impeding United States tax enforcement</quote> after
<quote>primary money laundering concern</quote> each place that term
appears;</text></paragraph><paragraph id="idFAACBE96F67A4DF6B5D54780C7F4BB45"><enum>(7)</enum><text>in subsection
(b), by striking paragraph (5) and inserting the following:</text><quoted-block display-inline="no-display-inline" id="id44F4CD3B6FE14AF2BEDC31C41F949E74" style="OLC"><paragraph id="idBF6D855AD6EA4B06830706EC29D591A9"><enum>(5)</enum><header>Prohibitions or
conditions on opening or maintaining certain correspondent or payable-through
accounts or authorizing certain payment cards</header><text>If the Secretary
finds a jurisdiction outside of the United States, 1 or more financial
institutions operating outside of the United States, or 1 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 enforcement, the Secretary, in consultation with the Secretary of
State, the Attorney General of the United States, and the Chairman of the Board
of Governors of the Federal Reserve System, may prohibit, or impose conditions
upon—</text><subparagraph id="idB537F33EDC574FBB8FF5007BA47DAB3D"><enum>(A)</enum><text>the opening or
maintaining in the United States of a correspondent account or payable-through
account; or</text></subparagraph><subparagraph id="id7824CC085F484343BCD33C0F2DBA37AA"><enum>(B)</enum><text>the
authorization, approval, or use in the United States of a credit card, charge
card, debit card, or similar credit or debit financial instrument by any
domestic financial institution, financial agency, or credit card company or
association, for or on behalf of a foreign banking institution, if such
correspondent account, payable-through account, credit card, charge card, debit
card, or similar credit or debit financial instrument, involves any such
jurisdiction or institution, or if any such transaction may be conducted
through such correspondent account, payable-through account, credit card,
charge card, debit card, or similar credit or debit financial
instrument.</text></subparagraph></paragraph><after-quoted-block>;
and</after-quoted-block></quoted-block></paragraph><paragraph id="idF18F1BAAD9BE4A4DACDD61D43603B68A"><enum>(8)</enum><text>in subsection
(c)(1), by inserting <quote>or is significantly impeding United States tax
enforcement</quote> after <quote>primary money laundering
concern</quote>;</text></paragraph><paragraph id="id7E0E007D869F4DBCA62A31AE0378307B"><enum>(9)</enum><text>in subsection
(c)(2)(A)—</text><subparagraph id="idDE389038B2924B3882E22BB6DFD3A7C9"><enum>(A)</enum><text>in clause (ii),
by striking <quote>bank secrecy or special regulatory advantages</quote> and
inserting <quote>bank, tax, corporate, trust, or financial secrecy or
regulatory advantages</quote>;</text></subparagraph><subparagraph id="id486E738560B449289D56BFA4A9D48EC7"><enum>(B)</enum><text>in clause (iii),
by striking <quote>supervisory and counter-money</quote> and inserting
<quote>supervisory, international tax enforcement, and
counter-money</quote>;</text></subparagraph><subparagraph id="id248FC50E35A94F9189B90583102DA25C"><enum>(C)</enum><text>in clause (v), by
striking <quote>banking or secrecy</quote> and inserting <quote>banking, tax,
or secrecy</quote>; and</text></subparagraph><subparagraph id="id78618B0581D84DDC9F35885C8FFB86C9"><enum>(D)</enum><text>in clause (vi),
by inserting <quote>, tax treaty, or tax information exchange agreement</quote>
after <quote>treaty</quote>;</text></subparagraph></paragraph><paragraph id="idD71D3892F441459C915913E573FB209D"><enum>(10)</enum><text>in subsection
(c)(2)(B)—</text><subparagraph id="idA56473BC19484FBCB4E784DD59A9AD86"><enum>(A)</enum><text>in clause (i), by
inserting <quote>or tax evasion</quote> after <quote>money laundering</quote>;
and</text></subparagraph><subparagraph id="id907D875D9A664A76952F44146982CA6D"><enum>(B)</enum><text>in clause (iii),
by inserting <quote>, tax evasion,</quote> after <quote>money
laundering</quote>; and</text></subparagraph></paragraph><paragraph id="idDC8D7F569F4B47AF94AE2240931F5BCB"><enum>(11)</enum><text>in subsection
(d), by inserting <quote>involving money laundering, and shall notify, in
writing, 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</quote> after <quote>such action</quote>.</text></paragraph></section><section commented="no" display-inline="no-display-inline" id="id94F9AF51995B4B1592D21D60E9EFF60A"><enum>102.</enum><header>Strengthening
the Foreign Account Tax Compliance Act (FATCA)</header><subsection commented="no" display-inline="no-display-inline" id="idF7A6FC4DA8D9438FB4D27C6206AFC86A"><enum>(a)</enum><header>Reporting
activities with respect to passive foreign investment companies</header><text display-inline="yes-display-inline">Section 1298(f) is amended by inserting
<quote>, or who directly or indirectly forms, transfers assets to, is a
beneficiary of, has a beneficial interest in, or receives money or property or
the use thereof from,</quote> after <quote>shareholder of</quote>.</text></subsection><subsection commented="no" display-inline="no-display-inline" id="id2CA8F646CCF54CE9AD5EF74E271DD5BD"><enum>(b)</enum><header>Withholdable
payments to foreign financial institutions</header><text display-inline="yes-display-inline">Section 1471(d) is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="id7238D3E4697946EBB2D2E902F68CE6AF"><enum>(1)</enum><text display-inline="yes-display-inline">by inserting <quote>or transaction</quote>
after <quote>any depository</quote> in paragraph (2)(A), and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idEF5CB2CA2F274260BA6A384FC6493B37"><enum>(2)</enum><text display-inline="yes-display-inline">by striking <quote>or any interest</quote>
and all that follows in paragraph (5)(C) and inserting <quote>derivatives, or
any interest (including a futures or forward contract, swap, or option) in such
securities, partnership interests, commodities, or derivatives.</quote>.</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idA1C0E63C876044BF91C444941A50012B"><enum>(c)</enum><header>Withholdable
payments to other foreign financial institutions</header><text display-inline="yes-display-inline">Section 1472 is amended—</text><paragraph commented="no" display-inline="no-display-inline" id="idCE96D6510C68480597B35FD4FD05A382"><enum>(1)</enum><text display-inline="yes-display-inline">by inserting <quote>as a result of any
customer identification, anti-money laundering, anti-corruption, or similar
obligation to identify account holders,</quote> after <quote>reason to
know,</quote> in subsection (b)(2), and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idE5FA28E5CA4A49349CD1FF7A21AE56B9"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting <quote>as posing a low risk of
tax evasion</quote> after <quote>this subsection</quote> in subsection
(c)(1)(G).</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id6E6B9AC449474F09BD9346714D4703D4"><enum>(d)</enum><header>Definitions</header><text display-inline="yes-display-inline">Clauses (i) and (ii) of section 1473(2)(A)
are each amended by inserting <quote>or as a beneficial owner</quote> after
<quote>indirectly</quote>.</text></subsection><subsection commented="no" display-inline="no-display-inline" id="id1CFDED9D16FF49F18C2FB343018BCA60"><enum>(e)</enum><header>Special
rules</header><text display-inline="yes-display-inline">Section 1474(c) is
amended—</text><paragraph commented="no" display-inline="no-display-inline" id="idF15FCB9F7A0F46E7ACBCDE73D4C1096D"><enum>(1)</enum><text display-inline="yes-display-inline">by inserting <quote>, except that
information provided under sections 1471(c) or 1472(b) may be disclosed to any
Federal law enforcement agency, upon request or upon the initiation of the
Secretary, to investigate or address a possible violation of United States
law</quote> after <quote>shall apply</quote> in paragraph (1), and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idF82EBABE63374B98983AF82FBBE0B48C"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting <quote>, or has had an
agreement terminated under such section,</quote> after <quote>section
1471(b)</quote> in paragraph (2).</text></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="idFE1E714D94D441A18C3294D57AD28DF4"><enum>(f)</enum><header>Information
with respect to foreign financial assets</header><text display-inline="yes-display-inline">Section 6038D(a) is amended by inserting
<quote>ownership or beneficial ownership</quote> after <quote>holds
any</quote>.</text></subsection><subsection id="id8771332DF03846C7BEF1838E959DBFB7"><enum>(g)</enum><header>Establishing
presumptions for entities and transactions involving non-FATCA
institutions</header><paragraph id="idA2F109A12D8B4B8DB24F105AA940825C"><enum>(1)</enum><header>Presumptions
for tax purposes</header><subparagraph id="id73F2EB45BC054C25B4C281814B5DC18F"><enum>(A)</enum><header>In
general</header><text>Chapter 76 is amended by inserting after section 7491 the
following new subchapter:</text><quoted-block display-inline="no-display-inline" id="id9D74A738B7314E73B56A79ADDF379DDF" style="OLC"><subchapter id="id21D7AB6E7E8144BEA7B0989927307B75"><enum>F</enum><header>Presumptions for
certain legal proceedings</header><toc><toc-entry idref="idE5D652CDDEB148FAA5E5F736D1A7FF7F" level="section">Sec. 7492. Presumptions pertaining to entities and transactions
involving non-FATCA institutions.</toc-entry></toc><section id="idE5D652CDDEB148FAA5E5F736D1A7FF7F"><enum>7492.</enum><header>Presumptions
pertaining to entities and transactions involving non-FATCA
institutions</header><subsection id="ID2398562b6c294b65890f023b0c9879e2"><enum>(a)</enum><header>Control</header><text>For
purposes of any United States civil judicial or administrative proceeding to
determine or collect tax, there shall be a rebuttable presumption that a United
States person who, directly or indirectly, formed, transferred
assets to, was a beneficiary of, had a beneficial interest in, or received
money or property or the use thereof from an entity, including a trust,
corporation, limited liability company, partnership, or foundation,
that holds an account, or in any other manner has assets, in a non-FATCA
institution, exercised control over such entity. The presumption of control
created by this subsection shall not be applied to prevent the Secretary from
determining or arguing the absence of control.</text></subsection><subsection id="ID44f40aa924db435181ebddbb96c54f3b"><enum>(b)</enum><header>Transfers of
income</header><text>For purposes of any United States civil judicial or
administrative proceeding to determine or collect tax, 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 account, or in any other manner has assets, in
a non-FATCA institution, constitutes income of such person taxable in the year
of receipt; and any amount or thing of value paid or transferred by or on
behalf of a United States person directly or indirectly to an
account, or entity that holds an account, or in any other manner
has assets, in a non-FATCA institution, represents previously unreported income
of such person taxable in the year of the transfer.</text></subsection><subsection id="IDbd6705cc730d44a7824b6792ca62de0d"><enum>(c)</enum><header>Rebutting the
presumptions</header><text>The presumptions established in this section may be
rebutted only by clear and convincing evidence, including detailed documentary,
testimonial, and transactional evidence, establishing that—</text><paragraph id="IDd7f61653873e4f9fa1acba24416aaf63"><enum>(1)</enum><text>in subsection
(a), such taxpayer exercised no control, directly or indirectly, over account
or entity at the time in question, and</text></paragraph><paragraph id="IDe5bc506d3e03422998be0699d010ce19"><enum>(2)</enum><text>in subsection
(b), such amounts or things of value did not represent income related to such
