115 S851 IS: Stop Tax Haven Abuse Act
U.S. Senate
2017-04-05
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—Ending corporate offshore tax avoidanceSec. 101. Allocation of expenses and taxes on basis of repatriation of foreign income.Sec. 102. Excess income from transfers of intangibles to low-taxed affiliates treated as subpart F income.Sec. 103. Limitations on income shifting through intangible property transfers.Sec. 104. Repeal of check-the-box rules for certain foreign entities and CFC look-thru rules.Sec. 105. Restrictions on deduction for interest expense of members of financial reporting groups with excess domestic indebtedness.Sec. 106. Treatment of foreign corporations managed and controlled in the United States as domestic corporations.Sec. 107. Swap payments made from the United States to persons offshore.Sec. 108. Modifications to rules relating to inverted corporations.Sec. 109. Country-by-country reporting.Title II—Additional measures to combat tax evasionSec. 201. Authorizing special measures against foreign jurisdictions, financial institutions, and others that significantly impede United States tax enforcement.Sec. 202. Strengthening the Foreign Account Tax Compliance Act (FATCA).Sec. 203. Reporting United States beneficial owners of foreign owned financial accounts.Sec. 204. Penalty for failing to disclose offshore holdings.Sec. 205. Deadline for anti-money laundering rule for investment advisers.Sec. 206. Anti-money laundering requirements for formation agents.Sec. 207. Strengthening John Doe summons proceedings.Sec. 208. Improving enforcement of foreign financial account reporting. <enum>I</enum><header>Ending corporate offshore tax avoidance</header> <section commented="no" display-inline="no-display-inline" id="H9B19B7DE41B1420E99BD2BA0DA4ADA5E" section-type="subsequent-section"><enum>101.</enum><header>Allocation of expenses and taxes on basis of repatriation of foreign income</header> <subsection commented="no" id="HBD8A69BE716E43C5AC367174B5654FEB"><enum>(a)</enum><header>In general</header><text>Part III of subchapter N of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by inserting after subpart G the following new subpart:</text>
<quoted-block display-inline="no-display-inline" id="HB33852748B69451A86ACF92227DC6494" style="OLC">
<subpart commented="no" id="H914BFE002A964FFCB9A71152A92BFE93"><enum>H</enum><header>Special Rules for Allocation of Foreign-Related Deductions and Foreign Tax Credits</header><toc container-level="subpart-container" idref="H914BFE002A964FFCB9A71152A92BFE93" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration"><toc-entry idref="H107700224B9E4165A881E00C6E6F07A9" level="section">Sec. 975. Deductions allocated to deferred foreign income may not offset United States source
income.</toc-entry><toc-entry idref="H8D1E09E9A34549D2AD10DCC7C9C99CBD" level="section">Sec. 976. Amount of foreign taxes computed on overall basis.</toc-entry><toc-entry idref="H56C4BF8A42EE4420AB3643F586AF0EF0" level="section">Sec. 977. Application of subpart.</toc-entry></toc>
<section commented="no" id="H107700224B9E4165A881E00C6E6F07A9"><enum>975.</enum><header>Deductions allocated to deferred foreign income may not offset United States source income</header>
<subsection commented="no" id="HFA64917A23F4484DBD0183C6AE4E3A86"><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 commented="no" id="H41F8D96E2CB2490896E795337B36E383"><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 commented="no" id="H9F04590E99754207869C5D257609622B"><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 commented="no" 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 commented="no" id="H29E2AAB144864AC2A98C7260EF599D72"><enum>(b)</enum><header>Deductions related to repatriated deferred foreign income</header>
<paragraph commented="no" id="HF0CC9827BCB4413F9ACD9825080DD3DA"><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 commented="no" id="H7E80D5B532FC4F33A64555A430C53E30"><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 commented="no" id="H1AB8CDB157274167906319F58EE84B42"><enum>(A)</enum><text>the amount which bears the same proportion to such deductions, as</text> </subparagraph><subparagraph commented="no" id="H65B36D1B59624F12BD50DE9ED0A81BD4"><enum>(B)</enum><text>the repatriated income bears to the previously deferred foreign income.</text>
</subparagraph></paragraph></subsection><subsection commented="no" id="HB6D86150A2174CA89FFDE8CE7E26D779"><enum>(c)</enum><header>Definitions and special rule</header><text display-inline="yes-display-inline">For purposes of this section—</text> <paragraph commented="no" id="H83BD9B5F49AF43969E5151C45B12B757"><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 commented="no" display-inline="no-display-inline" id="HAAC05B15FB9F4717B28BB5A45F97E298"><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 commented="no" display-inline="no-display-inline" id="H0971EF1B0AFC46C98F705B99987996FE"><enum>(3)</enum><header>Deferred foreign income</header><text>The term <term>deferred foreign income</term> means the excess of—</text> <subparagraph commented="no" id="HCB48505CF2794896A6F913D4D4BEBBB9"><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 commented="no" id="H0DFA5E84F1C1412499635F9E7AC0496E"><enum>(i)</enum><text>all controlled foreign corporations were treated as one controlled foreign corporation, and</text> </clause><clause commented="no" id="H73BAB1122F7F46778094963B353492F1"><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 commented="no" id="HB8E7BED41E264D3CB4C4CE575E5EF24A"><enum>(B)</enum><text>the sum of—</text> <clause commented="no" id="H2F1D5DEAF54D4E4699B491C13B55EAEF"><enum>(i)</enum><text>all dividends received during the taxable year from controlled foreign corporations, plus</text>
</clause><clause commented="no" id="HBB05ACC732D04C28B0E6676D32394470"><enum>(ii)</enum><text>amounts includible in gross income under section 951(a).</text> </clause></subparagraph></paragraph><paragraph commented="no" id="HA25BB4BAA7A646F9BB75E2617692D234"><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 commented="no" id="H42E2086930DB4BDCA8DEC29B7BBD9772"><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 commented="no" id="H229D45AB2F4D4A6AA73A8A88BC330EB9"><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 commented="no" id="H2EFAFC24BFDF4E58AE1B65B0CA16FFBF"><enum>(7)</enum><header>Treatment of certain foreign taxes</header>
<subparagraph commented="no" id="H62C0949EA4D94B78AE750647DE99CB7A"><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 commented="no" id="H0A321009A0C04279877BA6C70865BB1F"><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 commented="no" id="H4379AB910FF643599EB280E901F86B78"><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 commented="no" id="H8D1E09E9A34549D2AD10DCC7C9C99CBD"><enum>976.</enum><header>Amount of foreign taxes computed on overall basis</header>
<subsection commented="no" id="H8E3D0D31C3454C7E9E21756F8768CB05"><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 commented="no" id="H983D7E244C0846ECB31ED0E988730C00"><enum>(1)</enum><text>the currently-taxed foreign income for such taxable year, bears to</text> </paragraph><paragraph commented="no" id="H079450B858D342E69C188F93360910C5"><enum>(2)</enum><text>the sum of the currently-taxed foreign income and deferred foreign income for such year.</text>
</paragraph><continuation-text commented="no" 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 commented="no" display-inline="no-display-inline" id="H357029442A434B0B98F6C28F12ABC2DA"><enum>(b)</enum><header>Allowance related to repatriated deferred foreign income</header>
<paragraph commented="no" id="H4FBEEB2A07034FAEBBAE5A39AD85BE94"><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 commented="no" id="H22379730AA22431B97B9DA2F7D17F15D"><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 commented="no" id="H35FEFD2D31EA4BF8BB71D521210D78AC"><enum>(A)</enum><text>the amount which bears the same proportion to such taxes, as</text> </subparagraph><subparagraph commented="no" id="HCDCDCD8BC2BC4A0A9D079E494A0FA67E"><enum>(B)</enum><text>the repatriated deferred income bears to the previously deferred foreign income.</text>
</subparagraph></paragraph></subsection><subsection commented="no" id="H6EBA551EFEBC42A98426357FABDCD9A0"><enum>(c)</enum><header>Definitions and special rule</header><text display-inline="yes-display-inline">For purposes of this section—</text> <paragraph commented="no" id="HFD6EB13E07BC49E1958F3AE0A73FF979"><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 commented="no" id="HABC3A57C61C740FC8D7D26135C49BF0A"><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 commented="no" id="H45B49A57D9AF499F988B1AC06B77F77E"><enum>(A)</enum><text>all controlled foreign corporations were treated as one controlled foreign corporation, and</text> </subparagraph><subparagraph commented="no" id="H56858163564141E19F7184A45CA1EFC4"><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 commented="no" id="H3D3DA7FC1BF246DB96D73440CE8F2682"><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 commented="no" id="HD87990D6C5904741AA13C7FEA8F8E33C"><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 commented="no" id="H56C4BF8A42EE4420AB3643F586AF0EF0"><enum>977.</enum><header>Application of subpart</header><text display-inline="no-display-inline">This subpart—</text>
