[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 779 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                 S. 779

    To end offshore corporate tax avoidance, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 13, 2019

Mr. Whitehouse (for himself and Mrs. Shaheen) introduced the following 
  bill; which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
    To end offshore corporate tax avoidance, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE, ETC.

    (a) Short Title.--This Act may be cited as the ``Stop Tax Haven 
Abuse Act''.
    (b) Amendment of 1986 Code.--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) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title, etc.
            TITLE I--ENDING CORPORATE OFFSHORE TAX AVOIDANCE

Sec. 101. Repeal of check-the-box rules for certain foreign entities 
                            and CFC look-thru rules.
Sec. 102. Limitation on deduction of interest by domestic corporations 
                            which are members of an international 
                            financial reporting group.
Sec. 103. Treatment of foreign corporations managed and controlled in 
                            the United States as domestic corporations.
Sec. 104. Swap payments made from the United States to persons 
                            offshore.
Sec. 105. Modifications to rules relating to inverted corporations.
Sec. 106. Requirement to disclose total corporate taxes paid.
Sec. 107. Penalty for election to pay tax on deferred foreign income in 
                            installments.
          TITLE II--ADDITIONAL MEASURES TO COMBAT TAX EVASION

Sec. 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.

            TITLE I--ENDING CORPORATE OFFSHORE TAX AVOIDANCE

SEC. 101. REPEAL OF CHECK-THE-BOX RULES FOR CERTAIN FOREIGN ENTITIES 
              AND CFC LOOK-THRU RULES.

    (a) Check-the-Box Rules.--Paragraph (3) of section 7701(a) is 
amended--
            (1) by striking ``and'', and
            (2) by inserting after ``insurance companies'' the 
        following: ``, and any foreign business entity that--
                    ``(A) has a single owner that does not have limited 
                liability, or
                    ``(B) has one or more members all of which have 
                limited liability''.
    (b) Look-Thru Rule.--Subparagraph (C) of section 954(c)(6) is 
amended to read as follows:
                    ``(C) Termination.--Subparagraph (A) shall not 
                apply to dividends, interest, rents, and royalties 
                received or accrued after the date of the enactment of 
                the Stop Tax Haven Abuse Act.''.
    (c) Effective Date.--
            (1) The amendments made by subsection (a) shall take effect 
        on the date of the enactment of this Act.
            (2) The amendment made by subsection (b) shall apply to 
        payments received after the date of the enactment of this Act.

SEC. 102. LIMITATION ON DEDUCTION OF INTEREST BY DOMESTIC CORPORATIONS 
              WHICH ARE MEMBERS OF AN INTERNATIONAL FINANCIAL REPORTING 
              GROUP.