United States person.</text></paragraph><continuation-text continuation-text-level="subsection">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 document, or any other evidence supplied by a person outside
the jurisdiction of a United States court, unless such person appears before
the
court.</continuation-text></subsection></section></subchapter><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph><subparagraph id="ID7cdd13162ffb43e997f752cd00beb842"><enum>(B)</enum><text>The table of
subchapters for chapter 76 is amended by inserting after the item relating to
subchapter E the following new item:</text><quoted-block id="iddb7fc65e-879d-4243-9229-a27040e0b3ad" style="OLC"><toc><toc-entry idref="id21D7AB6E7E8144BEA7B0989927307B75" level="subchapter">Subchapter F—Presumptions for certain legal
proceedings</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subparagraph></paragraph><paragraph id="ID7084d99cff2446d3b809c2d7b603fe81"><enum>(2)</enum><header>Definition of
non-fatca institution</header><text>Section 7701(a) is amended by adding at the
end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="id6E35D8ED3AFB4D659EF18467A0933DB4" style="OLC"><paragraph id="ID1ceb08bd6d3541b191297f7499751a06"><enum>(51)</enum><header>Non-fatca
institution</header><text>The term <term>non-FATCA institution</term> means any
financial institution that does not meet the reporting requirements of section
1471(b).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph commented="no" id="id897FDF4672644FB7A4B42816E2AC6EC3"><enum>(3)</enum><header>Presumptions
for securities law purposes</header><text>Section 21 of the Securities Exchange
Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78u">15 U.S.C. 78u</external-xref>) is amended by adding at the end the following new
subsection:</text><quoted-block display-inline="no-display-inline" id="id2D1944838B02446F9CD02119D414D6D5" style="OLC"><subsection id="IDf4d8616139c04203a110e43c74c393cd"><enum>(j)</enum><header>Presumptions
pertaining to control and beneficial ownership</header><paragraph id="IDb212199fe90a4987811361ed869684ec"><enum>(1)</enum><header>Control</header><text>For
purposes of any civil judicial or administrative proceeding under this title,
there shall be a rebuttable presumption that a United States person who, directly or indirectly, formed, transferred assets to, was a beneficiary
of, had a beneficial interest in, or received money or property or the use
thereof from an entity, including a trust, corporation, limited liability
company, partnership, or foundation, that holds an account, or in any
other manner has assets, in a non-FATCA institution (as defined in section
7701(a)(51) of the Internal Revenue Code of 1986), exercised control over such
entity. The presumption of control created by this paragraph shall not be
applied to prevent the Commission from determining or arguing the absence of
control.</text></paragraph><paragraph id="ID74c02bf6b5214a3db7b94a8bd24e8a97"><enum>(2)</enum><header>Beneficial
ownership</header><text>For purposes of any civil judicial or administrative
proceeding under this title, there shall be a rebuttable presumption that
securities that are nominally owned by an entity, including a trust,
corporation, limited liability company, partnership, or foundation,
and that are held in a non-FATCA institution (as so defined), are beneficially
owned by any United States person who directly or indirectly
exercised control over such entity. 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
ownership.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="ID12c4d95c47b7432eb379aac9638c60cf"><enum>(4)</enum><header>Presumption for
reporting purposes relating to foreign financial accounts</header><text>Section
5314 of title 31, United States Code, is amended by adding at the end the
following new subsection:</text><quoted-block display-inline="no-display-inline" id="id861C1067AAAB4A4D99F4205B88D2F095" style="OLC"><subsection id="IDb13c354e8f824c5d812fd37e5da8cc21"><enum>(d)</enum><header>Rebuttable
presumption</header><text>For purposes of this section, there shall be a
rebuttable presumption that any account with a non-FATCA institution (as
defined in <external-xref legal-doc="usc" parsable-cite="usc/26/7701">section 7701(a)(51)</external-xref> of the Internal Revenue Code of 1986) contains
funds in an amount that is at least sufficient to require a report prescribed
by regulations under this
section.</text></subsection><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="IDd9fbd183ea7344e6a52b01e3ef694932"><enum>(5)</enum><header>Regulatory
authority</header><text>Not later than 180 days after the date of enactment of
this Act, 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 subsection. The Secretary and the
Chairman may, by regulation or guidance, provide that the presumption of
control shall not extend to particular classes of transactions, such as
corporate reorganizations or transactions below a specified dollar threshold,
if either determines that applying such amendments to such transactions is not
necessary to carry out the purposes of such amendments.</text></paragraph></subsection><subsection id="ID4c414671c2d545cfaf1d1d33431bc93b"><enum>(h)</enum><header>Effective
date</header><text>The amendments made by this section shall take effect on the
date which is 180 days after the date of enactment of this Act, whether or not
regulations are issued under subsection (g)(5).</text></subsection></section><section id="id5C504F6B52CE435AA920E9EC3647BC16"><enum>103.</enum><header>Treatment of
foreign corporations managed and controlled in the United States as domestic
corporations</header><subsection id="idBACDB95C263B47D28873C87FCE2AC89C"><enum>(a)</enum><header>In
general</header><text>Section 7701 is amended by redesignating subsection (p)
as subsection (q) and by inserting after subsection (o) the following new
subsection:</text><quoted-block display-inline="no-display-inline" id="id79140093B2894F6FAFD9B95A790406FB" style="OLC"><subsection id="idAA6AC941C4BA430F892CAA2B5734F0BA"><enum>(p)</enum><header>Certain
corporations managed and controlled in the United States treated as domestic
for income tax</header><paragraph id="idE32052565C9F40A9864D07831B89DE5C"><enum>(1)</enum><header>In
general</header><text>Notwithstanding subsection (a)(4), in the case of a
corporation described in paragraph (2) if—</text><subparagraph id="id3C1B3308DC3744028EAC816BA411B781"><enum>(A)</enum><text>the corporation
would not otherwise be treated as a domestic corporation for purposes of this
title, but</text></subparagraph><subparagraph id="id249293B7AC814BDD90EC723AC59EC693"><enum>(B)</enum><text>the management
and control of the corporation occurs, directly or indirectly, primarily within
the United States,</text></subparagraph><continuation-text continuation-text-level="paragraph">then,
solely for purposes of chapter 1 (and any other provision of this title
relating to chapter 1), the corporation shall be treated as a domestic
corporation.</continuation-text></paragraph><paragraph id="id67E40F69D1794680BE8145E4753BD9D2"><enum>(2)</enum><header>Corporation
described</header><subparagraph id="id880B1CF2539E432099A4C5372506D8A9"><enum>(A)</enum><header>In
general</header><text>A corporation is described in this paragraph if—</text><clause id="id59809795AC644982BE332EFA61D921F4"><enum>(i)</enum><text>the stock of such
corporation is regularly traded on an established securities market, or</text></clause><clause id="id258AC5B95A27441F9BA8E888948C54B4"><enum>(ii)</enum><text>the aggregate
gross assets of such corporation (or any predecessor thereof), including assets
under management for investors, whether held directly or indirectly, at any
time during the taxable year or any preceding taxable year is $50,000,000 or
more.</text></clause></subparagraph><subparagraph id="idBEF400D4FDD042CAA0FB32E0D1B77267"><enum>(B)</enum><header>General
exception</header><text>A corporation shall not be treated as described in this
paragraph if—</text><clause id="id1C69FD700AE84B4DAAD4AAE055A3A1E1"><enum>(i)</enum><text>such corporation
was treated as a corporation described in this paragraph in a preceding taxable
year,</text></clause><clause id="id731D8713A31F469684AE4F564E5021DD"><enum>(ii)</enum><text>such
corporation—</text><subclause id="idAF91D14CA3CC4B4787B0CB2CDE197515"><enum>(I)</enum><text>is not regularly
traded on an established securities market, and</text></subclause><subclause id="id40C3B5E5F29D46919AB11FE1F9B6786B"><enum>(II)</enum><text>has, and is
reasonably expected to continue to have, aggregate gross assets (including
assets under management for investors, whether held directly or indirectly) of
less than $50,000,000, and</text></subclause></clause><clause id="idED22F8146E124D7491157702076EEC98"><enum>(iii)</enum><text>the Secretary
grants a waiver to such corporation under this subparagraph.</text></clause></subparagraph></paragraph><paragraph id="id8EB3CA3B928440F49B97427DF1B48450"><enum>(3)</enum><header>Management and
control</header><subparagraph id="idCA75CD2B5D774D38829E148821B2E797"><enum>(A)</enum><header>In
general</header><text>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 States.</text></subparagraph><subparagraph id="id480C9965EC994F4E9FF497A5AD37E22E"><enum>(B)</enum><header>Executive
officers and senior management</header><text>Such regulations shall provide
that—</text><clause id="id19893E630CA54EABA5191DF4D94754E3"><enum>(i)</enum><text>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 strategic, financial, and operational policies of the
corporation are located primarily within the United States, and</text></clause><clause id="id07C2B6E253FC4A4DA6907746729D294F"><enum>(ii)</enum><text>individuals who
are not executive officers and senior management of the corporation (including
individuals who are officers or employees of other corporations in the same
chain of corporations as the corporation) shall be treated as executive
officers and senior management if such individuals exercise the day-to-day
responsibilities of the corporation described in clause (i).</text></clause></subparagraph><subparagraph id="idEA1B1D7C54FD4FC6BB9A4A0A3D1509C4"><enum>(C)</enum><header>Corporations
primarily holding investment assets</header><text>Such regulations shall also
provide that the management and control of a corporation shall be treated as
occurring primarily within the United States if—</text><clause id="idF57272915E084F14BB8E0D8DC99E872D"><enum>(i)</enum><text>the assets of
such corporation (directly or indirectly) consist primarily of assets being
managed on behalf of investors, and</text></clause><clause id="idDCF158FD6B60403297ED00C5D980DC1F"><enum>(ii)</enum><text>decisions about
how to invest the assets are made in the United
States.</text></clause></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="id38E8A919F7F74A39A0CD3165C6121442"><enum>(b)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning on or after the date which is 2 years after the date of the
enactment of this Act, whether or not regulations are issued under section
7701(p)(3) of the Internal Revenue Code of 1986, as added by this
section.</text></subsection></section><section commented="no" display-inline="no-display-inline" id="id485CA00ABAD04157892337B8B6D2C093"><enum>104.</enum><header>Reporting
United States beneficial owners of foreign owned financial accounts</header><subsection id="ID3f1120c8e1db4a778ffdba12d7bddad8"><enum>(a)</enum><header>In
general</header><text>Subpart B of part III of subchapter A of chapter 61 is
amended by inserting after section 6045B the following new sections:</text><quoted-block display-inline="no-display-inline" id="id892D4F7F427C4CA0A49075EEF45138C0" style="OLC"><section id="IDc0e81a22bb5d444f8596a8476238bb4c"><enum>6045C.</enum><header>Returns