<paragraph commented="no" id="H869F5ADC835D4ED682E6CE875985F6A3"><enum>(1)</enum><text>shall be applied before subpart A, and</text> </paragraph><paragraph commented="no" id="HBEFAC9CEC9104536984DCB8A90B9AAC1"><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 commented="no" id="HFCBF045F394649AAB606796C5F607E46"><enum>(b)</enum><header>Clerical amendment</header><text>The table of subparts for part III of subpart N of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/1">chapter 1</external-xref> is amended by inserting after the item relating to subpart G the following new item:</text>
<quoted-block display-inline="no-display-inline" id="HF9734E0CDC3349A6A8A6237FDCB736FC" style="OLC"><toc container-level="quoted-block-container" idref="HB33852748B69451A86ACF92227DC6494" lowest-bolded-level="division-lowest-bolded" lowest-level="section" quoted-block="no-quoted-block" regeneration="yes-regeneration"><toc-entry idref="H914BFE002A964FFCB9A71152A92BFE93" 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 commented="no" id="H092B409FF0694EE08FE66B085D6F55C5"><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="H013F0AAA317B47D9A2088BB748D3E86A" section-type="subsequent-section"><enum>102.</enum><header>Excess income from transfers of intangibles to low-taxed affiliates treated as subpart F income</header>
<subsection commented="no" id="H863E9722FDB44D1CB52A11B33D12A410"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline">Subsection (a) of <external-xref legal-doc="usc" parsable-cite="usc/26/954">section 954</external-xref> is amended by inserting after paragraph (3) the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="HFD40C49373F04B6EBFD58E4C88D022DB" style="OLC">
<paragraph commented="no" id="H75A8129E6C9A4740A05C3E52BF7615CB"><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 commented="no" id="H9AF61A9E16174C46803186294ABADF6B"><enum>(b)</enum><header>Foreign base company excess intangible income</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/954">Section 954</external-xref> is amended by inserting after subsection (e) the following new subsection:</text> <quoted-block display-inline="no-display-inline" id="H0ED67E698AAD4891BC04CFA0A2BF05E8" style="OLC"> <subsection commented="no" id="HE580BDB837FA4B7D854CF00DEE8E24C5"><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 commented="no" id="HB63A21E361DE44389EC6D97E7FA26E89"><enum>(1)</enum><header>Foreign base company excess intangible income defined</header>
<subparagraph commented="no" id="H2D4CC751B1E54403B4C3EB24AB39DC50"><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 commented="no" id="H8007145A22384DE784185C90EB55E09C"><enum>(i)</enum><text>the sum of—</text>
<subclause commented="no" id="HF22148FB0B04419A898AA8037B207C36"><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 commented="no" id="HC1167F1F606A4D65BA7C418D372B8400"><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 commented="no" id="H4D124B145EDD45BCBC2B0A71DACB7C3B"><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="H6992C0E61EF5419CBF7D7EFC1F053B48"><enum>(B)</enum><header>Same country income not taken into account</header><text>If—</text> <clause commented="no" id="H8A911F11216E4011B450226534F8D891"><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 commented="no" id="H8CE72F5DA3D942CB9BC38EE9389C0F2C"><enum>(ii)</enum><text>the services referred to in subparagraph (A)(i)(II) are performed in such country,</text> </clause><continuation-text commented="no" 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 commented="no" id="H8AEC4CCC748D4DA3840EBC5424227509"><enum>(2)</enum><header>Exception based on effective foreign income tax rate</header> <subparagraph commented="no" id="HB10BBAC002A545238029601711E2DF51"><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 commented="no" id="H7B016FCFB4A44E5EABD5135EF4EE6948"><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 commented="no" id="H35B531D13C4D41D19F091B2DE540E992"><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 commented="no" id="H8C1C444AD46949AEB9854C811E631CF6"><enum>(ii)</enum><text>10 percentage points.</text> </clause></subparagraph><subparagraph commented="no" id="H17366CAF948A42C29DEB364BD8A3ECBA"><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 commented="no" id="H5653BFA9DA3B48AB89A994CB7385864B"><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 commented="no" id="H498F44E392004AFD9EFBBD5644ACBBB1"><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 commented="no" id="HBC30F7B783F64FF59235DA7F3A6293A6"><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 commented="no" id="HD22B6BCCD089415BB32F6BDBA73B4750"><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 commented="no" id="HCB0235E146FA40229C1B3A73D0B1630A"><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 commented="no" id="H3ADF6AE17382400F995DB521763C82ED"><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 commented="no" id="H0D141126CA084CEF9DCFB8476634F9C9"><enum>(c)</enum><header>Separate basket for foreign tax credit</header><text display-inline="yes-display-inline">Subsection (d) of <external-xref legal-doc="usc" parsable-cite="usc/26/904">section 904</external-xref> 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="H3F2D80AB7FFA4D4DBCAC4B13F7AEFD7A" style="OLC">
<paragraph commented="no" id="H3AFC95F7A33B45B5AE6C1916DE26DA45"><enum>(7)</enum><header>Separate application to foreign base company excess intangible income</header>
<subparagraph commented="no" id="HCC4CDAA368B441F393A5735DA0256A60"><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 commented="no" id="HDE4EF202C6A7486A9F415C6F89D62226"><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 commented="no" id="H02620E4D3BAF4AE3AAEB0E28C2E29340"><enum>(d)</enum><header>Conforming amendments</header>
<paragraph commented="no" id="HF96BE55E3BE8454289298C3851803B36"><enum>(1)</enum><text>Paragraph (4) of <external-xref legal-doc="usc" parsable-cite="usc/26/954">section 954(b)</external-xref> 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 commented="no" id="H25E032BF59A941AFAE9BC67D4F59DD7A"><enum>(2)</enum><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/954">section 954</external-xref> is amended by adding at the end the following new paragraph:</text>
<quoted-block display-inline="no-display-inline" id="H287DC7880077423E8314D795F62770AB" style="OLC">
<paragraph commented="no" id="H3F8328218BCB42F1BC3B2E8EA3006049"><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 commented="no" id="H4812AB233C38485192D951D46433116E"><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="HB234F6A5BC9F4FE982DABC61D941D0ED"><enum>103.</enum><header>Limitations on income shifting through intangible property transfers</header>
<subsection id="H4E7A7E187CB440228D79B283265DCFE5"><enum>(a)</enum><header>Clarification of definition of intangible asset</header><text>Clause (vi) of <external-xref legal-doc="usc" parsable-cite="usc/26/936">section 936(h)(3)(B)</external-xref> 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="HD2D9C48CB205404AA3D16270DD6F713C"><enum>(b)</enum><header>Clarification of allowable valuation methods</header>
<paragraph id="HFF17D4340C694167A2158C11E85012D0"><enum>(1)</enum><header>Foreign corporations</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/367">section 367(d)</external-xref> is amended by adding at the end the following new subparagraph:</text> <quoted-block act-name="" id="HD377CD7AD7B649CDAE536017BB3C03AB" style="OLC"> <subparagraph id="HAFBBD9E8D37246448992ABCC300A8CA4"><enum>(D)</enum><header>Regulatory authority</header><text>For purposes of the last sentence of subparagraph (A), the Secretary may require—</text>
<clause id="H5A90A6A5DE164E5B8F7B314AF3882913"><enum>(i)</enum><text>the valuation of transfers of intangible property on an aggregate basis, or</text> </clause><clause id="HCAFA58C9A95E4DC7B802B7577F83DE88"><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="H3DD37614D1C1494D862E51FAA03CD039"><enum>(2)</enum><header>Allocation among taxpayers</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/482">Section 482</external-xref> 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="H6289231375A743CEA663C7E3382991F6"><enum>(c)</enum><header>Effective date</header>
<paragraph id="H7C6597B9CB2C4E2C8E3DB513A1E518C0"><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="HC1349ED540004279A87F39308239A976"><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 <external-xref legal-doc="usc" parsable-cite="usc/26/936">section 936(h)(3)</external-xref> 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="HC4360D778C4C46AABB56DD795873C13D"><enum>104.</enum><header>Repeal of check-the-box rules for certain foreign entities and CFC look-thru rules</header>
<subsection id="H6776665E309940829D5FD579013229C6"><enum>(a)</enum><header>Check-the-Box rules</header><text>Paragraph (3) of <external-xref legal-doc="usc" parsable-cite="usc/26/7701">section 7701(a)</external-xref> is amended—</text> <paragraph id="H140A91324201420C91BCCCCE95C4640F"><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="HBF377F5F46574C16B03D6C468E901DA6"><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="HFEC65D36EED640F5B219974D1DE1AB74" style="OLC"> <text>, and any foreign business entity that—</text><subparagraph commented="no" display-inline="no-display-inline" id="H8F887F232D6741CFB33C481C45A2EA0F"><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="H3FE009E0A6564350BF1352EB276350D4"><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="HF6062CA5562844B8B656C2D9DB1DF53F"><enum>(b)</enum><header>Look-Thru rule</header><text>Subparagraph (C) of <external-xref legal-doc="usc" parsable-cite="usc/26/954">section 954(c)(6)</external-xref> is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="HFBF601E523E1484596E9A461389339E9" style="OLC"> <subparagraph commented="no" display-inline="no-display-inline" id="H198E70BD948F49C19D37EE749FB9ABA2"><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><subsection id="H0FA4C2A0431A4AA5B63BFF21E7342DDF"><enum>(c)</enum><header>Effective date</header>