    (a) In General.--Section 163 is amended by redesignating subsection 
(n) as subsection (p) and by inserting after subsection (m) the 
following new subsection:
    ``(n) Limitation on Deduction of Interest by Domestic Corporations 
in International Financial Reporting Groups.--
            ``(1) In general.--In the case of any domestic corporation 
        which is a member of any international financial reporting 
        group, the deduction under this chapter for interest paid or 
        accrued during the taxable year shall not exceed the sum of--
                    ``(A) the allowable percentage of 110 percent of 
                the excess (if any) of--
                            ``(i) the amount of such interest so paid 
                        or accrued, over
                            ``(ii) the amount described in subparagraph 
                        (B), plus
                    ``(B) the amount of interest includible in gross 
                income of such corporation for such taxable year.
            ``(2) International financial reporting group.--
                    ``(A) For purposes of this subsection, the term 
                `international financial reporting group' means, with 
                respect to any reporting year, any group of entities 
                which--
                            ``(i) includes--
                                    ``(I) at least one foreign 
                                corporation engaged in a trade or 
                                business within the United States, or
                                    ``(II) at least one domestic 
                                corporation and one foreign 
                                corporation,
                            ``(ii) prepares consolidated financial 
                        statements with respect to such year, and
                            ``(iii) reports in such statements average 
                        annual gross receipts (determined in the 
                        aggregate with respect to all entities which 
                        are part of such group) for the 3-reporting-
                        year period ending with such reporting year in 
                        excess of $100,000,000.
                    ``(B) Rules relating to determination of average 
                gross receipts.--For purposes of subparagraph (A)(iii), 
                rules similar to the rules of section 448(c)(3) shall 
                apply.
            ``(3) Allowable percentage.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `allowable percentage' 
                means, with respect to any domestic corporation for any 
                taxable year, the ratio (expressed as a percentage and 
                not greater than 100 percent) of--
                            ``(i) such corporation's allocable share of 
                        the international financial reporting group's 
                        reported net interest expense for the reporting 
                        year of such group which ends in or with such 
                        taxable year of such corporation, over
                            ``(ii) such corporation's reported net 
                        interest expense for such reporting year of 
                        such group.
                    ``(B) Reported net interest expense.--The term 
                `reported net interest expense' means--
                            ``(i) with respect to any international 
                        financial reporting group for any reporting 
                        year, the excess of--
                                    ``(I) the aggregate amount of 
                                interest expense reported in such 
                                group's consolidated financial 
                                statements for such taxable year, over
                                    ``(II) the aggregate amount of 
                                interest income reported in such 
                                group's consolidated financial 
                                statements for such taxable year, and
                            ``(ii) with respect to any domestic 
                        corporation for any reporting year, the excess 
                        of--
                                    ``(I) the amount of interest 
                                expense of such corporation reported in 
                                the books and records of the 
                                international financial reporting group 
                                which are used in preparing such 
                                group's consolidated financial 
                                statements for such taxable year, over
                                    ``(II) the amount of interest 
                                income of such corporation reported in 
                                such books and records.
                    ``(C) Allocable share of reported net interest 
                expense.--With respect to any domestic corporation 
                which is a member of any international financial 
                reporting group, such corporation's allocable share of 
                such group's reported net interest expense for any 
                reporting year is the portion of such expense which 
                bears the same ratio to such expense as--
                            ``(i) the EBITDA of such corporation for 
                        such reporting year, bears to
                            ``(ii) the EBITDA of such group for such 
                        reporting year.
                    ``(D) EBITDA.--
                            ``(i) In general.--The term `EBITDA' means, 
                        with respect to any reporting year, earnings 
                        before interest, taxes, depreciation, and 
                        amortization--
                                    ``(I) as determined in the 
                                international financial reporting 
                                group's consolidated financial 
                                statements for such year, or
                                    ``(II) for purposes of subparagraph 
                                (A)(i), as determined in the books and 
                                records of the international financial 
                                reporting group which are used in 
                                preparing such statements if not 
                                determined in such statements.
                            ``(ii) Treatment of disregarded entities.--
                        The EBITDA of any domestic corporation shall 
                        not fail to include the EBITDA of any entity 
                        which is disregarded for purposes of this 
                        chapter.