regarding United States beneficial owners of financial accounts located in the
United States and held in the name of a foreign entity</header><subsection id="IDd32f2629b00f48b29fd94c855961d627"><enum>(a)</enum><header>Requirement of
return</header><text>If—</text><paragraph id="IDdae9a5deb4524a01b7263e88ea26c2e3"><enum>(1)</enum><text>any withholding
agent under sections 1441 and 1442 has the control, receipt, custody, disposal,
or payment of any amount constituting gross income from sources within the
United States of any foreign entity, including a trust, corporation, limited
liability company, partnership, or foundation (other than an entity with shares
regularly traded on an established securities market), and</text></paragraph><paragraph id="ID502541325d2040d5b8e36ef0e0fdabe8"><enum>(2)</enum><text>such withholding
agent determines for purposes of titles 14, 18, or 31 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 (hereafter in this section referred to
as <term>United States beneficial owner</term>),</text></paragraph><continuation-text continuation-text-level="subsection">then the
withholding agent shall make a return according to the forms or regulations
prescribed by the Secretary.</continuation-text></subsection><subsection id="IDa9c2351499aa4574a7111117b2290c42"><enum>(b)</enum><header>Required
information</header><text>For purposes of subsection (a) the information
required to be included on the return shall include—</text><paragraph id="ID4690fc5e52ed44049c96072a763ca968"><enum>(1)</enum><text>the name,
address, and, if known, the taxpayer identification number of the United States
beneficial owner,</text></paragraph><paragraph id="IDc74980a586df4f7cbb466c21a09ff9cd"><enum>(2)</enum><text>the known facts
pertaining to the relationship of such United States beneficial owner to the
foreign entity and the account,</text></paragraph><paragraph id="IDa523e99dd7314c5da8063565fc0ea0bd"><enum>(3)</enum><text>the gross amount
of income from sources within the United States (including gross proceeds from
brokerage transactions), and</text></paragraph><paragraph id="ID0d68005591c1498e840dd509328384dc"><enum>(4)</enum><text>such other
information as the Secretary may by forms or regulations provide.</text></paragraph></subsection><subsection id="ID7e3b7070a02f425bb458f5cb2251690a"><enum>(c)</enum><header>Statements To
Be furnished to beneficial owners with respect to whom information is required
To Be reported</header><text>A withholding agent required to make a return
under subsection (a) shall furnish to each United States beneficial owner whose
name is required to be set forth in such return a statement showing—</text><paragraph id="ID5551b4b5cefe4fbdafd8a10ba983a1d5"><enum>(1)</enum><text>the name,
address, and telephone number of the information contact of the person required
to make such return, and</text></paragraph><paragraph id="ID11be2c700a574c0782cc67d416c111ea"><enum>(2)</enum><text>the information
required to be shown on such return with respect to such United States
beneficial owner.</text></paragraph><continuation-text continuation-text-level="subsection">The
written statement required under the preceding sentence shall be furnished to
the United States beneficial owner on or before January 31 of the year
following the calendar year for which the return under subsection (a) was
required to be made. In the event the person filing such return does not have a
current address for the United States beneficial owner, such written statement
may be mailed to the address of the foreign entity.</continuation-text></subsection></section><section id="IDa8e1e6e331ae461181c9792881505afd"><enum>6045D.</enum><header>Returns by
financial institutions regarding establishment of accounts in non-FATCA
institutions</header><subsection id="ID56d55e532e0041b4b09a9282831175c0"><enum>(a)</enum><header>Requirement of
return</header><text>Any financial institution directly or indirectly opening a
bank, brokerage, or other financial account for or on behalf of an offshore
entity, including a trust, corporation, limited liability company, partnership,
or foundation (other than an entity with shares regularly traded on an
established securities market), in a non-FATCA institution (as defined in
section 7701(a)(51)) at the direction of, on behalf of, or for the benefit of a
United States person shall make a return according to the forms or regulations
prescribed by the Secretary.</text></subsection><subsection id="ID3f9b21e9d2b74319a28f10f495eb807a"><enum>(b)</enum><header>Required
information</header><text>For purposes of subsection (a) the information
required to be included on the return shall include—</text><paragraph id="ID74ec78810b854f62bc212d30e1bbe048"><enum>(1)</enum><text>the name,
address, and taxpayer identification number of such United States
person,</text></paragraph><paragraph id="IDb04f08eca6f04361954a64d60af67318"><enum>(2)</enum><text>the name and
address of the financial institution at which a financial account is opened,
the type of account, the account number, the name under which the account was
opened, and the amount of the initial deposit,</text></paragraph><paragraph id="ID317334d632144cffb2959ac18878c0bc"><enum>(3)</enum><text>if the account is
held in the name of an entity, the name and address of such entity, the type of
entity, and the name and address of any company formation agent or other
professional employed to form or acquire the entity, and</text></paragraph><paragraph id="ID71046cdaf6584a2d8cc9493618118c1e"><enum>(4)</enum><text>such other
information as the Secretary may by forms or regulations provide.</text></paragraph></subsection><subsection id="IDaa2447dbfe464b5fbee1d8aa72a5892e"><enum>(c)</enum><header>Statements To
be furnished to United States persons with respect to whom information is
required To be reported</header><text>A financial institution required to make
a return under subsection (a) shall furnish to each United States person whose
name is required to be set forth in such return a statement showing—</text><paragraph id="ID66ca090b90d8442faded17f92c274428"><enum>(1)</enum><text>the name,
address, and telephone number of the information contact of the person required
to make such return, and</text></paragraph><paragraph id="ID9116de0c722a4b38b14f5c6acf4faa55"><enum>(2)</enum><text>the information
required to be shown on such return with respect to such United States
person.</text></paragraph><continuation-text continuation-text-level="subsection">The
written statement required under the preceding sentence shall be furnished to
such United States person on or before January 31 of the year following the
calendar year for which the return under subsection (a) was required to be
made.</continuation-text></subsection><subsection id="ID36c2cb173c324d219ed4090d077d77b2"><enum>(d)</enum><header>Exemption</header><text>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 persons, accounts, or
entities is not necessary to carry out the purposes of this
section.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="idBB861C689FD94CF48CB0AAC49C93F1E1"><enum>(b)</enum><header>Penalties</header><paragraph id="id7024908A780F4CA6A9EBC0500A05E5C5"><enum>(1)</enum><header>Returns</header><text>Section
6724(d)(1)(B) is amended by striking <quote>or</quote> at the end of clause
(xxiv), by striking <quote>and</quote> at the end of clause (xxv), and by
adding after clause (xxv) the following new clauses:</text><quoted-block display-inline="no-display-inline" id="id6996B6E7CC4044258247056E3B8B9F9B" style="OLC"><clause id="id80D20C0B4375492795BC92C06ADEA47C"><enum>(xxvi)</enum><text>section
6045C(a) (relating to returns regarding United States beneficial owners of
financial accounts located in the United States and held in the name of a
foreign entity), or</text></clause><clause id="id94D14B28162A4CD8830049C8906E9BAE"><enum>(xxvii)</enum><text>section
6045D(a) (relating to returns by financial institutions regarding establishment
of accounts at non-FATCA institutions),
and</text></clause><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="id4BFC7F367CC643E5BD7D4D365DF6EE3A"><enum>(2)</enum><header>Payee
statements</header><text>Section 6724(d)(2) is amended by striking
<quote>or</quote> at the end of subparagraph (GG), by striking the period at
the end of subparagraph (HH), and by inserting after subparagraph (HH) the
following new subparagraphs:</text><quoted-block display-inline="no-display-inline" id="idA552A5E61E7C4624924BD3B15E3ADD92" style="OLC"><subparagraph id="id51BA97E5DF144214892FF947E3C875EB"><enum>(II)</enum><text>section 6045C(c)
(relating to returns regarding United States beneficial owners of financial
accounts located in the United States and held in the name of a foreign
entity),</text></subparagraph><subparagraph id="id76657412F91048218E8DBB627F4390E8"><enum>(JJ)</enum><text>section 6045D(c)
(relating to returns by financial institutions regarding establishment of
accounts at non-FATCA
institutions).</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id04E1BCF9F2594B1DACC49E22642A32B2"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of sections for subpart B of part III of
subchapter A of chapter 61 is amended by inserting after the item relating to
section 6045B the following new items:</text><quoted-block display-inline="no-display-inline" id="id6E89AA517D144A0E8E77BCFB43660410" style="OLC"><toc><toc-entry bold="off" level="section">Sec. 6045C. Returns regarding
United States beneficial owners of financial accounts located in the United
States and held in the name of a foreign entity.</toc-entry><toc-entry bold="off" level="section">Sec. 6045D. Returns by
financial institutions regarding establishment of accounts at non-FATCA
institutions.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" id="id9C4AA45377A1450DAA1AD425553E2890"><enum>(d)</enum><header>Additional
penalties</header><paragraph commented="no" id="id5444194394AC4560915BC9CCF5DD83F8"><enum>(1)</enum><header>Additional
penalties on banks</header><text>Section 5239(b)(1) of the Revised Statutes of
the United States (<external-xref legal-doc="usc" parsable-cite="usc/12/93">12 U.S.C. 93(b)(1)</external-xref>) is amended by inserting <quote>or any of
the provisions of <external-xref legal-doc="usc" parsable-cite="usc/26/6045D">section 6045D</external-xref> of the Internal Revenue Code of 1986,</quote>
after <quote>any regulation issued pursuant to,</quote>.</text></paragraph><paragraph commented="no" id="id12EA4C062FF54EB3B604A36923656731"><enum>(2)</enum><header>Additional
penalties on securities firms</header><text>Section 21(d)(3)(A) of the
Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78u">15 U.S.C. 78u(d)(3)(A)</external-xref>) is amended by
inserting <quote>any of the provisions of section 6045D of the Internal Revenue
Code of 1986,</quote> after <quote>the rules or regulations
thereunder,</quote>.</text></paragraph></subsection><subsection id="ID1c879c843dd04293aaffd5e652c0d555"><enum>(e)</enum><header>Regulatory
authority and effective date</header><paragraph id="ID624de18b48c6403e8a1d77a54464f5ad"><enum>(1)</enum><header>Regulatory
Authority</header><text>Not later than 180 days after the date of the enactment
of this Act, the Secretary of the Treasury shall adopt regulations, forms, or
other guidance necessary to implement this section.</text></paragraph><paragraph id="ID6279a539b7144c9fb2409cbe417d9653"><enum>(2)</enum><header>Effective
Date</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6045C">Section 6045C</external-xref> of the Internal Revenue Code of 1986 (as added
by this section) and the amendment made by subsection (d)(1) shall take effect
with respect to amounts paid into foreign owned accounts located in the United
States after December 31 of the year of the date of the enactment of this Act.