<paragraph id="H2801BD6BDF404F598AD9C82339E4A078"><enum>(1)</enum><text>The amendments made by subsection (a) shall take effect on the date of the enactment of this Act.</text> </paragraph><paragraph id="H2FE630BBB7B845F4B3171EA951DD51C6"><enum>(2)</enum><text>The amendment made by subsection (b) shall apply to payments received after the date of the enactment of this Act.</text>
</paragraph></subsection></section><section display-inline="no-display-inline" id="H2043A2255B5344BCADC89765BD76CDDA" section-type="subsequent-section"><enum>105.</enum><header>Restrictions on deduction for interest expense of members of financial reporting groups with excess
domestic indebtedness</header>
<subsection id="H3CA4E2EDEE4747E08E3A0B794B25DED5"><enum>(a)</enum><header>In general</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/163">Section 163</external-xref> is amended by redesignating subsection (n) as subsection (o) and by inserting after subsection (m) the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H1758444DC000404DB576F1713638DF71" style="OLC">
<subsection id="H0959726CD28C4FA6BFA297607D2F103F"><enum>(n)</enum><header>Restriction on deduction for interest expense of members of financial reporting groups with excess
domestic indebtedness</header>
<paragraph id="HD9EF09394AB44E35B13C93E69572AC3D"><enum>(1)</enum><header>In general</header><text display-inline="yes-display-inline">In the case of any corporation which is a member of an applicable financial reporting group the common parent of which is a foreign corporation, the deduction allowed under this chapter for interest paid or accrued by the corporation during the taxable year shall not exceed the applicable limitation for the taxable year.</text>
</paragraph><paragraph commented="no" display-inline="no-display-inline" id="H306686BD3C8948AFA46358878F3CF727"><enum>(2)</enum><header display-inline="yes-display-inline">Carryforward</header><text display-inline="yes-display-inline">Any amount disallowed under paragraph (1) for any taxable year shall be treated as interest paid or accrued in the succeeding taxable year.</text>
</paragraph><paragraph id="H6F6C4A3B92F849B2BB517BA6E79EB1C4"><enum>(3)</enum><header>Applicable limitation</header><text display-inline="yes-display-inline">For purposes of this subsection—</text> <subparagraph id="H266B9BCB55BF4AD08C4D4DF4B16916C9"><enum>(A)</enum><header>In general</header><text display-inline="yes-display-inline">The applicable limitation with respect to a taxpayer for any taxable year is the sum of—</text>
<clause id="H70E1A313AE3245479FEC5ADB1DEBD107"><enum>(i)</enum><text display-inline="yes-display-inline">the greater of—</text> <subclause id="H19697250FE1E450E8F13B9089CEC62CD"><enum>(I)</enum><text display-inline="yes-display-inline">the taxpayer’s allocable share of the applicable financial reporting group’s net interest expense for the taxable year, or</text>
</subclause><subclause id="H841512420BB2426F82E039C201064C5A"><enum>(II)</enum><text>10 percent of the taxpayer’s adjusted taxable income for the taxable year, plus</text> </subclause></clause><clause id="H1298BAE46A6541DA9DAB9E47609E6651"><enum>(ii)</enum><text>the excess limitation carryforwards to the taxable year from any preceding taxable year.</text>
</clause></subparagraph><subparagraph id="HC609E9F340BF4F31AFD7AF4A6907A783"><enum>(B)</enum><header>Limitation not less than includible interest</header><text>The applicable limitation under subparagraph (A) for any taxable year shall not be less than the amount of interest includible in the gross income of the taxpayer for the taxable year.</text>
</subparagraph><subparagraph id="H2882BDD5FB2546708B18C6A9914A2F5A"><enum>(C)</enum><header>Excess limitation carryforward</header><text>If the applicable limitation of a taxpayer for any taxable year (determined without regard to carryforwards under subparagraph (A)(ii)) exceeds the interest paid or accrued by the taxpayer during the taxable year, such excess shall be an excess limitation carryforward to the 1st succeeding taxable year and the 2nd and 3rd succeeding taxable years to the extent not previously taken into account under this paragraph.</text>
</subparagraph></paragraph><paragraph id="H55681A0DC48640A788DAEA7428E7C4C5"><enum>(4)</enum><header>Allocable share of net interest expense</header><text>For purposes of this subsection—</text> <subparagraph id="H55EBFDCBCE6B4C48922CE018B44A1B10"><enum>(A)</enum><header>In general</header><text>A taxpayer’s allocable share of an applicable financial reporting group’s net interest expense for any taxable year shall be the amount (not less than zero) which bears the same ratio to such net interest expense as—</text>
<clause id="HAA0BC0F6D72B4DC384162D2393F7ED29"><enum>(i)</enum><text>the net earnings of the taxpayer, bears to</text> </clause><clause id="HA09C30E10B7F45C8B3F1EDDAAF895AC1"><enum>(ii)</enum><text>the aggregate net earnings of all members of the applicable financial reporting group.</text>
</clause></subparagraph><subparagraph id="H260901A149F8458E8996440E83F985FE"><enum>(B)</enum><header>Net earnings</header><text>The term <term>net earnings</term> means, with respect to any taxpayer, the earnings of the taxpayer—</text> <clause id="H3122C3F8F43B4F81BF4C6277F4F1C048"><enum>(i)</enum><text>computed without regard to any reduction allowable for—</text>
<subclause id="H4211764B7FDC48BEB25D6E4B179BCDB9"><enum>(I)</enum><text>net interest expense,</text> </subclause><subclause id="HBDBA564BD6D94D57B52A3184D9CF533E"><enum>(II)</enum><text>taxes, or</text>
</subclause><subclause id="H648404BFE3204854AA69729850F9ACA3"><enum>(III)</enum><text>depreciation, amortization, or depletion, and</text> </subclause></clause><clause id="H3B7E7EB8035B42ACA3D9B4FF920CDCD2"><enum>(ii)</enum><text>computed with such other adjustments as the Secretary may by regulations prescribe.</text>
</clause></subparagraph><subparagraph id="HB5CDC762F41943BB95EA338AB7A4EF79"><enum>(C)</enum><header>Burden on taxpayer</header><text>If a taxpayer elects not to compute its allocable share, or fails to establish to the satisfaction of the Secretary the amount of its allocable share, for any taxable year, the allocable share shall be zero.</text>
</subparagraph></paragraph><paragraph id="H9FD8612BBBCA4FA8A765F44456623865"><enum>(5)</enum><header>Net interest expense and net earnings determinations</header><text>For purposes of this subsection—</text> <subparagraph id="H4DE79D8B1EAF4CC588244BE45DC40C31"><enum>(A)</enum><header>Net interest expense</header><text>Any determination of net interest expense for any taxable year shall be made—</text>
<clause id="HFA7413CF33834A2F97BF90CC22E72904"><enum>(i)</enum><text>on the basis of the applicable financial statement of the applicable financial reporting group for the last financial reporting year ending with or within the taxable year, and</text>
</clause><clause id="H92F282B24F0D427FB6351F41A476E510"><enum>(ii)</enum><text>under United States tax principles.</text> </clause></subparagraph><subparagraph id="H6017343CC7F6424D870F654C63276C44"><enum>(B)</enum><header>Net earnings</header><text>Any determination of net earnings for any taxable year shall be made on the basis of the applicable financial statement of the applicable financial reporting group for the last financial reporting year ending with or within the taxable year.</text>
</subparagraph><subparagraph id="HDD35B390BACE49A3990B15B70FF1CF9C"><enum>(C)</enum><header>Applicable financial statement</header><text>The term <term>applicable financial statement</term> means a statement for financial reporting purposes which is made on the basis of—</text> <clause id="HCCDD39FA88CA4FEE9866693741E1C48F"><enum>(i)</enum><text>generally accepted accounting principles,</text>
</clause><clause id="H9DFE2202868943339C6279A4C6AF3055"><enum>(ii)</enum><text>international financial reporting standards, or</text> </clause><clause id="HE0B9CCD2A9FE4381A9C990538D80CD6D"><enum>(iii)</enum><text>any other method specified by the Secretary in regulations.</text>
</clause><continuation-text continuation-text-level="subparagraph">A statement under clause (ii) or (iii) may be used as an applicable financial statement by a group
only if there is no statement of the group under any preceding clause.</continuation-text></subparagraph></paragraph><paragraph id="HB4FD20480AEF4F4A99B2E1745A1DAFBA"><enum>(6)</enum><header>Applicable financial reporting group</header><text>For purposes of this subsection—</text> <subparagraph id="HB8F837E3332D48B78E8079DE36B40727"><enum>(A)</enum><header>In general</header><text>The term <term>applicable financial reporting group</term> means, with respect to any corporation, a group of which such corporation is a member and which files an applicable financial statement.</text>
</subparagraph><subparagraph id="HB32534F8C16940918748D28D05802F28"><enum>(B)</enum><header>Exception for groups with minimal domestic net interest expense</header><text>Such term shall not include a group if the aggregate net interest expense for which a deduction is allowable to all members of the group under this chapter (determined without regard to this subsection or any other limitation on deductibility of interest under this chapter) is less than $5,000,000.</text>