                            ``(iii) Treatment of intra-group 
                        distributions.--The EBITDA of any domestic 
                        corporation shall be determined without regard 
                        to any distribution received by such 
                        corporation from any other member of the 
                        international financial reporting group.
                    ``(E) Special rules for non-positive ebitda.--
                            ``(i) Non-positive group ebitda.--In the 
                        case of any international financial reporting 
                        group the EBITDA of which is zero or less, 
                        paragraph (1) shall not apply to any member of 
                        such group the EBITDA of which is above zero.
                            ``(ii) Non-positive entity ebitda.--In the 
                        case of any group member the EBITDA of which is 
                        zero or less, paragraph (1) shall be applied 
                        without regard to subparagraph (A) thereof.
            ``(4) Consolidated financial statement.--For purposes of 
        this subsection, the term `consolidated financial statement' 
        means any consolidated financial statement described in 
        paragraph (2)(A)(ii) if such statement is--
                    ``(A) a financial statement which is certified as 
                being prepared in accordance with generally accepted 
                accounting principles, international financial 
                reporting standards, or any other comparable method of 
                accounting identified by the Secretary, and which is--
                            ``(i) a 10-K (or successor form), or annual 
                        statement to shareholders, required to be filed 
                        with the United States Securities and Exchange 
                        Commission,
                            ``(ii) an audited financial statement which 
                        is used for--
                                    ``(I) credit purposes,
                                    ``(II) reporting to shareholders, 
                                partners, or other proprietors, or to 
                                beneficiaries, or
                                    ``(III) any other substantial 
                                nontax purpose,
                        but only if there is no statement described in 
                        clause (i), or
                            ``(iii) filed with any other Federal or 
                        State agency for nontax purposes, but only if 
                        there is no statement described in clause (i) 
                        or (ii), or
                    ``(B) a financial statement which--
                            ``(i) is used for a purpose described in 
                        subclause (I), (II), or (III) of subparagraph 
                        (A)(ii), or
                            ``(ii) filed with any regulatory or 
                        governmental body (whether domestic or foreign) 
                        specified by the Secretary,
                but only if there is no statement described in 
                subparagraph (A).
            ``(5) Reporting year.--For purposes of this subsection, the 
        term `reporting year' means, with respect to any international 
        financial reporting group, the year with respect to which the 
        consolidated financial statements are prepared.
            ``(6) Application to certain entities.--
                    ``(A) Partnerships.--Except as otherwise provided 
                by the Secretary in paragraph (7), this subsection and 
                subsection (o) shall apply to any partnership which is 
                a member of any international financial reporting group 
                under rules similar to the rules of section 163(j)(4).
                    ``(B) Foreign corporations engaged in trade or 
                business within the united states.--Except as otherwise 
                provided by the Secretary in paragraph (7), any 
                deduction for interest paid or accrued by a foreign 
                corporation engaged in a trade or business within the 
                United States shall be limited in a manner consistent 
                with the principles of this subsection.
                    ``(C) Consolidated groups.--For purposes of this 
                subsection, the members of any group that file (or are 
                required to file) a consolidated return with respect to 
                the tax imposed by chapter 1 for a taxable year shall 
                be treated as a single corporation.
            ``(7) Regulations.--The Secretary may issue such 
        regulations or other guidance as are necessary or appropriate 
        to carry out the purposes of this subsection.''.
    (b) Carryforward of Disallowed Interest.--
            (1) In general.--Section 163 is amended by inserting after 
        subsection (n), as added by subsection (a), the following new 
        subsection:
    ``(o) Carryforward of Certain Disallowed Interest.--The amount of 
any interest not allowed as a deduction for any taxable year by reason 
of subsection (j)(1) or (n)(1) (whichever imposes the lower limitation 
with respect to such taxable year) shall be treated as interest (and as 
business interest for purposes of subsection (j)(1)) paid or accrued in 
the succeeding taxable year. Interest paid or accrued in any taxable 
year (determined without regard to the preceding sentence) shall not be 
carried past the fifth taxable year following such taxable year, 
determined by treating interest as allowed as a deduction on a first-
in, first-out basis.''.
            (2) Conforming amendments.--
                    (A) Section 163(j)(2) is amended to read as 
                follows:
            ``(2) Carryforward cross-reference.--For carryforward 
        treatment, see subsection (o).''.
                    (B) Section 163(j)(4)(B)(i)(I) is amended by 
                striking ``paragraph (2)'' and inserting ``subsection 
                (o)''.
                    (C) Section 381(c)(20) is amended to read as 
                follows:
            ``(20) Carryforward of disallowed interest.--The carryover 
        of disallowed interest described in section 163(o) to taxable 
        years ending after the date of distribution or transfer.''.
                    (D) Section 382(d)(3) is amended to read as 
                follows:
            ``(3) Application to carryforward of disallowed interest.--
        The term `pre-change loss' shall include any carryover of 
        disallowed interest described in section 163(o) under rules 
        similar to the rules of paragraph (1).''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2018.