Section 6045D of such Code (as so added) and the amendment made by subsection
(d)(2) shall take effect with respect to accounts opened after December 31 of
the year of the date of the enactment of this Act.</text></paragraph></subsection></section><section id="idDCAB087D2DA7446E8077EBAA39360431"><enum>105.</enum><header>Swap payments
made from the United States to persons offshore</header><subsection id="ID077c339df6ce4388abaf7779eada2c25"><enum>(a)</enum><header>Tax on swap
payments received by foreign persons</header><text>Section 871(a)(1) is
amended—</text><paragraph id="ID0e5000a8a1524319b3e30bc6e2d72a4c"><enum>(1)</enum><text>by inserting
<quote>swap payments (as identified in section 1256(b)(2)(B)),</quote> after
<quote>annuities,</quote> in subparagraph (A), and</text></paragraph><paragraph id="ID7c226cedb9444ebe82f3f53d41ac6dfd"><enum>(2)</enum><text>by adding at the
end the following new sentence: <quote>In the case of swap payments, the source
of a swap payment is determined by reference to the location of the
payor.</quote>.</text></paragraph></subsection><subsection id="ID14996352c3674d03a7d0951ac34b7f05"><enum>(b)</enum><header>Tax on swap
payments received by foreign corporations</header><text>Section 881(a) is
amended—</text><paragraph id="id41C223B9895A4CAAA2040B90EFE88085"><enum>(1)</enum><text>by inserting
<quote>swap payments (as identified in section 1256(b)(2)(B)),</quote> after
<quote>annuities,</quote> in paragraph (1), and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id26222EA9671D48B591071B3986741120"><enum>(2)</enum><text>by adding at the
end the following new sentence: <quote>In the case of swap payments, the source
of a swap payment is determined by reference to the location of the
payor.</quote>.</text></paragraph></subsection></section><enum>II</enum><header>Other measures
To combat tax haven abuses</header><section id="idb2d8ca6cd7fd46668987b45191a0b64a"><enum>201.</enum><header>Country-by-country
reporting</header><subsection id="ide6fab63543044a31a13efb4c6117f65c"><enum>(a)</enum><header>Country-by-Country
reporting</header><text>Section 13 of the Securities Exchange Act of 1934 (15
U.S.C. 78m) is amended by adding at the end the following new
subsection:</text><quoted-block display-inline="no-display-inline" id="idF816141485EC424DB9F1348AB5429704" style="OLC"><subsection id="id3eaf0b9475d74097807391f39104862f"><enum>(s)</enum><header>Disclosure of
financial performance on a country-by-Country basis</header><paragraph id="idde3a9832636146c6af4f8ea35b61ef90"><enum>(1)</enum><header>Definitions</header><text>In
this subsection—</text><subparagraph id="id884f71c41dff4bffa8d7600ae7062108"><enum>(A)</enum><text>the term
<term>issuer group</term> means the issuer, each subsidiary of the issuer, and
each entity under the control of the issuer; and</text></subparagraph><subparagraph id="id992c19694fd049bb9222e052bd40d866"><enum>(B)</enum><text>the term
<term>country of operation</term> means each country in which a member of the
issuer group is incorporated, organized, maintains employees, or conducts
significant business activities.</text></subparagraph></paragraph><paragraph id="idc8af4ab244ad4009afa0ed31a9f1f9f6"><enum>(2)</enum><header>Rules
required</header><text>The Commission shall issue rules that require each
issuer to include in an annual report filed by the issuer with the Commission
information on a country-by-country basis during the covered period, consisting
of—</text><subparagraph id="id414403ad8a354b4e93c8cbdf6539bb93"><enum>(A)</enum><text>a list of each
country of operation and the name of each entity of the issuer group domiciled
in each country of operation;</text></subparagraph><subparagraph id="id45a308515e074e8c91936b40b22ae82d"><enum>(B)</enum><text>the number of
employees physically working in each country of operation;</text></subparagraph><subparagraph id="idd5ed418981be47fdb443996fec36364f"><enum>(C)</enum><text>the total pre-tax
gross revenues of each member of the issuer group in each country of
operation;</text></subparagraph><subparagraph id="id70ef57c82d2744689fd898c84a64faea"><enum>(D)</enum><text>the total amount
of payments made to governments by each member of the issuer group in each
country of operation, without exception, including, and set forth according
to—</text><clause id="idceca863b94d448ceae0f6268e536e49f"><enum>(i)</enum><text>total Federal,
regional, local, and other tax assessed against each member of the issuer group
with respect to each country of operation during the covered period; and</text></clause><clause id="id13af75eb24ab49469ff19cdb55042b16"><enum>(ii)</enum><text>after any tax
deductions, tax credits, tax forgiveness, or other tax benefits or waivers, the
total amount of tax paid from the treasury of each member of the issuer group
to the government of each country of operation during the covered period;
and</text></clause></subparagraph><subparagraph id="id2942534a4c9b4a178dd4036376cc2831"><enum>(E)</enum><text>such other
financial information as the Commission may determine is necessary or
appropriate in the public interest or for the protection of
investors.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="idaf87b39b8a2b4fb7815252d8afbc3fbf"><enum>(b)</enum><header>Rulemaking</header><paragraph id="id767d0f04c77a498eb74df7e9ad7756ed"><enum>(1)</enum><header>Deadlines</header><text>The
Securities and Exchange Commission (in this section referred to as the
<term>Commission</term>) shall—</text><subparagraph id="id778F8AD856604B8491BFBA82A2273A7F"><enum>(A)</enum><text>not later than
270 days after the date of enactment of this Act, issue a proposed rule to
carry out this section and the amendment made by this section; and</text></subparagraph><subparagraph id="idED051274BAC84C2E97281162F637475A"><enum>(B)</enum><text>not later than 1
year after the date of enactment of this Act, issue a final rule to carry out
this section and the amendment made by this section.</text></subparagraph></paragraph><paragraph id="idafc6e48cfa1c4161af1c1ade18941827"><enum>(2)</enum><header>Data
format</header><text>The information required to be provided by this section
shall be provided by the issuer in a report in a format prescribed by the
Commission, and such report shall be made available to the public online, in
such format as the Commission shall prescribe.</text></paragraph><paragraph id="id7b1ac2108aba4e4fad0c23f7aa7d0485"><enum>(3)</enum><header>Effective
date</header><text>Subsection (s) of section 13 of the Securities Exchange Act
of 1934, as added by this section, shall become effective 1 year after the date
on which the Commission issues a final rule under this section.</text></paragraph></subsection></section><section id="id194f4b0f30f845198be786f70029597c"><enum>202.</enum><header>Penalty for
failing to disclose offshore holdings</header><subsection id="idb2e7a87d75f040108f2b49b68d2832a6"><enum>(a)</enum><header>Securities
Exchange Act of 1934</header><text>Section 21(d)(3)(B) of the Securities
Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78u">15 U.S.C. 78u(d)(3)(B)</external-xref>) is amended by adding at the end
the following:</text><quoted-block display-inline="no-display-inline" id="id3af33a13341d428a89f0ee6a6abf18b9" style="OLC"><clause id="ide0941908f92d457ea6812c47fbd87978"><enum>(iv)</enum><header>Fourth
tier</header><text>Notwithstanding clauses (i), (ii), and (iii), for each
violation, the amount of the penalty shall not exceed $1,000,000 for any
natural person or $10,000,000 for any other person, if—</text><subclause id="id31024d5274a7422fa4adeab4862c0268"><enum>(I)</enum><text>such person
directly or indirectly controlled any foreign entity, including any trust,
corporation, limited liability company, partnership, or foundation through
which an issuer purchased, sold, or held equity or debt instruments;</text></subclause><subclause id="id37b13df1da244dec9ae62a0287e6a69e"><enum>(II)</enum><text>such person
knowingly or recklessly failed to disclose any such holding, purchase, or sale
by the issuer; and</text></subclause><subclause id="idc96e537ceff54827aa17133cd4581c18"><enum>(III)</enum><text>the holding,
purchase, or sale would have been otherwise subject to disclosure by the issuer
or such person under this
title.</text></subclause></clause><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id8bc0ecbeb92c4e0693a977c2d9d69cd2"><enum>(b)</enum><header>Securities Act
of 1933</header><text>Section 20(d)(2) of the Securities Act of 1933 (15 U.S.C.
77t(d)(2)) is amended by adding at the end the following:</text><quoted-block display-inline="no-display-inline" id="id7e5aace015984e8f83a55f079c68c376" style="OLC"><subparagraph id="id2b1cac86e6a247a6ac14f6de9d45e6b3"><enum>(D)</enum><header>Fourth
tier</header><text>Notwithstanding subparagraphs (A), (B), and (C), for each
violation, the amount of the penalty shall not exceed $1,000,000 for any
natural person or $10,000,000 for any other person, if—</text><clause id="id57d5fe16e1ae411ba7a538624558fe0b"><enum>(i)</enum><text>such person
directly or indirectly controlled any foreign entity, including any trust,
corporation, limited liability company, partnership, or foundation through
which an issuer purchased, sold, or held equity or debt instruments;</text></clause><clause id="id597e3b051154493ba88a28fa7926b139"><enum>(ii)</enum><text>such person
knowingly or recklessly failed to disclose any such holding, purchase, or sale
by the issuer; and</text></clause><clause id="ida365e76340e94b7fb789ff4a1f7b9e30"><enum>(iii)</enum><text>the holding,
purchase, or sale would have been otherwise subject to disclosure by the issuer
or such person under this
title.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="ide517353e4696408f958b911982c87090"><enum>(c)</enum><header>Investment
Advisers Act of 1940</header><text>Section 203(i)(2) of the Investment Advisers
Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-3">15 U.S.C. 80b–3(i)(2)</external-xref>) is amended by adding at the end the
following:</text><quoted-block display-inline="no-display-inline" id="id8f8763bf77c348a3abe9c75c723c8ecc" style="OLC"><subparagraph id="idc2e5e4fd685a4bc48914afd5d32dfb08"><enum>(D)</enum><header>Fourth
tier</header><text>Notwithstanding subparagraphs (A), (B), and (C), for each
violation, the amount of the penalty shall not exceed $1,000,000 for any
natural person or $10,000,000 for any other person, if—</text><clause id="idf7491a6e6b674fd4b7748210697eae87"><enum>(i)</enum><text>such person
directly or indirectly controlled any foreign entity, including any trust,
corporation, limited liability company, partnership, or foundation through
which an issuer purchased, sold, or held equity or debt instruments;</text></clause><clause id="id98f4fc6aabc74349859deb9464ac47b4"><enum>(ii)</enum><text>such person
knowingly or recklessly failed to disclose any such holding, purchase, or sale
by the issuer; and</text></clause><clause id="id2b1809ed52164a23bf9de71bbc44e91e"><enum>(iii)</enum><text>the holding,
purchase, or sale would have been otherwise subject to disclosure by the issuer
or such person under this
title.</text></clause></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="id1b614cd19e6f47de90e1443fb7d8cae0"><enum>203.</enum><header>Deadline for
anti-money laundering rule for investment advisers</header><subsection id="id52a8c1e52dd2455db939dc4cd70888ee"><enum>(a)</enum><header>Anti-Money
laundering obligations for investment advisers</header><text>Section 5312(a)(2)
of title 31, United States Code, is amended—</text><paragraph id="id901bf991b896447c8303aacdabad482e"><enum>(1)</enum><text>in subparagraph
(Y), by striking <quote>or</quote> at the end;</text></paragraph><paragraph id="idc7cad785dc5d464c83fc73d4ee0e50d4"><enum>(2)</enum><text>by redesignating
subparagraph (Z) as subparagraph (BB); and</text></paragraph><paragraph id="id08ce25641ded4e469a087152e707948f"><enum>(3)</enum><text>by inserting
after subparagraph (Y) the following:</text><quoted-block display-inline="no-display-inline" id="idfcc4ad5164764bfe9fe562cfa6a04b44" style="OLC"><subparagraph id="ida34a322b27034906b347987393de7627"><enum>(Z)</enum><text>an investment
adviser;</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="id8622215e52874d20b2d8d53b0bbbb36f"><enum>(b)</enum><header>Rules
required</header><text>The Secretary of the Treasury shall—</text><paragraph id="id6AB5A8C37C374E1E8D252BF9D0044FBD"><enum>(1)</enum><text>in consultation
with the Chairman of the Securities and Exchange Commission and the Chairman of
the Commodity Futures Trading Commission, not later than 270 days after the
date of enactment of this Act, publish a proposed rule in the Federal Register
to carry out the amendments made by this section; and</text></paragraph><paragraph id="id1bbed7f35fa34c32b2c9db447709cf6b"><enum>(2)</enum><text>not later than
180 days after the date of enactment of this Act, publish a final rule in the
Federal Register on the matter described in paragraph (1).</text></paragraph></subsection><subsection id="id17ab831351844865afff1cb17113f518"><enum>(c)</enum><header>Contents</header><text>The
final rule published under this section shall require, at a minimum, each
investment adviser (as defined in section 202(a)(11) of the Investment Advisers
Act of 1940 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-2">15 U.S.C. 80b–2(a)(11)</external-xref>)) registered with the Securities and
Exchange Commission pursuant to section 203 of that Act (15 U.S.C.