</subparagraph><subparagraph id="H79968C20DF43452C9F7E02C1DDA5934A"><enum>(C)</enum><header>Exception for certain financial entities</header><text>A corporation which is described in section 864(f)(4)(B), or is treated as described in section 864(f)(4)(B) by reason of paragraph (4)(C) or (5)(A) of section 864(f) (without regard to whether an election is made under such paragraph (5)(A)), shall not be treated as a member of an applicable financial reporting group of which it is otherwise a member and this subsection shall not apply to such corporation.</text>
</subparagraph></paragraph><paragraph id="H1F64B8E6E8CB45CCBD7B4E8EE2FF4B8D"><enum>(7)</enum><header>Other definitions and rules</header><text>For purposes of this subsection—</text> <subparagraph id="HDD1AF933A28F44DCAE697D0F9459A6C2"><enum>(A)</enum><header>Adjusted taxable income</header><text>The term <term>adjusted taxable income</term> has the meaning given such term by subsection (j)(6)(A).</text>
</subparagraph><subparagraph id="H9ED0FF1497924D76A1C0D0F0D5C8C9CB"><enum>(B)</enum><header>Net interest expense</header><text>The term <term>net interest expense</term> has the meaning given such term by subsection (j)(6)(B).</text> </subparagraph><subparagraph id="H674400DAFB0944C7A754ABFFCEE9FA1D"><enum>(C)</enum><header>Treatment of affiliated group</header><text>All members of the same affiliated group (within the meaning of section 1504(a)) shall be treated as 1 taxpayer.</text>
</subparagraph></paragraph><paragraph id="HBA9E00D61967416795AB8E9D374FFF1A"><enum>(8)</enum><header>Regulations</header><text>The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section, including regulations providing—</text>
<subparagraph id="HA42857FC48794759B684110741256C94"><enum>(A)</enum><text>for the coordination of the application of this subsection and other provisions of this chapter relating to the deductibility of interest,</text>
</subparagraph><subparagraph id="H49943A45300A4AB9BDD73B99890DA314"><enum>(B)</enum><text>for the waiver of certain adjustments required under United States tax principles in appropriate cases for purposes of applying this subsection,</text>
</subparagraph><subparagraph id="H6AFF8B81F5C34B29B31E2CDE7EFCFEF5"><enum>(C)</enum><text>for the determination of which financial institutions are eligible for the exception from membership in an applicable financial reporting group under paragraph (6)(C) and the application of this subsection to the other members of the group which are not so excepted, and</text>
</subparagraph><subparagraph id="H24FA8FB61CAB4883BDA7110E28CFF803"><enum>(D)</enum><text>for the application of this subsection in the case of pass thru entities and for the treatment of pass thru entities as corporations in cases where necessary to prevent the avoidance of the purposes of this subsection.</text></subparagraph></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="HF5DA854D2BB3495A81FC1F3D9AA65FFC"><enum>(b)</enum><header>Coordination with limitation on related party indebtedness</header><text>Paragraph (2) of <external-xref legal-doc="usc" parsable-cite="usc/26/163">section 163(j)</external-xref> of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:</text>
<quoted-block display-inline="no-display-inline" id="H644BD20031714023B220479B15A5693E" style="OLC">
<subparagraph id="HAD3C58CBFE434EC2AFF07AB64CEC3C65"><enum>(D)</enum><header>Coordination with limitation on excess domestic indebtedness</header><text display-inline="yes-display-inline">This subsection shall not apply to any corporation for any taxable year to which subsection (n) applies to such corporation.</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection commented="no" display-inline="no-display-inline" id="H667A149890EF4446B95E16A4B7C30E44"><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 December 31, 2016.</text> </subsection></section><section id="HF24201D7C1EE431A9ACFC95FC05314F5"><enum>106.</enum><header>Treatment of foreign corporations managed and controlled in the United States as domestic corporations</header> <subsection id="HD032CF471C3B42438BB9CBC1245BAF8F"><enum>(a)</enum><header>In general</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/7701">Section 7701</external-xref> 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="HB48D7266D8EF4F8390FD67F6C9DC5785" style="OLC">
<subsection id="H5FDC8DC705094D61ACBE22DFE86BA56B"><enum>(p)</enum><header>Certain corporations managed and controlled in the United States treated as domestic for income tax</header>
<paragraph id="HD847E256393A48F580CD2473BE6D5483"><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="HE470F28FBFBD45869778A17A9B631709"><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="H8377E0F5EB0C4CB1868F0F2156654B13"><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="H7B821D1467604E71AFC6BA027663B5B1"><enum>(2)</enum><header>Corporation described</header>
<subparagraph id="H79E397A26995415A80E356FD30C8A753"><enum>(A)</enum><header>In general</header><text>A corporation is described in this paragraph if—</text> <clause id="H0EB5110A9462436EA80A80E8FB435BD6"><enum>(i)</enum><text>the stock of such corporation is regularly traded on an established securities market, or</text>
</clause><clause id="H9054DF7A2DAE41C08311E7FD39A4E4E7"><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="HDE65FD7DD5FD4E88BF986DEB265C5E93"><enum>(B)</enum><header>General exception</header><text>A corporation shall not be treated as described in this paragraph if—</text> <clause id="HCEB17F2107EF41B18329F0C4769768E9"><enum>(i)</enum><text>such corporation was treated as a corporation described in this paragraph in a preceding taxable year,</text>
</clause><clause id="HF4DA80835E404FFDAF7301ED9DF3B5D5"><enum>(ii)</enum><text>such corporation—</text> <subclause id="HE175F1ABB3FB4079BC140C2D2C24C4CF"><enum>(I)</enum><text>is not regularly traded on an established securities market, and</text>
</subclause><subclause id="H6F0DFDD5D89E4293BA924145BD5D1C6F"><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="H49DE26CEFAE44600B0B8F3DA5B437E71"><enum>(iii)</enum><text>the Secretary grants a waiver to such corporation under this subparagraph.</text> </clause></subparagraph></paragraph><paragraph id="H9CC98177178F44FDB8CFE301982EE3D9"><enum>(3)</enum><header>Management and control</header> <subparagraph id="H04B250E6F140483397B0EEC72056CAB3"><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="H4D6E237C0E564DA0B165747964E46238"><enum>(B)</enum><header>Executive officers and senior management</header><text>Such regulations shall provide that—</text> <clause id="H7A247D3D47334AC38ECA815E7EAFBEC1"><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="H9A6517F166634B2DAD99ABEAA71A12F4"><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="H29DABF5D596E4D3581C86C3082C2FC13"><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="H2FE3377688F84A01AE9C8F7A531C81BF"><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="H72DF59093ADD472FBBE5787061158F0E"><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="HF44DD3C7D1D844718A4282BC01113379"><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 <external-xref legal-doc="usc" parsable-cite="usc/26/7701">section 7701(p)(3)</external-xref> of the Internal Revenue Code of 1986, as added by this section.</text>
</subsection></section><section id="H3AB2940CD36B4E0B95E36CB6E4B55A0F"><enum>107.</enum><header>Swap payments made from the United States to persons offshore</header>
<subsection id="HD6453655A0CC49E7BB189DBFA2DDDB9E"><enum>(a)</enum><header>Tax on swap payments received by foreign persons</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/871">Section 871(a)(1)</external-xref> is amended—</text> <paragraph id="HF6A4AA1AD7704A758E49FF5998B19905"><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="HB5DF1EDAB5A544FD9918C2E0578616B5"><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="HABC199D99E2D4DD385C4BE40DF76AA96"><enum>(b)</enum><header>Tax on swap payments received by foreign corporations</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/881">Section 881(a)</external-xref> is amended—</text> <paragraph id="H4572F089A6C44C20A80208EB3648EFBE"><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="H1459A12FE85244FFABCE0DA5F427AAF1"><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><section id="H9EE8DEFE32954B26AFE853AFB9DE0893"><enum>108.</enum><header>Modifications to rules relating to inverted corporations</header>
<subsection id="HA635CC7DB1184AEA8CEB6BF1E7AC622A"><enum>(a)</enum><header>In general</header><text>Subsection (b) of <external-xref legal-doc="usc" parsable-cite="usc/26/7874">section 7874</external-xref> of the Internal Revenue Code of 1986 is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="H6557AE5A39EB4B55AFFA31DF554E8A6C" style="OLC"> <subsection id="HD82AAD694A224222B1CF322A4105C083"><enum>(b)</enum><header>Inverted corporations treated as domestic corporations</header> <paragraph id="HA1DC089FE662491A8B135E8614D1D6CF"><enum>(1)</enum><header>In general</header><text>Notwithstanding section 7701(a)(4), a foreign corporation shall be treated for purposes of this title as a domestic corporation if—</text>
<subparagraph id="HFF510A84194846318E6CEE4EEC501FF4"><enum>(A)</enum><text>such corporation would be a surrogate foreign corporation if subsection (a)(2) were applied by substituting <quote>80 percent</quote> for <quote>60 percent</quote>, or</text>
</subparagraph><subparagraph id="HFE76055ABD6D402A8B9FC821DA452E1A"><enum>(B)</enum><text>such corporation is an inverted domestic corporation.</text> </subparagraph></paragraph><paragraph id="H7540F4248FC44610961A4403711466AA"><enum>(2)</enum><header>Inverted domestic corporation</header><text>For purposes of this subsection, a foreign corporation shall be treated as an inverted domestic corporation if, pursuant to a plan (or a series of related transactions)—</text>