SEC. 103. TREATMENT OF FOREIGN CORPORATIONS MANAGED AND CONTROLLED IN 
              THE UNITED STATES AS DOMESTIC CORPORATIONS.

    (a) In General.--Section 7701 is amended by redesignating 
subsection (p) as subsection (q) and by inserting after subsection (o) 
the following new subsection:
    ``(p) Certain Corporations Managed and Controlled in the United 
States Treated as Domestic for Income Tax.--
            ``(1) In general.--Notwithstanding subsection (a)(4), in 
        the case of a corporation described in paragraph (2) if--
                    ``(A) the corporation would not otherwise be 
                treated as a domestic corporation for purposes of this 
                title, but
                    ``(B) the management and control of the corporation 
                occurs, directly or indirectly, primarily within the 
                United States,
        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.
            ``(2) Corporation described.--
                    ``(A) In general.--A corporation is described in 
                this paragraph if--
                            ``(i) the stock of such corporation is 
                        regularly traded on an established securities 
                        market, or
                            ``(ii) 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.
                    ``(B) General exception.--A corporation shall not 
                be treated as described in this paragraph if--
                            ``(i) such corporation was treated as a 
                        corporation described in this paragraph in a 
                        preceding taxable year,
                            ``(ii) such corporation--
                                    ``(I) is not regularly traded on an 
                                established securities market, and
                                    ``(II) 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
                            ``(iii) the Secretary grants a waiver to 
                        such corporation under this subparagraph.
            ``(3) Management and control.--
                    ``(A) In general.--The Secretary shall prescribe 
                regulations for purposes of determining cases in which 
                the management and control of a corporation is to be 
                treated as occurring primarily within the United 
                States.
                    ``(B) Executive officers and senior management.--
                Such regulations shall provide that--
                            ``(i) 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
                            ``(ii) 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).
                    ``(C) Corporations primarily holding investment 
                assets.--Such regulations shall also provide that the 
                management and control of a corporation shall be 
                treated as occurring primarily within the United States 
                if--
                            ``(i) the assets of such corporation 
                        (directly or indirectly) consist primarily of 
                        assets being managed on behalf of investors, 
                        and
                            ``(ii) decisions about how to invest the 
                        assets are made in the United States.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning on or after the date which is 2 years 
after the date of the enactment of this Act, whether or not regulations 
are issued under section 7701(p)(3) of the Internal Revenue Code of 
1986, as added by this section.

SEC. 104. SWAP PAYMENTS MADE FROM THE UNITED STATES TO PERSONS 
              OFFSHORE.

    (a) Tax on Swap Payments Received by Foreign Persons.--Section 
871(a)(1) is amended--
            (1) by inserting ``swap payments (as identified in section 
        1256(b)(2)(B)),'' after ``annuities,'' in subparagraph (A), and
            (2) by adding at the end the following new sentence: ``In 
        the case of swap payments, the source of a swap payment is 
        determined by reference to the location of the payor.''.
    (b) Tax on Swap Payments Received by Foreign Corporations.--Section 
881(a) is amended--
            (1) by inserting ``swap payments (as identified in section 
        1256(b)(2)(B)),'' after ``annuities,'' in paragraph (1), and
            (2) by adding at the end the following new sentence: ``In 
        the case of swap payments, the source of a swap payment is 
        determined by reference to the location of the payor.''.

SEC. 105. MODIFICATIONS TO RULES RELATING TO INVERTED CORPORATIONS.