80b–3)—</text><paragraph id="idABAC833ABB134361BFCBF910226D3B2D"><enum>(1)</enum><text>to submit
suspicious activity reports and establish an anti-money laundering program
under subsections (g) and (h), respectively, of <external-xref legal-doc="usc" parsable-cite="usc/31/5318">section 5318</external-xref> of title 31,
United States Code; and</text></paragraph><paragraph id="id12B9451139334EDE8111D8AF0C694ABC"><enum>(2)</enum><text>to comply
with—</text><subparagraph id="idCCFF947BE4944021A76948BFC5C17617"><enum>(A)</enum><text>the customer
identification program requirements under <external-xref legal-doc="usc" parsable-cite="usc/31/5318">section 5318(l)</external-xref> of title 31, United
States Code; and</text></subparagraph><subparagraph id="id4A986CFE9D2B4BD8B2EB4DE7E02AE1D8"><enum>(B)</enum><text>the due diligence
requirements under <external-xref legal-doc="usc" parsable-cite="usc/31/5318">section 5318(i)</external-xref> of title 31, United States Code.</text></subparagraph></paragraph></subsection></section><section id="id54ae0abf4c054a39bd4f19a6bc229598"><enum>204.</enum><header>Anti-money
laundering requirements for formation agents</header><subsection id="idb9aae6504a7c45c6adcaed59a2d61a52"><enum>(a)</enum><header>Anti-Money
laundering obligations for formation agents</header><text>Section 5312(a)(2) of
title 31, United States Code, as amended by section 203 of this Act, is amended
by inserting after subparagraph (Z) the following:</text><quoted-block display-inline="no-display-inline" id="idde9fee7494bf476eab2ec4ab5eba1717" style="OLC"><subparagraph id="id76e001b57441474391c996f5dd0046da"><enum>(AA)</enum><text>any person
engaged in the business of forming new corporations, limited liability
companies, partnerships, trusts, or other legal entities;
or</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id152cd768d21049dbaf3c4ac993f2b0f5"><enum>(b)</enum><header>Deadline for
anti-Money laundering rule for formation agents</header><paragraph id="id1ac484ec134a4ab4866fa3f5590c41ce"><enum>(1)</enum><header>Proposed
rule</header><text>The Secretary of the Treasury, in consultation with the
Attorney General of the United States, the Secretary of Homeland Security, and
the Commissioner of Internal Revenue, shall—</text><subparagraph id="id8898D73B8D6F4BF4A51A19C7AB92C0FB"><enum>(A)</enum><text>not later than
120 days after the date of enactment of this Act, publish a proposed rule in
the Federal Register requiring persons described in section 5312(a)(2)(AA) of
title 31, United States Code, as added by this section, to establish anti-money
laundering programs under section 5318(h) of that title; and</text></subparagraph><subparagraph id="id9186abad13b346a4bcce6ba908a45cb9"><enum>(B)</enum><text>not later than
270 days after the date of enactment of this Act, publish a final rule in the
Federal Register on the matter described in subparagraph (A).</text></subparagraph></paragraph><paragraph id="id56700cf06425450fa08f9fd4cc40ffc9"><enum>(2)</enum><header>Exclusions</header><text>The
rule promulgated under this subsection shall exclude from the category of
persons engaged in the business of forming new corporations or other
entities—</text><subparagraph id="id96ed6be2ef454cc8bc21146f9efd1afe"><enum>(A)</enum><text>any government
agency; and</text></subparagraph><subparagraph id="id75cae6444fc34c5aa32397820bf2fa36"><enum>(B)</enum><text>any attorney or
law firm that uses a paid formation agent operating within the United States to
form such corporations or other entities.</text></subparagraph></paragraph></subsection></section><section id="id943F503126C543BE862E09A8B5B6FBDE"><enum>205.</enum><header>Strengthening
John Doe summons proceedings</header><subsection id="idAD01FC475B804C9A81D67C0E9C3133C7"><enum>(a)</enum><header>In
general</header><text>Subsection (f) of section 7609 is amended to read as
follows:</text><quoted-block display-inline="no-display-inline" id="idD6B18C1880FD4C7E9397F5EF0E367EA1" style="OLC"><subsection id="id5A3345F44FC547BAA3829CFDCA4CB363"><enum>(f)</enum><header>Additional
requirement in the case of a John Doe summons</header><paragraph id="id95EB7A5F0B0A47039BB86899A7B1D13F"><enum>(1)</enum><header>General
Rule</header><text>Any summons described in subsection (c)(1) 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—</text><subparagraph id="id4BD6034E54994B95BFD973CDD5E38E98"><enum>(A)</enum><text>the summons
relates to the investigation of a particular person or ascertainable group or
class of persons,</text></subparagraph><subparagraph id="idEA8C856213BC452ABAC27E9FD03CC522"><enum>(B)</enum><text>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 law, and</text></subparagraph><subparagraph id="id0748EBD76B584BD6AB1F132FAB3BE16C"><enum>(C)</enum><text>the information
sought to be obtained from the examination of the records or testimony (and the
identity of the person or persons with respect to whose liability the summons
is issued) is not readily available from other sources.</text></subparagraph></paragraph><paragraph id="IDa73e1efa1ab74872a78e3e4471d46240"><enum>(2)</enum><header>Exception</header><text>Paragraph
(1) shall not apply to any summons which specifies that it is limited to
information regarding a United States correspondent account (as defined in
<external-xref legal-doc="usc" parsable-cite="usc/31/5318A">section 5318A(e)(1)(B)</external-xref> of title 31, United States Code) or a United States
payable-through account (as defined in section 5318A(e)(1)(C) of such title) of
a financial institution that is held at a non-FATCA institution (as defined in
section 7701(a)(51)).</text></paragraph><paragraph id="IDca3bbdbdfcb44547afc2e9c381afcc05"><enum>(3)</enum><header>Presumption in
cases involving non-fatca institutions</header><text>For purposes of this
section, 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 (as defined in section 7701(a)(51)), 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 law.</text></paragraph><paragraph id="idB8C5EF97DCAA48CDBBBE2343B891F5B8"><enum>(4)</enum><header>Project John
Doe summonses</header><subparagraph id="idABB97A0F4D18405E8880B22666FED739"><enum>(A)</enum><header>In
general</header><text>Notwithstanding the requirements of paragraph (1), the
Secretary may issue a summons described in paragraph (1) if the summons—</text><clause id="idF5C997BB699447448CD0D09DF8748C79"><enum>(i)</enum><text>relates to a
project which is approved under subparagraph (B),</text></clause><clause id="id7219C115FF384A93A392058D9CD60865"><enum>(ii)</enum><text>is issued to a
person who is a member of the group or class established under subparagraph
(B)(i), and</text></clause><clause id="id1F96D4097DAB4EF796CEDCA24C685261"><enum>(iii)</enum><text>is issued
within 3 years of the date on which such project was approved under
subparagraph (B).</text></clause></subparagraph><subparagraph id="idB80F5B26EE394E69A680C3285531E537"><enum>(B)</enum><header>Approval of
projects</header><text>A project may only be approved under this subparagraph
after a court proceeding in which the Secretary establishes that—</text><clause id="id0F6842818DB54ED88C5D849611EDBF91"><enum>(i)</enum><text>any summons
issued with respect to the project will be issued to a member of an
ascertainable group or class of persons, and</text></clause><clause id="id5C58AA1B37BA4ABA9C67AF1F34BBAD20"><enum>(ii)</enum><text>any summons
issued with respect to such project will meet the requirements of paragraph
(1).</text></clause></subparagraph><subparagraph id="idE150F36D1FD843D0B5B42D9888FA0C17"><enum>(C)</enum><header>Extension</header><text>Upon
application of the Secretary, the court may extend the time for issuing such
summonses under subparagraph (A)(i) for additional 3-year periods, but only if
the court continues to exercise oversight of such project under subparagraph
(D).</text></subparagraph><subparagraph id="id9003E072C852419A8EDC541CE31DD41F"><enum>(D)</enum><header>Ongoing court
oversight</header><text>During any period in which the Secretary is authorized
to issue summonses in relation to a project approved under subparagraph (B)
(including during any extension under subparagraph (C)), the Secretary shall
report annually to the court on the use of such authority, provide copies of
all summonses with such report, and comply with the court's direction with
respect to the issuance of any John Doe summons under such
project.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id58EB5C4C2E584171BE347A73C1A9D41E"><enum>(b)</enum><header>Jurisdiction of
court</header><paragraph id="id8DAC8A508B134757A76FD53F4099F960"><enum>(1)</enum><header>In
general</header><text>Paragraph (1) of section 7609(h) is amended by inserting
after the first sentence the following new sentence: <quote>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 (f)(2)(B).</quote>.</text></paragraph><paragraph id="idA334D37650164C3994AEA99EB7A45848"><enum>(2)</enum><header>Conforming
amendment</header><text>The first sentence of section 7609(h)(1) is amended by
striking <quote>(f)</quote> and inserting <quote>(f)(1)</quote>.</text></paragraph></subsection><subsection id="id5B7D67303EBA48AAA14C79F9E5D49642"><enum>(c)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to summonses
issued after the date of the enactment of this Act.</text></subsection></section><section id="id7B679E7CCEDD42ACA24E10D18C2D1F98"><enum>206.</enum><header>Improving
enforcement of foreign financial account reporting</header><subsection id="id6935F711F3054F718E23410ACFD1C994"><enum>(a)</enum><header>Clarifying the
connection of foreign financial account reporting to tax
administration</header><text>Paragraph (4) of section 6103(b) is amended by
adding at the end the following new sentence:</text><quoted-block display-inline="no-display-inline" id="idE89C6F78E9814D3A9584D026A8B3768B" style="OLC"><quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">For
purposes of subparagraph (A)(i), <external-xref legal-doc="usc" parsable-cite="usc/31/5314">section 5314</external-xref> of title 31, United States Code,
and sections 5321 and 5322 of such title (as such sections pertain to such
section 5314), shall be considered related
statutes.</quoted-block-continuation-text><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="idF18FC55273684A88995E657C65EE0FC5"><enum>(b)</enum><header>Simplifying the
calculation of foreign financial account reporting
penalties</header><text><external-xref legal-doc="usc" parsable-cite="usc/31/5321">Section 5321(a)(5)(D)(ii)</external-xref> of title 31, United States
Code, is amended by striking <quote>the balance in the account at the time of
the violation</quote> and inserting <quote>the highest balance in the account
during the reporting period to which the violation relates</quote>.</text></subsection><subsection commented="no" display-inline="no-display-inline" id="idB4853AB2F1FF4EF4B5665768309C2D29"><enum>(c)</enum><header>Clarifying the
use of suspicious activity reports under the Bank Secrecy Act for civil tax law
enforcement</header><text><external-xref legal-doc="usc" parsable-cite="usc/31/5319">Section 5319</external-xref> of title 31, United States Code, is
amended by inserting <quote>the civil and criminal enforcement divisions of the
Internal Revenue Service,</quote> after <quote>including</quote>.</text></subsection></section><enum>III</enum><header>Ending corporate offshore
tax avoidance</header><section display-inline="no-display-inline" id="H2E9F6CC15B284B3D91F7B5E5044DA200" section-type="subsequent-section"><enum>301.</enum><header>Allocation of