<subparagraph id="H9FF60C9EAD874A5A8FCC57866BC2F82B"><enum>(A)</enum><text>the entity completes after May 8, 2014, the direct or indirect acquisition of—</text> <clause id="HED20855ABE374BDF848C67EB0D043715"><enum>(i)</enum><text>substantially all of the properties held directly or indirectly by a domestic corporation, or</text>
</clause><clause id="HC213F536AB1E4E7C848ABAF4A32B7C8F"><enum>(ii)</enum><text>substantially all of the assets of, or substantially all of the properties constituting a trade or business of, a domestic partnership, and</text>
</clause></subparagraph><subparagraph id="H6C9D7B136037467FA30D5D1FB1F0CF27"><enum>(B)</enum><text>after the acquisition, either—</text> <clause id="H1C3813BD315E40DA991CE93F4B028C82"><enum>(i)</enum><text>more than 50 percent of the stock (by vote or value) of the entity is held—</text>
<subclause id="H4D3A03F201904B70AE58169C87A63E91"><enum>(I)</enum><text>in the case of an acquisition with respect to a domestic corporation, by former shareholders of the domestic corporation by reason of holding stock in the domestic corporation, or</text>
</subclause><subclause id="HCEA2E89285BB4824879F4CD0E6FB9A74"><enum>(II)</enum><text>in the case of an acquisition with respect to a domestic partnership, by former partners of the domestic partnership by reason of holding a capital or profits interest in the domestic partnership, or</text>
</subclause></clause><clause id="H8A110A4ECF0742BE9FE3742EDE5BB841"><enum>(ii)</enum><text>the management and control of the expanded affiliated group which includes the entity occurs, directly or indirectly, primarily within the United States, and such expanded affiliated group has significant domestic business activities.</text>
</clause></subparagraph></paragraph><paragraph id="H1E500B5083AE4C5FB346DAC4047D1886"><enum>(3)</enum><header>Exception for corporations with substantial business activities in foreign country of organization</header><text>A foreign corporation described in paragraph (2) shall not be treated as an inverted domestic corporation if after the acquisition the expanded affiliated group which includes the entity has substantial business activities in the foreign country in which or under the law of which the entity is created or organized when compared to the total business activities of such expanded affiliated group. For purposes of subsection (a)(2)(B)(iii) and the preceding sentence, the term <term>substantial business activities</term> shall have the meaning given such term under regulations in effect on May 8, 2014, except that the Secretary may issue regulations increasing the threshold percent in any of the tests under such regulations for determining if business activities constitute substantial business activities for purposes of this paragraph.</text>
</paragraph><paragraph id="H47B41C3BC5F34E5984F39B2763709FB7"><enum>(4)</enum><header>Management and control</header><text display-inline="yes-display-inline">For purposes of paragraph (2)(B)(ii)—</text> <subparagraph id="HD5A027AAAF264F7E85582B4A8A711D2D"><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 an expanded affiliated group is to be treated as occurring, directly or indirectly, primarily within the United States. The regulations prescribed under the preceding sentence shall apply to periods after May 8, 2014.</text>
</subparagraph><subparagraph id="HFFABBB598D814656A0673C1F8434C6B5"><enum>(B)</enum><header>Executive officers and senior management</header><text display-inline="yes-display-inline">Such regulations shall provide that the management and control of an expanded affiliated group shall be treated as occurring, directly or indirectly, primarily within the United States if substantially all of the executive officers and senior management of the expanded affiliated group who exercise day-to-day responsibility for making decisions involving strategic, financial, and operational policies of the expanded affiliated group are based or primarily located within the United States. Individuals who in fact exercise such day-to-day responsibilities shall be treated as executive officers and senior management regardless of their title.</text>
</subparagraph></paragraph><paragraph id="H4B46D7F9BF334927A66C45B87314593E"><enum>(5)</enum><header>Significant domestic business activities</header><text display-inline="yes-display-inline">For purposes of paragraph (2)(B)(ii), an expanded affiliated group has significant domestic business activities if at least 25 percent of—</text>
<subparagraph id="H587FEF4B8DE94022AE42E96614C4EA44"><enum>(A)</enum><text display-inline="yes-display-inline">the employees of the group are based in the United States,</text> </subparagraph><subparagraph id="HEC0477BFBAA14F0BA1B63F488006D604"><enum>(B)</enum><text display-inline="yes-display-inline">the employee compensation incurred by the group is incurred with respect to employees based in the United States,</text>
</subparagraph><subparagraph id="HF92206EEDD514F72AF84E4EBBB5A8AE2"><enum>(C)</enum><text display-inline="yes-display-inline">the assets of the group are located in the United States, or</text> </subparagraph><subparagraph id="H79876B1E3C07468D8B40386F36C8F3F2"><enum>(D)</enum><text display-inline="yes-display-inline">the income of the group is derived in the United States,</text>
</subparagraph><continuation-text continuation-text-level="paragraph">determined in the same manner as such determinations are made for purposes of determining
substantial business activities under regulations referred to in paragraph
(3) as in effect on May 8, 2014, but applied by treating all references in
such regulations to <quote>foreign country</quote> and <quote>relevant foreign country</quote> as references to <quote>the United States</quote>. The Secretary may issue regulations decreasing the threshold percent in any of the tests under
such regulations for determining if business activities constitute
significant domestic business activities for purposes of this paragraph.</continuation-text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H29BEB2B1D5514739A62155D8F3D4B60A"><enum>(b)</enum><header>Conforming amendments</header>
<paragraph id="HF354C85B97804C54967E13B8C6CF5ADD"><enum>(1)</enum><text>Clause (i) of section 7874(a)(2)(B) of such Code is amended by striking <quote>after March 4, 2003,</quote> and inserting <quote>after March 4, 2003, and before May 9, 2014,</quote>.</text> </paragraph><paragraph id="HD1DED1C41AC34057A5CE626BEE34F9B7"><enum>(2)</enum><text>Subsection (c) of section 7874 of such Code is amended—</text>
<subparagraph id="H17836FDC6650485EAC64FE87EA8C583D"><enum>(A)</enum><text>in paragraph (2)—</text> <clause id="H054ABA8535D04696A35672A6999EE92F"><enum>(i)</enum><text>by striking <quote>subsection (a)(2)(B)(ii)</quote> and inserting <quote>subsections (a)(2)(B)(ii) and (b)(2)(B)(i)</quote>, and</text>
</clause><clause id="HCB4A4AC6172047F79677E135A99C1732"><enum>(ii)</enum><text>by inserting <quote>or (b)(2)(A)</quote> after <quote>(a)(2)(B)(i)</quote> in subparagraph (B),</text> </clause></subparagraph><subparagraph id="HB1470E1FE8C641DBB3C56F3CDCF651AD"><enum>(B)</enum><text>in paragraph (3), by inserting <quote>or (b)(2)(B)(i), as the case may be,</quote> after <quote>(a)(2)(B)(ii)</quote>,</text>
</subparagraph><subparagraph id="H1C950EF19CD44FA1AD78DEC1CD1DFCF0"><enum>(C)</enum><text>in paragraph (5), by striking <quote>subsection (a)(2)(B)(ii)</quote> and inserting <quote>subsections (a)(2)(B)(ii) and (b)(2)(B)(i)</quote>, and</text> </subparagraph><subparagraph id="HEE3D8DAFB1CF4404967643135889123D"><enum>(D)</enum><text>in paragraph (6), by inserting <quote>or inverted domestic corporation, as the case may be,</quote> after <quote>surrogate foreign corporation</quote>.</text>
</subparagraph></paragraph></subsection><subsection id="H15519383F7134FA7B78B680319260515"><enum>(c)</enum><header>Effective date</header><text>The amendments made by this section shall apply to taxable years ending after May 8, 2014.</text> </subsection></section><section id="HE913B3289D284169932615DC7567240F"><enum>109.</enum><header>Country-by-country reporting</header> <subsection id="HA8D34962B4104DE6B9DECE4F68C8ADF5"><enum>(a)</enum><header>Country-by-Country Reporting</header><text>Section 13 of the Securities Exchange Act of 1934 (<external-xref legal-doc="usc" parsable-cite="usc/15/78m">15 U.S.C. 78m</external-xref>) is amended by adding at the end the following new subsection:</text>
<quoted-block display-inline="no-display-inline" id="H6CF6A46D011D4BB7ADE0D87A11540558" style="OLC">
<subsection id="H0AB7C50442414D0F86D39B37D084E476"><enum>(s)</enum><header>Disclosure of financial performance on a Country-by-Country basis</header>
<paragraph id="H0E47FEC4513A486B80EC99CD0A4B0448"><enum>(1)</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 for each tax jurisdiction, aggregated from all subsidiaries residing in that jurisdiction, consisting of—</text>
<subparagraph id="HFA3C13982E6C4E2680A321A652FFD0F9"><enum>(A)</enum><text display-inline="yes-display-inline">revenues from unrelated parties, related parties, and in total,</text> </subparagraph><subparagraph id="H0F5D063912284946BF72632B2175FDEA"><enum>(B)</enum><text>profit or loss before taxes,</text>
</subparagraph><subparagraph id="HD5B743856AC24B6481E4C02FF36C5325"><enum>(C)</enum><text>income tax accrued for the current year,</text> </subparagraph><subparagraph id="H5CF4F6A9D0254E64ABEB6D3DE4DAD1F0"><enum>(D)</enum><text>income tax paid (on a cash basis),</text>