    (a) In General.--Subsection (b) of section 7874 is amended to read 
as follows:
    ``(b) Inverted Corporations Treated as Domestic Corporations.--
            ``(1) In general.--Notwithstanding section 7701(a)(4), a 
        foreign corporation shall be treated for purposes of this title 
        as a domestic corporation if--
                    ``(A) such corporation would be a surrogate foreign 
                corporation if subsection (a)(2) were applied by 
                substituting `80 percent' for `60 percent', or
                    ``(B) such corporation is an inverted domestic 
                corporation.
            ``(2) Inverted domestic corporation.--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)--
                    ``(A) the entity completes after December 22, 2017, 
                the direct or indirect acquisition of--
                            ``(i) substantially all of the properties 
                        held directly or indirectly by a domestic 
                        corporation, or
                            ``(ii) substantially all of the assets of, 
                        or substantially all of the properties 
                        constituting a trade or business of, a domestic 
                        partnership, and
                    ``(B) after the acquisition, either--
                            ``(i) more than 50 percent of the stock (by 
                        vote or value) of the entity is held--
                                    ``(I) 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
                                    ``(II) 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
                            ``(ii) 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.
            ``(3) Exception for corporations with substantial business 
        activities in foreign country of organization.--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 `substantial business 
        activities' shall have the meaning given such term under 
        regulations in effect on December 22, 2017, 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.
            ``(4) Management and control.--For purposes of paragraph 
        (2)(B)(ii)--
                    ``(A) In general.--The Secretary shall prescribe 
                regulations for purposes of determining cases in which 
                the management and control of an expanded affiliated 
                group is to be treated as occurring, directly or 
                indirectly, primarily within the United States. The 
                regulations prescribed under the preceding sentence 
                shall apply to periods after December 22, 2017.
                    ``(B) Executive officers and senior management.--
                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.
            ``(5) Significant domestic business activities.--For 
        purposes of paragraph (2)(B)(ii), an expanded affiliated group 
        has significant domestic business activities if at least 25 
        percent of--
                    ``(A) the employees of the group are based in the 
                United States,
                    ``(B) the employee compensation incurred by the 
                group is incurred with respect to employees based in 
                the United States,
                    ``(C) the assets of the group are located in the 
                United States, or
                    ``(D) the income of the group is derived in the 
                United States,
        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 
        December 22, 2017, but applied by treating all references in 
        such regulations to `foreign country' and `relevant foreign 
        country' as references to `the United States'. 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.''.
    (b) Conforming Amendments.--
            (1) Clause (i) of section 7874(a)(2)(B) is amended by 
        striking ``after March 4, 2003,'' and inserting ``after March 
        4, 2003, and before December 23, 2017,''.
            (2) Subsection (c) of section 7874 is amended--
                    (A) in paragraph (2)--
                            (i) by striking ``subsection 
                        (a)(2)(B)(ii)'' and inserting ``subsections 
                        (a)(2)(B)(ii) and (b)(2)(B)(i)''; and
                            (ii) by inserting ``or (b)(2)(A)'' after 
                        ``(a)(2)(B)(i)'' in subparagraph (B);
                    (B) in paragraph (3), by inserting ``or 
                (b)(2)(B)(i), as the case may be,'' after 
                ``(a)(2)(B)(ii)'';
                    (C) in paragraph (5), by striking ``subsection 
                (a)(2)(B)(ii)'' and inserting ``subsections 
                (a)(2)(B)(ii) and (b)(2)(B)(i)''; and
                    (D) in paragraph (6), by inserting ``or inverted 
                domestic corporation, as the case may be,'' after 
                ``surrogate foreign corporation''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years ending after December 22, 2017.

SEC. 106. REQUIREMENT TO DISCLOSE TOTAL CORPORATE TAXES PAID.