expenses and taxes on basis of repatriation of foreign income</header><subsection id="H43EF7191267E403DB37900BD3893E4B7"><enum>(a)</enum><header>In
general</header><text>Part III of subchapter N of chapter 1 is amended by
inserting after subpart G the following new subpart:</text><quoted-block display-inline="no-display-inline" id="HD52A43474A684C5BBFFF8CD500D88694" style="OLC"><subpart id="H379C5A4DBB9B4D0CB2A0AB45FFF2A822"><enum>H</enum><header>Special Rules for
Allocation of Foreign-Related Deductions and Foreign Tax Credits</header><toc container-level="subpart-container" idref="H379C5A4DBB9B4D0CB2A0AB45FFF2A822" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration"><toc-entry idref="H7AE93E10584D4685B195E2E37CE49BA4" level="section">Sec. 975. Deductions allocated to deferred foreign income may
not offset United States source income.</toc-entry><toc-entry idref="H72FAB5B02F094996A8936C84B561B7AC" level="section">Sec. 976. Amount of foreign taxes computed on overall
basis.</toc-entry><toc-entry idref="H3C198D1DE8E5436391F18F65A192533C" level="section">Sec. 977. Application of subpart.</toc-entry></toc><section id="H7AE93E10584D4685B195E2E37CE49BA4"><enum>975.</enum><header>Deductions
allocated to deferred foreign income may not offset United States source
income</header><subsection id="H558D4E2E71564782AF80ED7BE28D77AE"><enum>(a)</enum><header>Current year
deductions</header><text display-inline="yes-display-inline">For purposes of
this chapter, foreign-related deductions for any taxable year—</text><paragraph id="H3D4516BCB89B44BFA222A3EAC2E800E8"><enum>(1)</enum><text>shall be taken
into account for such taxable year only to the extent that such deductions are
allocable to currently-taxed foreign income, and</text></paragraph><paragraph id="H28B891782CD740DA8699D3006DAE383C"><enum>(2)</enum><text>to the extent not
so allowed, shall be taken into account in subsequent taxable years as provided
in subsection (b).</text></paragraph><continuation-text continuation-text-level="subsection">Foreign-related deductions shall be
allocated to currently taxed foreign income in the same proportion which
currently taxed foreign income bears to the sum of currently taxed foreign
income and deferred foreign income.</continuation-text></subsection><subsection id="HC7F23126B1A44ABC977F7FEB92F63C9B"><enum>(b)</enum><header>Deductions
related to repatriated deferred foreign income</header><paragraph id="HE2A9287405DA41C7A943725EA92F3FE"><enum>(1)</enum><header>In
general</header><text>If there is repatriated foreign income for a taxable
year, the portion of the previously deferred deductions allocated to the
repatriated foreign income shall be taken into account for the taxable year as
a deduction allocated to income from sources outside the United States. Any
such amount shall not be included in foreign-related deductions for purposes of
applying subsection (a) to such taxable year.</text></paragraph><paragraph id="H4716D1C410B64466AD1FFC5C23F9DBA8"><enum>(2)</enum><header>Portion of
previously deferred deductions</header><text>For purposes of paragraph (1), the
portion of the previously deferred deductions allocated to repatriated foreign
income is—</text><subparagraph id="H551707681223474AB2108E064631E00"><enum>(A)</enum><text>the amount which
bears the same proportion to such deductions, as</text></subparagraph><subparagraph id="H55EBAF4B3CFE43E9977E628D42E3A0CB"><enum>(B)</enum><text>the repatriated
income bears to the previously deferred foreign income.</text></subparagraph></paragraph></subsection><subsection id="HFFED56E6BE3D40E2841DA0899314E470"><enum>(c)</enum><header>Definitions and
special rule</header><text display-inline="yes-display-inline">For purposes of
this section—</text><paragraph id="HD8A1B4AD82EE4FC78635BA44EF4517E2"><enum>(1)</enum><header>Foreign-related
deductions</header><text>The term <term>foreign-related deductions</term> means
the total amount of deductions and expenses which would be allocated or
apportioned to gross income from sources without the United States for the
taxable year if both the currently-taxed foreign income and deferred foreign
income were taken into account.</text></paragraph><paragraph display-inline="no-display-inline" id="HCD70A802166C4C82A83200DC4EF19B8D"><enum>(2)</enum><header>Currently-taxed
foreign income</header><text>The term <term>currently-taxed foreign
income</term> means the amount of gross income from sources without the United
States for the taxable year (determined without regard to repatriated foreign
income for such year).</text></paragraph><paragraph display-inline="no-display-inline" id="H97033661171740CAB35B4364E4B9CD57"><enum>(3)</enum><header>Deferred foreign
income</header><text>The term <term>deferred foreign income</term> means the
excess of—</text><subparagraph id="H79626A01C131458E961626248E3499FE"><enum>(A)</enum><text display-inline="yes-display-inline">the amount that would be includible in
gross income under subpart F of this part for the taxable year if—</text><clause id="HE5FDDEF44D4945928DAEDC1F782C51ED"><enum>(i)</enum><text>all controlled
foreign corporations were treated as one controlled foreign corporation,
and</text></clause><clause id="HBB8BF3A0A12149B296AE83FB48049E71"><enum>(ii)</enum><text>all earnings and
profits of all controlled foreign corporations were subpart F income (as
defined in section 952), over</text></clause></subparagraph><subparagraph id="H0485DC431041498A9350ADEFE3E6A012"><enum>(B)</enum><text>the sum of—</text><clause id="H23CFAAB66A814FF68EBA6608F7E98725"><enum>(i)</enum><text>all dividends
received during the taxable year from controlled foreign corporations,
plus</text></clause><clause id="H704E50F236BE41AC9421A54BACCCED5"><enum>(ii)</enum><text>amounts includible
in gross income under section 951(a).</text></clause></subparagraph></paragraph><paragraph id="H584938FDA0224A21A507768466FE0121"><enum>(4)</enum><header>Previously
deferred foreign income</header><text display-inline="yes-display-inline">The
term <term>previously deferred foreign income</term> means the aggregate amount
of deferred foreign income for all prior taxable years to which this part
applies, determined as of the beginning of the taxable year, reduced by the
repatriated foreign income for all such prior taxable years.</text></paragraph><paragraph id="HBC687988A56142B39213934B758832BC"><enum>(5)</enum><header>Repatriated
foreign income</header><text>The term <term>repatriated foreign income</term>
means the amount included in gross income on account of distributions out of
previously deferred foreign income.</text></paragraph><paragraph id="H2F202257ABB64BC0BF5B247CF0E7471C"><enum>(6)</enum><header>Previously
deferred deductions</header><text display-inline="yes-display-inline">The term
<term>previously deferred deductions</term> means the aggregate amount of
foreign-related deductions not taken into account under subsection (a) for all
prior taxable years (determined as of the beginning of the taxable year),
reduced by any amounts taken into account under subsection (b) for such prior
taxable years.</text></paragraph><paragraph id="H4C5FBB0E1F4B4BA396CD3D4D73007FFC"><enum>(7)</enum><header>Treatment of
certain foreign taxes</header><subparagraph id="H242E7E3B86844475BF3E725E1F386DD7"><enum>(A)</enum><header>Paid by
controlled foreign corporation</header><text display-inline="yes-display-inline">Section 78 shall not apply for purposes of
determining currently-taxed foreign income and deferred foreign income.</text></subparagraph><subparagraph id="H047053A21E294F6C94600063633D9703"><enum>(B)</enum><header>Paid by
taxpayer</header><text>For purposes of determining currently-taxed foreign
income, gross income from sources without the United States shall be reduced by
the aggregate amount of taxes described in the applicable paragraph of section
901(b) which are paid by the taxpayer (without regard to sections 902 and 960)
during the taxable year.</text></subparagraph></paragraph><paragraph id="HCB48493BE32A4A5CA500DB53A71EDE06"><enum>(8)</enum><header>Coordination
with section 976</header><text>In determining currently-taxed foreign income
and deferred foreign income, the amount of deemed foreign tax credits shall be
determined with regard to section 976.</text></paragraph></subsection></section><section id="H72FAB5B02F094996A8936C84B561B7AC"><enum>976.</enum><header>Amount of
foreign taxes computed on overall basis</header><subsection id="H055BDFFE1FF44810A6D76C36652D8790"><enum>(a)</enum><header>Current year
allowance</header><text display-inline="yes-display-inline">For purposes of
this chapter, the amount taken into account as foreign income taxes for any
taxable year shall be an amount which bears the same ratio to the total foreign
income taxes for that taxable year as—</text><paragraph id="HBD351B120AEF48B186DF2D20C0314F4E"><enum>(1)</enum><text>the
currently-taxed foreign income for such taxable year, bears to</text></paragraph><paragraph id="H141B124864E649C296851E00002FF91D"><enum>(2)</enum><text>the sum of the
currently-taxed foreign income and deferred foreign income for such
year.</text></paragraph><continuation-text continuation-text-level="subsection">The
portion of the total foreign income taxes for any taxable year not taken into
account under the preceding sentence for a taxable year shall only be taken
into account as provided in subsection (b) (and shall not be taken into account
for purposes of applying sections 902 and 960).</continuation-text></subsection><subsection display-inline="no-display-inline" id="HE59C0DB4729E4338B46F632039EDFEBC"><enum>(b)</enum><header>Allowance
related to repatriated deferred foreign income</header><paragraph id="HB18D79F8C96E41918C29D54585BE224D"><enum>(1)</enum><header>In
general</header><text display-inline="yes-display-inline">If there is
repatriated foreign income for any taxable year, the portion of the previously
deferred foreign income taxes paid or accrued during such taxable year shall be
taken into account for the taxable year as foreign taxes paid or accrued. Any
such taxes so taken into account shall not be included in foreign income taxes
for purposes of applying subsection (a) to such taxable year.</text></paragraph><paragraph id="HA8EE892845CE4DF79F54152BA2D21DFF"><enum>(2)</enum><header>Portion of
previously deferred foreign income taxes</header><text>For purposes of
paragraph (1), the portion of the previously deferred foreign income taxes
allocated to repatriated deferred foreign income is—</text><subparagraph id="HD5C846BB74614C518129AAB7E4640086"><enum>(A)</enum><text>the amount which
bears the same proportion to such taxes, as</text></subparagraph><subparagraph id="H9E8C200714044E71BC304C49528C94F3"><enum>(B)</enum><text>the repatriated
deferred income bears to the previously deferred foreign income.</text></subparagraph></paragraph></subsection><subsection id="H0A0F0DF4F54546EC00F327A8886516F8"><enum>(c)</enum><header>Definitions and
special rule</header><text display-inline="yes-display-inline">For purposes of
this section—</text><paragraph id="H762F03EB740D4865B7BB3F9ED8AC1110"><enum>(1)</enum><header>Previously
deferred foreign income taxes</header><text display-inline="yes-display-inline">The term <term>previously deferred foreign
income taxes</term> means the aggregate amount of total foreign income taxes
not taken into account under subsection (a) for all prior taxable years
(determined as of the beginning of the taxable year), reduced by any amounts
taken into account under subsection (b) for such prior taxable years.</text></paragraph><paragraph id="H7C989BA37B7B4CDAABAA907CD116FB14"><enum>(2)</enum><header>Total foreign