</subparagraph><subparagraph id="HEE884FB630CD4DC1A315BE1EC4859A56"><enum>(E)</enum><text>stated capital,</text> </subparagraph><subparagraph id="H8B567A93522A46DC890BDDE8A1141C65"><enum>(F)</enum><text>accumulated earnings,</text>
</subparagraph><subparagraph id="H600E21BF40184E828ED45146C36E3D94"><enum>(G)</enum><text>number of employees,</text> </subparagraph><subparagraph id="HF143AF95C7824EABB67F85AC46A0C02C"><enum>(H)</enum><text>tangible assets other than cash or cash equivalents, and</text>
</subparagraph><subparagraph id="H04D821D93F6F4F30BDDBFD8AA8B4914B"><enum>(I)</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><paragraph id="HC245E058972D4399980ADACDDB56738E"><enum>(2)</enum><header>Rules relating to foreign subsidiary</header><text display-inline="yes-display-inline">For each foreign subsidiary, the report required by paragraph (1) shall be grouped by resident jurisdiction (including a group for subsidiaries resident nowhere), the tax jurisdiction (if different), and main business activity.</text></paragraph></subsection><after-quoted-block>.</after-quoted-block></quoted-block>
</subsection><subsection id="H45B9E987B47A4169BF83DEF2DF2625F8"><enum>(b)</enum><header>Rulemaking</header>
<paragraph id="HE461BB2CEB6C48F6A99547A929304D9F"><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="H9D54B39035B6442D97D8ABEB6A083098"><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="HE593EBAD2D074BF7A19A4B0EC9648C31"><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="HE28821A5487F4272B6E7712B383FE956"><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="HB7A24E0CB95D48679AD898C0887A38CE"><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><enum>II</enum><header>Additional measures to combat tax evasion</header>
<section id="HB9D8917319054C9B98CF0C8D9D336458"><enum>201.</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">Section 5318A of title 31, United States Code, is amended—</text> <paragraph id="HA8F9F51E0F69487EB8E6C3723F166F47"><enum>(1)</enum><text>by striking the section heading and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H91280BB5B8C144FBA6A1720E0EDD3D1E" style="USC">
<section id="HC0AEE0628BFC4E4C8919F6775AF869A2"><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="H78B115C33AFF4C15932DAA05439C020B"><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="H8329083925D1427B884CB4FFD1B9BF35" style="USC"> <subsection id="H23173A784BFD4B5CAC2C2F626A03B066"><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="H8AE6906B4FD1478DB959D23ECF16CE99"><enum>(3)</enum><text>in subsection (c)—</text>
<subparagraph id="HA4FA9DAB8DE44B4789B74A01B484FD8B"><enum>(A)</enum><text>by striking the subsection heading and inserting the following:</text> <quoted-block display-inline="no-display-inline" id="HBDE9333D4F794E03A6930358CA95793C" style="USC"> <subsection id="HC26ED3F5A1864B7180457B12536027E7"><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="HE776CD8D50EB44AEAD0A32D33656559E"><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="HA81FEF2AC4DD4D8686E7D09D1E7760E0" style="OLC">
<subparagraph id="HF158C28015E743D485D65B42CF6F6872"><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="H036A097F9FC04AC888D864794FF496C6"><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="H1CC8058E516C4C798AC09B5A13D7A158"><enum>(5)</enum><text>in subsection (a)(4)—</text>
<subparagraph id="HBD5DDF26A0A749D1903801768CE5D2FD"><enum>(A)</enum><text>in subparagraph (A)—</text> <clause id="H58384EAF65024B73BC1647DCF2DF91E5"><enum>(i)</enum><text>by inserting <quote>in matters involving money laundering,</quote> before <quote>shall consult</quote>; and</text>
</clause><clause id="HD76F4BF4C4124B82AF248D171435545C"><enum>(ii)</enum><text>by striking <quote>and</quote> at the end;</text> </clause></subparagraph><subparagraph id="H7C093D15C124437DBBC6E04DF7712BD5"><enum>(B)</enum><text>by redesignating subparagraph (B) as subparagraph (C); and</text>
</subparagraph><subparagraph id="H25AB4C167EDB4FD087AC4DD50338FA4C"><enum>(C)</enum><text>by inserting after subparagraph (A) the following:</text> <quoted-block display-inline="no-display-inline" id="H955663EFB0384B55AFD2BCDE95D454D8" style="OLC"> <subparagraph id="HEB3DE8D858A1443686ED75E7AABD6D24"><enum>(B)</enum><text>in matters involving United States tax enforcement, shall consult with the Commissioner of 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="H9A3DECAE2AC84816A667D8568C7ACA24"><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="H5613C058069943FA931D2963EF7EA6C7"><enum>(7)</enum><text>in subsection (b), by striking paragraph (5) and inserting the following:</text>
<quoted-block display-inline="no-display-inline" id="H1B9DF6B8930440F681C8630448D07604" style="OLC">
<paragraph id="HB49AD64BC5344230BAC274C5BE745692"><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="HC945502BCDD441F382B6AA2A6AF26703"><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="HA6173C9AA96A4290B55B7BF2E8DBF6E6"><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>;</after-quoted-block></quoted-block>
</paragraph><paragraph id="H8ED64008E78F4CC4AF9A73532033A02E"><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="HCDA55D71D67A482F9D2AB68A08729499"><enum>(9)</enum><text>in subsection (c)(2)(A)—</text>
<subparagraph id="H61EF5A35E3E94EB19B4B2441AD8566AD"><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="HF41E660555B14702AE1804DD968D3AD8"><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="HDF1EE70DFB9441A8905FCD5B6AD7657B"><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="HF5B8B809F0494881B3D9AFF44A87C9C0"><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="H18772E49B6444F6FA03EDB9F5F4EAD62"><enum>(10)</enum><text>in subsection (c)(2)(B)—</text> <subparagraph id="H5A22780A34AD4F458F532AE5AC340BEC"><enum>(A)</enum><text>in clause (i), by inserting <quote>or tax evasion</quote> after <quote>money laundering</quote>; and</text>
</subparagraph><subparagraph id="HD23F6C15B93B47D7B6B0C6CF399C680A"><enum>(B)</enum><text>in clause (iii), by inserting <quote>, tax evasion,</quote> after <quote>money laundering</quote>; and</text> </subparagraph></paragraph><paragraph id="H4017F171FAB444C2AC891CFDE50B1C2F"><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="H497D2800598448F8ADE5BC81B302C0AF"><enum>202.</enum><header>Strengthening the Foreign Account Tax Compliance Act (FATCA)</header>
<subsection commented="no" display-inline="no-display-inline" id="H1AA3FF5D98E34CDFBAB136B0C9443C66"><enum>(a)</enum><header>Reporting activities with respect to passive foreign investment companies</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/1298">Section 1298(f)</external-xref> 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="H9D2556BC73844563BEC0DF252F1C6BAD"><enum>(b)</enum><header>Withholdable payments to foreign financial institutions</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/1471">Section 1471(d)</external-xref> is amended—</text> <paragraph commented="no" display-inline="no-display-inline" id="H5274905203D149769A4CCEA228A2F9EA"><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="H7BB5F0FB2CAB43FA8DA87053E4BDA9E3"><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="H388B07A1445E42A8B47ECB3F97A43F91"><enum>(c)</enum><header>Withholdable payments to other foreign financial institutions</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/1472">Section 1472</external-xref> is amended—</text> <paragraph commented="no" display-inline="no-display-inline" id="H02A98400F5A449A6A6FD2DA928024CA1"><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="HF72B830E43B549CCA94924C215B9749E"><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="H051FE4DA9CD14CDE9AB4CB6245F9239D"><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="H443023FF3DF34D9584A20171241299CA"><enum>(e)</enum><header>Special rules</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/1474">Section 1474(c)</external-xref> is amended—</text> <paragraph commented="no" display-inline="no-display-inline" id="HF657524AAA4645E5AEE11079A5743385"><enum>(1)</enum><text display-inline="yes-display-inline">by inserting <quote>, except that information provided under section 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="H4E002BEB59AD43E796D7DB8FB169EBB1"><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="H73D9DA8FE8524A91AFDEC12F03535CF0"><enum>(f)</enum><header>Information with respect to foreign financial assets</header><text display-inline="yes-display-inline"><external-xref legal-doc="usc" parsable-cite="usc/26/6038D">Section 6038D(a)</external-xref> is amended by inserting <quote>ownership or beneficial ownership</quote> after <quote>holds any</quote>.</text>
</subsection><subsection id="H59A7C477D29D4FACA4C7DE50AC443477"><enum>(g)</enum><header>Establishing presumptions for entities and transactions involving non-FATCA institutions</header>
<paragraph id="H1E57D9DF71D44231B67FAFF4FC6AFB68"><enum>(1)</enum><header>Presumptions for tax purposes</header>