    (a) In General.--Section 13 of the Securities Exchange Act of 1934 
(15 U.S.C. 78m) is amended by adding at the end the following new 
subsection:
    ``(s) Disclosure of Total Corporate Taxes Paid.--
            ``(1) Issuer disclosure requirement.--Each issuer required 
        to file an annual or quarterly report under subsection (a) 
        shall disclose in that report--
                    ``(A) the total pre-tax profit of the issuer during 
                the period covered by the report;
                    ``(B) the total amount paid by the issuer in State 
                taxes during the period covered by the report;
                    ``(C) the total amount paid by the issuer in 
                Federal taxes during the period covered by the report; 
                and
                    ``(D) the total amount paid by the issuer in 
                foreign taxes during the period covered by the report.
            ``(2) Disclosure of country-by-country reporting 
        information.--Each issuer required to file an annual or 
        quarterly report under subsection (a) shall disclose in that 
        report, for each of its subsidiaries and aggregated on a 
        country-by-country basis--
                    ``(A) revenues generated from transactions with 
                other constituent entities;
                    ``(B) revenues not generated from transactions with 
                other constituent entities;
                    ``(C) profit or loss before income tax;
                    ``(D) total income tax paid on a cash basis to all 
                tax jurisdictions, and any taxes withheld on payments 
                received by the constituent entities;
                    ``(E) total accrued tax expense recorded on taxable 
                profits or losses, reflecting only operations in the 
                relevant annual period and excluding deferred taxes or 
                provisions for uncertain tax liabilities;
                    ``(F) stated capital, except that the stated 
                capital of a permanent establishment must be reported 
                in the tax jurisdiction of residence of the legal 
                entity of which it is a permanent establishment unless 
                there is a defined capital requirement in the permanent 
                establishment tax jurisdiction for regulatory purposes;
                    ``(G) total accumulated earnings, except that 
                accumulated earnings of a permanent establishment must 
                be reported by the legal entity of which it is a 
                permanent establishment;
                    ``(H) total number of employees on a full-time 
                equivalent basis; and
                    ``(I) net book value of tangible assets, which, for 
                purposes of this section, does not include cash or cash 
                equivalents, intangibles, or financial assets.
            ``(3) Availability of information.--The Commission shall 
        make the information filed with the Commission pursuant to this 
        subsection publicly available through the Commission website in 
        a manner that is searchable, sortable, and downloadable.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to disclosures made after the date of the enactment of this Act.

SEC. 107. PENALTY FOR ELECTION TO PAY TAX ON DEFERRED FOREIGN INCOME IN 
              INSTALLMENTS.

    (a) In General.--Section 965(h) is amended by adding at the end the 
following new paragraph:
            ``(7) Penalty.--Interest on installments under this 
        subsection shall be payable as determined under section 6601 by 
        treating the last date prescribed for payment for any 
        installment as the date for payment of the first installment 
        under this subsection.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in section 14103 of Public Law 115-97.

          TITLE II--ADDITIONAL MEASURES TO COMBAT TAX EVASION

SEC. 201. AUTHORIZING SPECIAL MEASURES AGAINST FOREIGN JURISDICTIONS, 
              FINANCIAL INSTITUTIONS, AND OTHERS THAT SIGNIFICANTLY 
              IMPEDE UNITED STATES TAX ENFORCEMENT.