income taxes</header><text display-inline="yes-display-inline">The term
<term>total foreign income taxes</term> means the sum of foreign income taxes
paid or accrued during the taxable year (determined without regard to section
904(c)) plus the increase in foreign income taxes that would be paid or accrued
during the taxable year under sections 902 and 960 if—</text><subparagraph id="HA105F74CCE6B4884864D89194E19CDE8"><enum>(A)</enum><text>all controlled
foreign corporations were treated as one controlled foreign corporation,
and</text></subparagraph><subparagraph id="H7C90AE2052B04A65A3B954EB67EAE042"><enum>(B)</enum><text>all earnings and
profits of all controlled foreign corporations were subpart F income (as
defined in section 952).</text></subparagraph></paragraph><paragraph id="HACC5F78C308B45EB8BA32400DBAB1362"><enum>(3)</enum><header>Foreign income
taxes</header><text display-inline="yes-display-inline">The term <term>foreign
income taxes</term> means any income, war profits, or excess profits taxes paid
by the taxpayer to any foreign country or possession of the United
States.</text></paragraph><paragraph id="H9388A62A5A98481AB711B77B0FCA56B"><enum>(4)</enum><header>Currently-taxed
foreign income and deferred foreign income</header><text display-inline="yes-display-inline">The terms <term>currently-taxed foreign
income</term> and <term>deferred foreign income</term> have the meanings given
such terms by section 975(c)).</text></paragraph></subsection></section><section id="H3C198D1DE8E5436391F18F65A192533C"><enum>977.</enum><header>Application of
subpart</header><text display-inline="no-display-inline">This subpart—</text><paragraph id="H278B262C823B431BB6E1FF00B1441C4"><enum>(1)</enum><text>shall be applied
before subpart A, and</text></paragraph><paragraph id="HDF333812472943F2A07CC7B697DBB61E"><enum>(2)</enum><text>shall be applied
separately with respect to the categories of income specified in section
904(d)(1).</text></paragraph></section></subpart><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HA73E30222EEC40A7B91D60C64C17D5E"><enum>(b)</enum><header>Clerical
amendment</header><text>The table of subparts for part III of subpart N of
chapter 1 is amended by inserting after the item relating to subpart G the
following new item:</text><quoted-block display-inline="no-display-inline" id="HB28BF2482CD94943AF5D591BFD88EC8F" style="OLC"><toc container-level="quoted-block-container" idref="HD52A43474A684C5BBFFF8CD500D88694" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration"><toc-entry idref="H379C5A4DBB9B4D0CB2A0AB45FFF2A822" level="subpart">Subpart H. Special Rules for Allocation of Foreign-Related
Deductions and Foreign Tax
Credits</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H9125BD1C6DE742C1A41C1C44F13D57C8"><enum>(c)</enum><header>Effective
date</header><text display-inline="yes-display-inline">The amendments made by
this section shall apply to taxable years beginning after the date of the
enactment of this Act.</text></subsection></section><section commented="no" display-inline="no-display-inline" id="HA5CB8DDB6144456F86CAB91F55046482" section-type="subsequent-section"><enum>302.</enum><header>Excess income from
transfers of intangibles to low-taxed affiliates treated as subpart F
income</header><subsection id="HCC639F9DC48641AC959DA1DF23E9E15D"><enum>(a)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsection (a) of
section 954 is amended by inserting after paragraph (3) the following new
paragraph:</text><quoted-block display-inline="no-display-inline" id="H46868DAEA38E402D9B49911EFD83A165" style="OLC"><paragraph id="H2B23C19F98F043E9BB3E3BEB0250A0F5"><enum>(4)</enum><text display-inline="yes-display-inline">the foreign base company excess intangible
income for the taxable year (determined under subsection (f) and reduced as
provided in subsection (b)(5)),
and</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="HE6F6A338ECB6444F825CD667C7950823"><enum>(b)</enum><header>Foreign base
company excess intangible income</header><text>Section 954 is amended by
inserting after subsection (e) the following new subsection:</text><quoted-block display-inline="no-display-inline" id="H4B0FA89F547A48C79FD6D3B9863C1664" style="OLC"><subsection id="H06F2C141F2744BADBFEDA8E456E5E26D"><enum>(f)</enum><header>Foreign base
company excess intangible income</header><text display-inline="yes-display-inline">For purposes of subsection (a)(4) and this
subsection:</text><paragraph id="HE04C7B27416A4491973DA6FE2E9F24C0"><enum>(1)</enum><header>Foreign base
company excess intangible income defined</header><subparagraph id="H3806387D9A1C490796D3E0183584E893"><enum>(A)</enum><header>In
general</header><text>The term <term>foreign base company excess intangible
income</term> means, with respect to any covered intangible, the excess
of—</text><clause id="H315BE72D69EF4A65B1B95DA07856AC6C"><enum>(i)</enum><text>the sum of—</text><subclause id="HA78F4B22B611414DA23F87D7059657C6"><enum>(I)</enum><text>gross income from
the sale, lease, license, or other disposition of property in which such
covered intangible is used directly or indirectly, and</text></subclause><subclause id="H4A1CB1371C244FF98FB0219CBBA2E53D"><enum>(II)</enum><text>gross income from
the provision of services related to such covered intangible or in connection
with property in which such covered intangible is used directly or indirectly,
over</text></subclause></clause><clause id="H4722E7A25B2A4AE3B3A0F1CACF1DE222"><enum>(ii)</enum><text>150 percent of
the costs properly allocated and apportioned to the gross income taken into
account under clause (i) other than expenses for interest and taxes and any
expenses which are not directly allocable to such gross income.</text></clause></subparagraph><subparagraph commented="no" id="H01E013546B2A40F3A524CDE354AE3A53"><enum>(B)</enum><header>Same country
income not taken into account</header><text>If—</text><clause id="HCE17A60C5B344DDA942AB3099F345488"><enum>(i)</enum><text>the sale, lease,
license, or other disposition of the property referred to in subparagraph
(A)(i)(I) is for use, consumption, or disposition in the country under the laws
of which the controlled foreign corporation is created or organized, or</text></clause><clause id="H24898428011A4E7CAD7C646E0945E4BB"><enum>(ii)</enum><text>the services
referred to in subparagraph (A)(i)(II) are performed in such country,</text></clause><continuation-text continuation-text-level="subparagraph">the
gross income from such sale, lease, license, or other disposition, or provision
of services, shall not be taken into account under subparagraph (A)(i).</continuation-text></subparagraph></paragraph><paragraph id="HDCA04CB801CE41828CFE08472C6A867C"><enum>(2)</enum><header>Exception based
on effective foreign income tax rate</header><subparagraph id="HCC99CC5315F94F95B8C7A2AC032A253C"><enum>(A)</enum><header>In
general</header><text>Foreign base company excess intangible income shall not
include the applicable percentage of any item of income received by a
controlled foreign corporation if the taxpayer establishes to the satisfaction
of the Secretary that such income was subject to an effective rate of income
tax imposed by a foreign country in excess of 5 percent.</text></subparagraph><subparagraph id="HA96EA1C1C62848B2AC3B4F3551B91D4D"><enum>(B)</enum><header>Applicable
percentage</header><text>For purposes of subparagraph (A), the term
<term>applicable percentage</term> means the ratio (expressed as a
percentage), not greater than 100 percent, of—</text><clause id="H2BC3BC0C7E124B599D6809510B940844"><enum>(i)</enum><text>the number of
percentage points by which the effective rate of income tax referred to in
subparagraph (A) exceeds 5 percentage points, over</text></clause><clause id="H3FCEED575D5F4A29A0C014F5D64B3D79"><enum>(ii)</enum><text>10 percentage
points.</text></clause></subparagraph><subparagraph id="H03FEAF123D594B599FD76536A1748512"><enum>(C)</enum><header>Treatment of
losses in determining effective rate of foreign income tax</header><text>For
purposes of determining the effective rate of income tax imposed by any foreign
country—</text><clause id="H3D89782CA2454EEB8C1224E20B9859B6"><enum>(i)</enum><text>such effective
rate shall be determined without regard to any losses carried to the relevant
taxable year, and</text></clause><clause id="HA6A38321C6624FAFA940C2A96FE10644"><enum>(ii)</enum><text>to the extent the
income with respect to such intangible reduces losses in the relevant taxable
year, such effective rate shall be treated as being the effective rate which
would have been imposed on such income without regard to such losses.</text></clause></subparagraph></paragraph><paragraph id="HB5546DFCA6C04646B3D3CEC7B6FE0362"><enum>(3)</enum><header>Covered
intangible</header><text>The term <term>covered intangible</term> means, with
respect to any controlled foreign corporation, any intangible property (as
defined in section 936(h)(3)(B))—</text><subparagraph id="HB0F168A477FF41A4B17A6E504F161E0F"><enum>(A)</enum><text>which is sold,
leased, licensed, or otherwise transferred (directly or indirectly) to such
controlled foreign corporation from a related person, or</text></subparagraph><subparagraph id="H63040072F71C481CB63C019E859EC0F0"><enum>(B)</enum><text>with respect to
which such controlled foreign corporation and one or more related persons has
(directly or indirectly) entered into any shared risk or development agreement
(including any cost sharing agreement).</text></subparagraph></paragraph><paragraph id="HAD1DCA54E6F54502AE7D67DFB83D1429"><enum>(4)</enum><header>Related
person</header><text>The term <term>related person</term> has the meaning
given such term in subsection
(d)(3).</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H2469ACE3A4A8404DA421F986E17D6C36"><enum>(c)</enum><header>Separate basket
for foreign tax credit</header><text display-inline="yes-display-inline">Subsection (d) of section 904 is amended by
redesignating paragraph (7) as paragraph (8) and by inserting after paragraph
(6) the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="H28A528D57BA448D298950BB6A02510E9" style="OLC"><paragraph id="H6AB06F67B21742C6B28DBE2BABA2B4AD"><enum>(7)</enum><header>Separate
application to foreign base company excess intangible income</header><subparagraph id="H1D5F0B41A410433BBC58475602CA4759"><enum>(A)</enum><header>In
general</header><text display-inline="yes-display-inline">Subsections (a), (b),
and (c) of this section and sections 902, 907, and 960 shall be applied
separately with respect to each item of income which is taken into account
under section 954(a)(4) as foreign base company excess intangible
income.</text></subparagraph><subparagraph id="HFD4764940D1C4DA69FF74512FC50BBAF"><enum>(B)</enum><header>Regulations</header><text>The
Secretary may issue such regulations or other guidance as is necessary or
appropriate to carry out the purposes of this subsection, including regulations
or other guidance which provides that related items of income may be aggregated
for purposes of this
paragraph.</text></subparagraph></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="H173F260176D4482795268FB1D278F9F6"><enum>(d)</enum><header>Conforming
amendments</header><paragraph id="H5705B69AC7A744D9BEFFDC1C46BC86D6"><enum>(1)</enum><text>Paragraph (4) of
section 954(b) is amended by inserting <quote>foreign base company excess
intangible income described in subsection (a)(4) or</quote> before
<quote>foreign base company oil-related income</quote> in the last sentence