<subparagraph id="HBE59061DDC27418D83A1699213E1D9F7"><enum>(A)</enum><header>In general</header><text><external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/76">Chapter 76</external-xref> is amended by inserting after section 7491 the following new subchapter:</text> <quoted-block display-inline="no-display-inline" id="HA21EDCE2935A40F4A58699FD36348023" style="OLC"> <subchapter id="H9644C6E82C3049A791B9DBF315A75206"><enum>F</enum><header>Presumptions for certain legal proceedings</header><toc><toc-entry idref="H19BDA52AFF634F28B93C4DCDDA0450D8" level="section">Sec. 7492. Presumptions pertaining to entities and transactions involving non-FATCA institutions.</toc-entry></toc> <section id="H19BDA52AFF634F28B93C4DCDDA0450D8"><enum>7492.</enum><header>Presumptions pertaining to entities and transactions involving non-FATCA institutions</header> <subsection id="H894DE58AAE944FB688BEEBF53EA71466"><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="HFD19648B84BB455EBF3240DAC80E0CD2"><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="HE927DCE765284162B575B7A23CE6B822"><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="HC7AB55A6D3E34D76909ABF573D8E862C"><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="HF7CD01252C1540AAB4D324CDABE4B361"><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="H7FA4AA47950549EE96B21AF80730E469"><enum>(B)</enum><text>The table of subchapters for <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/76">chapter 76</external-xref> is amended by inserting after the item relating to subchapter E the following new item:</text>
<quoted-block id="H30938B20BF4F447EAB350204EA8229AB" style="OLC"><toc><toc-entry idref="H9644C6E82C3049A791B9DBF315A75206" level="subchapter">Subchapter F. Presumptions for certain legal proceedings</toc-entry></toc><after-quoted-block>.</after-quoted-block></quoted-block>
</subparagraph></paragraph><paragraph id="H6B117CB5804244C29AC35110F1582F31"><enum>(2)</enum><header>Definition of non-fatca institution</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/7701">Section 7701(a)</external-xref> is amended by adding at the end the following new paragraph:</text> <quoted-block display-inline="no-display-inline" id="HF6EC8E4078A742DB96B5BF540D3A53A0" style="OLC"> <paragraph id="H8645D4C60AE44C969198C1E188ABBF84"><enum>(51)</enum><header>Non-fatca institution</header><text>The term <term>non-FATCA institution</term> means any foreign 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="H73F9585B6053443A8DA3010E6E439F5E"><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="HB825182BB28047979B2D506144C286B1" style="OLC">
<subsection id="H2DCBBA87F25845A094126808E2FCC72D"><enum>(j)</enum><header>Presumptions pertaining to control and beneficial ownership</header>
<paragraph id="HF008A2C9AF164A848861C4FF9A6FA089"><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 <external-xref legal-doc="usc" parsable-cite="usc/26/7701">section 7701(a)(51)</external-xref> 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="H710D95C0E6E74467B0FA6C87764A92AE"><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="H646659ADCDE94B1C9DFCF4E0589BF77D"><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="HB9F0D55CACBC4336BDECB2E549561452" style="OLC">
<subsection id="HC736A81A99294010A5F4EFED77C2A23B"><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="H53733B4F696B4E61BC072C7250A4F241"><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="H061E5708D0734B31A7088DFD5337BBEA"><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 commented="no" display-inline="no-display-inline" id="H131B5C24C7DD48D385C646836A666633"><enum>203.</enum><header>Reporting United States beneficial owners of foreign owned financial accounts</header>
<subsection id="H1B2A64A481194EC49D53D560FCD59DE4"><enum>(a)</enum><header>In general</header><text>Subpart B of part III of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/61">chapter 61</external-xref> is amended by inserting after section 6045B the following new sections:</text>
<quoted-block display-inline="no-display-inline" id="HE95F704AB202401B99F153888680E4DD" style="OLC">
<section id="HA122B61D3CFB4028887DA9314629FCC2"><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="HEA8536B0076F46C29F8FAA484BCE472A"><enum>(a)</enum><header>Requirement of return</header><text>If—</text> <paragraph id="H576D04DB2F274DBA8DD7A48966164B2C"><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="H3C714522A1424499AD49C1882E1873A8"><enum>(2)</enum><text>such withholding agent determines for purposes of title 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="H63DCDC73F24E427E9A5051A486F61810"><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="H76B688FE164A4C06A666EA9658CB72C8"><enum>(1)</enum><text>the name, address, and, if known, the taxpayer identification number of the United States beneficial owner,</text>
</paragraph><paragraph id="HD8D9CDA1AD844CD19F4196D2874FD42C"><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="HC83C1C7809ED42699E9A6A83026FBA44"><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="H1A5E49F903C94AEAB298765F0540A864"><enum>(4)</enum><text>such other information as the Secretary may by forms or regulations provide.</text> </paragraph></subsection><subsection id="H1BC8202786EC4DDCA9513E67BA178D77"><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="H3EA020E7D4CF4833B51EC804C6A34877"><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="HCCD088A51BA340A484F2F1B766BAFC60"><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="HC61F45A2C1B24F418A17223915B28A5A"><enum>6045D.</enum><header>Returns by financial institutions regarding establishment of accounts in non-FATCA institutions</header>
<subsection id="HBF682DE722984834A268B9C1383EDA0C"><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="HC93783FF8DA54EC0A097D9652F302E48"><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="H49008B5C576244C4B6F06A2F79EA91CB"><enum>(1)</enum><text>the name, address, and taxpayer identification number of such United States person,</text>
</paragraph><paragraph id="H7BACF80D813D409FA30ADB573E69C844"><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="HAFF2DBA86B36487BB290D574564FC57B"><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="H6E99E6141E8A43A4A1EDAC8ED94D8E0A"><enum>(4)</enum><text>such other information as the Secretary may by forms or regulations provide.</text> </paragraph></subsection><subsection id="HB8FEBBA037A84CC8853AD94075883BAD"><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="HC9B25983CF324B209A9A72875366A17C"><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="HDCEBC202F5C74C4B8D8C952363E5A898"><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="HF238C33DB42A407A92F7DEC58C4D926F"><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="H9EDC54DFB3554DB689814ED2F8408EB6"><enum>(b)</enum><header>Penalties</header>
<paragraph id="H12665E7BF966427580DBED1F74077775"><enum>(1)</enum><header>Returns</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6724">Section 6724(d)(1)(B)</external-xref> 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="H4C5CC8A0C44C46DB88AA8A9D81A89415" style="OLC"> <clause id="HB35ADAE8127A4FF9A2C2FD33C3D0167A"><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="HFF5A908F9BA44DC39D8C4D740525EE17"><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="H8B10484AC4444988BA959404CA1959D0"><enum>(2)</enum><header>Payee statements</header><text><external-xref legal-doc="usc" parsable-cite="usc/26/6724">Section 6724(d)(2)</external-xref> is amended by striking <quote>or</quote> at the end of subparagraph (HH), by striking the period at the end of subparagraph (II), and by inserting after subparagraph (II) the following new subparagraphs:</text>
<quoted-block display-inline="no-display-inline" id="HE827DC36A1FE4A4F8839F791E3BDC73D" style="OLC">
<subparagraph id="H0E6EE4BA9A964B7EA793FF025E4377B8"><enum>(JJ)</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), or</text>
</subparagraph><subparagraph id="HC288A5587A4B46418848589F23CF4DF6"><enum>(KK)</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="HAA00361420314DFEA4E1DF46B8043D79"><enum>(c)</enum><header>Clerical amendment</header><text>The table of sections for subpart B of part III of subchapter A of <external-xref legal-doc="usc-chapter" parsable-cite="usc-chapter/26/61">chapter 61</external-xref> is amended by inserting after the item relating to section 6045B the following new items:</text>
<quoted-block display-inline="no-display-inline" id="H4B1C750D55704F6FA42D03F4A3A4F7A4" 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="H6183E25B44E9431CB3D255C7DC861B9D"><enum>(d)</enum><header>Additional penalties</header>
<paragraph commented="no" id="H518C4B91BE2D482EA14D46B1B33654C7"><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="HA491B5D3A66D4BA5BAD70B5D08734EF1"><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 <external-xref legal-doc="usc" parsable-cite="usc/26/6045D">section 6045D</external-xref> of the Internal Revenue Code of 1986,</quote> after <quote>the rules or regulations thereunder,</quote>.</text>
</paragraph></subsection><subsection id="H7F90122BD18948B890E55FBB20140675"><enum>(e)</enum><header>Regulatory authority and effective date</header>
<paragraph id="H4D011045BD5641FCB150B85EE05856EC"><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="H520B011361A74F57A9E2866737E908B2"><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="H19C2CC1CC34A4567915D05D26440CAAF"><enum>204.</enum><header>Penalty for failing to disclose offshore holdings</header>
<subsection id="H762E908D9B0D43C092B1CBDFEE611A06"><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="H784E524CF6C1466999E88F75BED7753F" style="OLC">
<clause id="HC47DCA83719642E1BDC69C52F91E44C9"><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="H60F481848A904AD78698A5E493EAB0CE"><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="H1704275996F443E1915060F294B9B8EC"><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="HD5BEB80CA18346AA98483D40B62C86AF"><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="HD81CAD459DA04960BC4EF625EDE352CA"><enum>(b)</enum><header>Securities Act of 1933</header><text>Section 20(d)(2) of the Securities Act of 1933 (<external-xref legal-doc="usc" parsable-cite="usc/15/77t">15 U.S.C. 77t(d)(2)</external-xref>) is amended by adding at the end the following:</text>
<quoted-block display-inline="no-display-inline" id="HB5B110240DCB49379FA941ADB486AE3A" style="OLC">
<subparagraph id="H4A8436C08609407AA6D4BB8D19419986"><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="H1FDADF27DCB04252A3FF9E40BDEF3325"><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="H59AFD9760DCF4D2EB8C37A5F0AED23DF"><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="H6002A98C18EB4A899C55BA757BB62454"><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="H51711AFA4303460980784E7257884256"><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="H97BB84005EFD478AB8389AFEA2CBAE89" style="OLC">
<subparagraph id="HCDA8A53EA73A4A2EA0AD432518375476"><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="HA5552C01445A44C890D7C19700DB5786"><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="H90BB7FBAF8FD4701A15EB01BB5533F49"><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="H62CB6BA7C21146C39ACE76997FC599A2"><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="HDD27EFF2237B4AD9B9541EEF54B9D858"><enum>205.</enum><header>Deadline for anti-money laundering rule for investment advisers</header>
<subsection id="H5428F47208F340BA9B03D7571F57E627"><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="H9C373BAF47EC4229837C5A18F0E2237F"><enum>(1)</enum><text>in subparagraph (Y), by striking <quote>or</quote> at the end;</text>
</paragraph><paragraph id="H12E3D5206FA5441987BBC5C8AAD56F1F"><enum>(2)</enum><text>by redesignating subparagraph (Z) as subparagraph (BB); and</text> </paragraph><paragraph id="H58E64A329E3443ED9C2DA77A8891B9D7"><enum>(3)</enum><text>by inserting after subparagraph (Y) the following:</text>
<quoted-block display-inline="no-display-inline" id="H8D0EF9EF4B05412EBD89875934B47576" style="OLC">
<subparagraph id="HA228D758CC2C4640B09B5D91A650BF03"><enum>(Z)</enum><text>an investment adviser;</text></subparagraph><after-quoted-block>.</after-quoted-block></quoted-block> </paragraph></subsection><subsection id="H8AA73F17E21F43BFB225E619F7318F2E"><enum>(b)</enum><header>Rules required</header><text>The Secretary of the Treasury shall—</text>
<paragraph id="H8A0AB1136D834E97A160AD02272CA48E"><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 180 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="HF259ACE6E05047B09F7D341BB4694307"><enum>(2)</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 paragraph (1).</text>
</paragraph></subsection><subsection id="HBAFEEE2CD80A4BAD8A2955F90895307A"><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 (<external-xref legal-doc="usc" parsable-cite="usc/15/80b-3">15 U.S.C. 80b–3</external-xref>)—</text>
<paragraph id="H332010A9A25944A1A9D94019679B4F7D"><enum>(1)</enum><text>to submit suspicious activity reports and establish an anti-money laundering program under subsections (g) and (h), respectively, of section 5318 of title 31, United States Code; and</text>
</paragraph><paragraph id="H26055771BAC44CEAA21F3F5D4877D52B"><enum>(2)</enum><text>to comply with—</text> <subparagraph id="H384D01A302D148D38BAAE7660664141C"><enum>(A)</enum><text>the customer identification program requirements under section 5318(l) of title 31, United States Code; and</text>
</subparagraph><subparagraph id="H132E35D405B740A5BB6F348D4EF9E117"><enum>(B)</enum><text>the due diligence requirements under section 5318(i) of title 31, United States Code.</text> </subparagraph></paragraph></subsection></section><section id="H8F3EA6D8359C4B0D8760D4FCA7DEB312"><enum>206.</enum><header>Anti-money laundering requirements for formation agents</header> <subsection id="H470145723E9648669E23EA6C8E08D325"><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="H104A5741590148889A3F288AB931ECAF" style="OLC">
<subparagraph id="HCEFF830EFF5447C4B0675410BCA1BB42"><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="HE72DAD1C8A7C4A869352265B8AD4FB4A"><enum>(b)</enum><header>Deadline for anti-Money laundering rule for formation agents</header>
<paragraph id="H6544CACD68CA4A1891C82F72315BBC1A"><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="HAF07CE5E2C2F442A8B67C9D34640B630"><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 <external-xref legal-doc="usc" parsable-cite="usc/26/5318">section 5318(h)</external-xref> of that title; and</text>
</subparagraph><subparagraph id="HE7A070EE28A94F39AF29E696F7085C58"><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="H790907BF20ED42ABB0E973E265D38B00"><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="H65A63CB2DB854C408CF07292EC7003D1"><enum>(A)</enum><text>any government agency; and</text> </subparagraph><subparagraph id="H49A07E6331FA4682B946AEA81FFD6364"><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="H00D7F874E9644F6885EC4477FB2E35B3"><enum>207.</enum><header>Strengthening John Doe summons proceedings</header>
<subsection id="HFC037F63BD0341658F7FB5338E25B748"><enum>(a)</enum><header>In general</header><text>Subsection (f) of <external-xref legal-doc="usc" parsable-cite="usc/26/7609">section 7609</external-xref> is amended to read as follows:</text> <quoted-block display-inline="no-display-inline" id="H63B05C64E17146CBBC32750886E28FE3" style="OLC"> <subsection id="HB35A29694E7D4BA6911ED157CD9B56B7"><enum>(f)</enum><header>Additional requirement in the case of a John Doe summons</header> <paragraph id="HF08A2F8C0E2D4C0EAB85769107631FFF"><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="HB62FF8DD6DCD41ECACCB9867476EFF2B"><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="H36D7CCE5372741A0BA450AD37DDC3F1C"><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="HDD3F1177F39741A1A3ED546D1174DA80"><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="HA04DB013577B47D88EC55E05826BC173"><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 section 5318A(e)(1)(B) of title 31, United States Code) or a United States payable-through account (as defined in <external-xref legal-doc="usc" parsable-cite="usc/26/5318A">section 5318A(e)(1)(C)</external-xref> 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="H513C90284843439C8A8E049C89EC2716"><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="H09BD4897CE524AB2AEFF7DC8F7395B01"><enum>(4)</enum><header>Project John Doe summonses</header>
<subparagraph id="H012D51BEE0E441D6B1B1E0CC0F9D4E0F"><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="HB85589765229423E8B6371320745C2B4"><enum>(i)</enum><text>relates to a project which is approved under subparagraph (B),</text> </clause><clause id="HFAA4887179B644168342E20EE2322395"><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="H9026230A190A46D88E1A0FFED3C2A0A0"><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="HB02063190FE14D84ACA803F15DED8ED9"><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="HDFF54020EE9242ECB0368711FBCB2DBA"><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="H54F4B4355E684432BC50330B4CB0FEFC"><enum>(ii)</enum><text>any summons issued with respect to such project will meet the requirements of paragraph (1).</text> </clause></subparagraph><subparagraph id="H32272BD69A974E36921EA96D65B8B39C"><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="H8F5D560D460C4BB2AD96C2FE6A459B4B"><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="H5FF96DEEC085496B8A45ECD535777700"><enum>(b)</enum><header>Jurisdiction of court</header>
<paragraph id="H6ABB8766056949A4923D0D5424E5E626"><enum>(1)</enum><header>In general</header><text>Paragraph (1) of <external-xref legal-doc="usc" parsable-cite="usc/26/7609">section 7609(h)</external-xref> 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)(4)(B).</quote>.</text>
</paragraph><paragraph id="HC0EFA6BEE88145B6AADCFF3A96EE05DC"><enum>(2)</enum><header>Conforming amendment</header><text>The first sentence of <external-xref legal-doc="usc" parsable-cite="usc/26/7609">section 7609(h)(1)</external-xref> is amended by striking <quote>(f)</quote> and inserting <quote>(f)(1)</quote>.</text> </paragraph></subsection><subsection id="HE61FABEFEE984F2DBBE9E468BCFE44B0"><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="HB24306B3CEB44697ACADD4AC285B3FBB"><enum>208.</enum><header>Improving enforcement of foreign financial account reporting</header>
<subsection id="H93C1437753ED419CB3EA088C76DAEF58"><enum>(a)</enum><header>Clarifying the connection of foreign financial account reporting to tax administration</header><text>Paragraph (4) of <external-xref legal-doc="usc" parsable-cite="usc/26/6103">section 6103(b)</external-xref> is amended by adding at the end the following new sentence:</text> <quoted-block display-inline="no-display-inline" id="HFF050CB451EB4CA2B2BF235AD63CA15E" style="OLC"> <quoted-block-continuation-text quoted-block-continuation-text-level="paragraph">For purposes of subparagraph (A)(i), section 5314 of title 31, United States Code, and <external-xref legal-doc="usc" parsable-cite="usc/26/5321">sections 5321</external-xref> and <external-xref legal-doc="usc" parsable-cite="usc/26/5322">5322</external-xref> 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="HA7FB97F32ABC414DB2713CC330549D4D"><enum>(b)</enum><header>Simplifying the calculation of foreign financial account reporting penalties</header><text>Section 5321(a)(5)(D)(ii) 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="HA00F5DF7CECB419F95BF9470363A207B"><enum>(c)</enum><header>Clarifying the use of suspicious activity reports under the Bank Secrecy Act for civil tax law
enforcement</header><text>Section 5319 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>