thereof.</text></paragraph><paragraph id="HADE64B57E4344BCD8BB933AFF8A3B15F"><enum>(2)</enum><text>Subsection (b) of
section 954 is amended by adding at the end the following new paragraph:</text><quoted-block display-inline="no-display-inline" id="HC39BAE812F40403CB2FC20C9CD23D623" style="OLC"><paragraph id="H2E2A5ADBF2BB49AD90F1C626880A828A"><enum>(7)</enum><header>Foreign base
company excess intangible income not treated as another kind of base company
income</header><text display-inline="yes-display-inline">Income of a
corporation which is foreign base company excess intangible income shall not be
considered foreign base company income of such corporation under paragraph (2),
(3), or (5) of subsection
(a).</text></paragraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection id="H874447D075624ADE9E979D57FF18CE6C"><enum>(e)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to taxable
years beginning after the date of the enactment of this Act.</text></subsection></section><section id="id721844706450447B8815468A0278B98D"><enum>303.</enum><header>Limitations on
income shifting through intangible property transfers</header><subsection id="idEF5DE56E8D284FF9B86BD8E0767F3344"><enum>(a)</enum><header>Clarification
of definition of intangible asset</header><text>Clause (vi) of section
936(h)(3)(B) is amended by inserting <quote>(including any section 197
intangible described in subparagraph (A), (B), or (C)(i) of subsection (d)(1)
of such section)</quote> after <quote>item</quote>.</text></subsection><subsection id="id01B91024456E4EF582351E32FB3288EF"><enum>(b)</enum><header>Clarification
of allowable valuation methods</header><paragraph id="id4E3241D35F4B43669E6D89297D42C3DC"><enum>(1)</enum><header>Foreign
corporations</header><text>Paragraph (2) of section 367(d) is amended by adding
at the end the following new subparagraph:</text><quoted-block act-name="" id="id30F3A2053D5947A2B51FCB11503D1014" style="OLC"><subparagraph id="id53789CA957874BE9B191AA0ACE83EE92"><enum>(D)</enum><header>Regulatory
authority</header><text>For purposes of the last sentence of subparagraph (A),
the Secretary may require—</text><clause id="id8F5E5F77D5424FFEA73093EA43DA25AB"><enum>(i)</enum><text>the valuation of
transfers of intangible property on an aggregate basis, or</text></clause><clause id="id5D5A103616A3464B98F3082779064038"><enum>(ii)</enum><text>the valuation of
such a transfer on the basis of the realistic alternatives to such a
transfer,</text></clause><continuation-text continuation-text-level="subparagraph">in any
case in which the Secretary determines that such basis is the most reliable
means of valuation of such
transfers.</continuation-text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph><paragraph id="id2F075E334B684285AFE21AF9AF19179E"><enum>(2)</enum><header>Allocation
among taxpayers</header><text>Section 482 is amended by adding at the end the
following: <quote>For purposes of the preceding sentence, the Secretary may
require the valuation of transfers of intangible property on an aggregate basis
or the valuation of such a transfer on the basis of the realistic alternatives
to such a transfer, in any case in which the Secretary determines that such
basis is the most reliable means of valuation of such
transfers.</quote>.</text></paragraph></subsection><subsection id="idC6556F73D1E14042B629920A36E33DA5"><enum>(c)</enum><header>Effective
date</header><paragraph id="id0E40DA24FEB94BA6BC45F6277910284A"><enum>(1)</enum><header>In
general</header><text>The amendments made by this section shall apply to
transfers in taxable years beginning after the date of the enactment of this
Act.</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="idBD57E83689FE4EBE986523373BBDA043"><enum>(2)</enum><header>No
inference</header><text>Nothing in the amendment made by subsection (a) shall
be construed to create any inference with respect to the application of section
936(h)(3) of the Internal Revenue Code of 1986, or the authority of the
Secretary of the Treasury to provide regulations for such application, on or
before the date of the enactment of such amendment.</text></paragraph></subsection></section><section id="idE32F684939214034A3D53BBC755E6ACF"><enum>304.</enum><header>Repeal of
check-the-box rules for certain foreign entities and CFC look-thru
rules</header><subsection id="id51AE8FBF0F304745887C8E4ADE888AD1"><enum>(a)</enum><header>Check-the-Box
rules</header><text>Paragraph (3) of section 7701(a) is amended—</text><paragraph id="id14BD9B41645B4DA3B9D46BC15F1F3A14"><enum>(1)</enum><text display-inline="yes-display-inline">by striking <quote>and</quote>, and</text></paragraph><paragraph commented="no" display-inline="no-display-inline" id="id9D6D0A8E9DE14CF2AC095AAB577662B3"><enum>(2)</enum><text display-inline="yes-display-inline">by inserting after <quote>insurance
companies</quote> the following:</text><quoted-block display-inline="yes-display-inline" id="id766A2D22E5B34299AA71C8FCF0F59F21" style="OLC"><text>, and any
foreign business entity that—</text><subparagraph commented="no" display-inline="no-display-inline" id="idB0FABBAB42754B51B22BC98B25A2BA98"><enum>(A)</enum><text display-inline="yes-display-inline">has a single owner that does not have
limited liability, or</text></subparagraph><subparagraph commented="no" display-inline="no-display-inline" id="idAA0EBD8EE7AD4B3080702539939D2C54"><enum>(B)</enum><text display-inline="yes-display-inline">has one or more members all of which have
limited
liability</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></paragraph></subsection><subsection commented="no" display-inline="no-display-inline" id="id9C83766C08BF418B883F55D8719344C7"><enum>(b)</enum><header>Look-Thru
rule</header><text>Subparagraph (C) of section 954(c)(6) is amended to read as
follows:</text><quoted-block display-inline="no-display-inline" id="idFE4CCA90BBC84D2C985F84AE2BBC041C" style="OLC"><subparagraph commented="no" display-inline="no-display-inline" id="id51A5AA15FE9D498FAE410EBAC2B71F23"><enum>(C)</enum><header>Termination</header><text>Subparagraph
(A) shall not apply to dividends, interest, rents, and royalties received or
accrued after the date of the enactment of the
<short-title>Stop Tax Haven Abuse
Act</short-title>.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection></section><section id="id44193026BB094E399434B77F5DDE244F"><enum>305.</enum><header>Prohibition on
offshore loan abuse</header><subsection id="id1B06C2DA93F848E78CC5D8941EB822BA"><enum>(a)</enum><header>In
general</header><text>Subpart F of part III of subchapter N of chapter 1 is
amended by adding at the end the following new section:</text><quoted-block display-inline="no-display-inline" id="idCFF9E5AAC2A4439EA3AFB967CBC27E88" style="OLC"><section id="id827D9997B42B492F8D22E56DC9BDC932"><enum>966.</enum><header>Income
inclusion for loans to United States shareholders from controlled foreign
corporations</header><subsection id="id69FD7D69ABCA44EA81FF7F66683DCC9D"><enum>(a)</enum><header>In
general</header><text>In the case of a United States shareholder, there shall
be included in income for the taxable year an amount equal to the disqualified
CFC loan amount.</text></subsection><subsection id="id7D374D1BB4074B2F8126B2E756D896F6"><enum>(b)</enum><header>Disqualified
CFC loan amount</header><paragraph id="idB3029B308E0B49F8B51C4D2FB14A5273"><enum>(1)</enum><header>In
general</header><text>For purposes of this section, the disqualified CFC loan
amount for any taxable year is an amount equal to the lesser of—</text><subparagraph id="id9F8E51AFC4724460B2465200B0AAE26A"><enum>(A)</enum><text>the aggregate
amount of obligations of the United States shareholder which originated in such
taxable year and are held (directly or indirectly) by controlled foreign
corporations, or</text></subparagraph><subparagraph id="idE7DF3B90310E42ADAA0EB1379D7A0D90"><enum>(B)</enum><text>the foreign group
earnings amount.</text></subparagraph></paragraph><paragraph id="idBB0F1D4116B244D780D06FE0D8E995B3"><enum>(2)</enum><header>Exception</header><text>In
determining the amount of obligations under subparagraph (A), there shall be
excluded any obligation described in section 956(c)(2)(C).</text></paragraph><paragraph id="id19C2B8B7ED314A8B976B4DC635B36E70"><enum>(3)</enum><header>Carryforward of
certain amounts</header><text>If, for any taxable year, the amount under
subparagraph (A) exceeds the amount under subparagraph (B), such excess shall
be taken into account as an obligation to which subparagraph (A) applies for
the succeeding taxable year.</text></paragraph><paragraph id="id493555CED84B4A919B9B6243C2C29D1F"><enum>(4)</enum><header>Foreign group
earnings amount</header><text>For purposes of this section, the term
<term>foreign group earnings amount</term> means the aggregate earnings and
profits of all controlled foreign corporations in the worldwide affiliated
group (as defined in section 864(f)(1)(C)) of the United States shareholder,
determined—</text><subparagraph id="id690AFF1A222C470CA6153598F72F721C"><enum>(A)</enum><text>as of the last
day of the taxable year of the United States shareholder, and</text></subparagraph><subparagraph id="id4C38E1E7C66346B2B581439FF6EAAC0C"><enum>(B)</enum><text>without regard to
any distributions made during such taxable year.</text></subparagraph></paragraph></subsection><subsection id="id97323432A634496BAA374FCA1972C099"><enum>(c)</enum><header>Denial of
interest deduction</header><text>No deduction shall be allowed for interest
paid or accrued with respect to obligations taken into account under subsection
(b).</text></subsection><subsection id="id6E56CFF7EB74447C9A47BECB767D2623"><enum>(d)</enum><header>Treatment of
income source</header><text>Any amount included in income under subsection (a)
shall be treated as income from sources within the United
States.</text></subsection></section><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="id1F1B4903F6E6459D92A30AE99E5F5260"><enum>(b)</enum><header>Coordination
with section 956</header><text>Paragraph (2) of section 956(c) is amended by
striking <quote>and</quote> at the end of subparagraph (K), by striking the
period at the end of subparagraph (L)(ii) and inserting <quote>; and</quote>,
and by inserting after subparagraph (L) the following new subparagraph:</text><quoted-block display-inline="no-display-inline" id="idFF6C7F0041114ED7A4A9533592FA1560" style="OLC"><subparagraph id="id5632944EDD2C4FDAABEC01EE92695706"><enum>(M)</enum><text display-inline="yes-display-inline">any obligation which is taken into account
in determining the disqualified CFC loan amount under section
966.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection id="idEBA0925FC983406BA20943AD9786574F"><enum>(c)</enum><header>Clerical
amendment</header><text>The table of sections for subpart F of part III of
subchapter N of chapter 1 is amended by adding at the end the following new
item:</text><quoted-block id="iddf161191-7484-48d6-8e03-3ca5ebf42da6" style="OLC"><toc><toc-entry idref="id827D9997B42B492F8D22E56DC9BDC932" level="section">Sec. 966. Income inclusion for loans to certain United States
shareholders from controlled foreign
corporations.</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block></subsection><subsection commented="no" display-inline="no-display-inline" id="id7DB39A38474E44FA8FCDA8F68DD4B1F9"><enum>(d)</enum><header>Effective
date</header><text>The amendments made by this section shall apply to
obligations originated after the date of the enactment of this Act.</text></subsection></section>