    (a) In General.--Section 5318A of title 31, United States Code, is 
amended--
            (1) by striking the section heading and inserting the 
        following: ``Special measures for jurisdictions, financial 
        institutions, or international transactions that are of primary 
        money laundering concern or significantly impede United States 
        tax enforcement'';
            (2) in subsection (a), by striking the subsection heading 
        and inserting the following: ``Special Measures To Counter 
        Money Laundering and Efforts to Significantly Impede United 
        States Tax Enforcement'';
            (3) in subsection (c)--
                    (A) by striking the subsection heading and 
                inserting the following: ``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''; 
                and
                    (B) in paragraph (2), by adding at the end the 
                following:
                    ``(C) Other considerations.--The fact that a 
                jurisdiction or financial institution is cooperating 
                with the United States on implementing the requirements 
                specified in chapter 4 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.'';
            (4) in subsection (a)(1), by inserting ``or is 
        significantly impeding United States tax enforcement'' after 
        ``primary money laundering concern'';
            (5) in subsection (a)(4)--
                    (A) in subparagraph (A)--
                            (i) by inserting ``in matters involving 
                        money laundering,'' before ``shall consult''; 
                        and
                            (ii) by striking ``and'' at the end;
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) 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'';
            (6) in each of paragraphs (1)(A), (2), (3), and (4) of 
        subsection (b), by inserting ``or to be significantly impeding 
        United States tax enforcement'' after ``primary money 
        laundering concern'' each place that term appears;
            (7) in subsection (b), by striking paragraph (5) and 
        inserting the following:
            ``(5) Prohibitions or conditions on opening or maintaining 
        certain correspondent or payable-through accounts or 
        authorizing certain payment cards.--If the Secretary finds a 
        jurisdiction outside of the United 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--
                    ``(A) the opening or maintaining in the United 
                States of a correspondent account or payable-through 
                account by any domestic financial institution or 
                domestic financial agency for or on behalf of a foreign 
                banking institution, if such correspondent account or 
                payable-through account involves any such jurisdiction 
                or institution, or if any such transaction may be 
                conducted through such correspondent account or 
                payable-through account; or
                    ``(B) 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, domestic 
                financial agency, or credit card company or association 
                for or on behalf of a foreign banking institution, if 
                such 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 credit card, charge card, 
                debit card, or similar credit or debit financial 
                instrument.'';
            (8) in subsection (c)(1), by inserting ``or is 
        significantly impeding United States tax enforcement'' after 
        ``primary money laundering concern'';
            (9) in subsection (c)(2)(A)--
                    (A) in clause (ii), by striking ``bank secrecy or 
                special regulatory advantages'' and inserting ``bank, 
                tax, corporate, trust, or financial secrecy or 
                regulatory advantages'';
                    (B) in clause (iii), by striking ``supervisory and 
                counter-money'' and inserting ``supervisory, 
                international tax enforcement, and counter-money'';
                    (C) in clause (v), by striking ``banking or 
                secrecy'' and inserting ``banking, tax, or secrecy''; 
                and
                    (D) in clause (vi), by inserting ``, tax treaty, or 
                tax information exchange agreement'' after ``treaty'';
            (10) in subsection (c)(2)(B)--
                    (A) in clause (i), by inserting ``or tax evasion'' 
                after ``money laundering''; and
                    (B) in clause (iii), by inserting ``, tax 
                evasion,'' after ``money laundering''; and
            (11) in subsection (d), by inserting ``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'' after ``such action''.
    (b) Clerical Amendment.--The table of contents for chapter 53 of 
title 31, United States Code, is amended by striking the item relating 
to section 5318A and inserting the following:

``5318A. Special measures for jurisdictions, financial institutions, or 
                            international transactions that are of 
                            primary money laundering concern or 
                            significantly impede United States tax 
                            enforcement.''.

SEC. 202. STRENGTHENING THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA).

    (a) Reporting Activities With Respect to Passive Foreign Investment 
Companies.--Section 1298(f) is amended by inserting ``, 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,'' after ``shareholder of''.
    (b) Withholdable Payments to Foreign Financial Institutions.--
Section 1471(d) is amended--
            (1) in paragraph (2)(A), by inserting ``or transaction'' 
        after ``any depository'', and
            (2) in paragraph (5)(C), by striking ``or any interest'' 
        and all that follows and inserting ``derivatives, or any 
        interest (including a futures or forward contract, swap, or 
        option) in such securities, partnership interests, commodities, 
        or derivatives.''.
    (c) Withholdable Payments to Other Foreign Financial 
Institutions.--Section 1472 is amended--
            (1) by inserting ``as a result of any customer 
        identification, anti-money laundering, anti-corruption, or 
        similar obligation to identify account holders,'' after 
        ``reason to know,'' in subsection (b)(2), and
            (2) by inserting ``as posing a low risk of tax evasion'' 
        after ``this subsection'' in subsection (c)(1)(G).
    (d) Definitions.--Clauses (i) and (ii) of section 1473(2)(A) are 
each amended by inserting ``or as a beneficial owner'' after 
``indirectly''.
    (e) Special Rules.--Section 1474(c) is amended--
            (1) by inserting ``, 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'' after ``shall apply'' in paragraph (1), and
            (2) by inserting ``, or has had an agreement terminated 
        under such section,'' after ``section 1471(b)'' in paragraph 
        (2).
    (f) Information With Respect to Foreign Financial Assets.--Section 
6038D(a) is amended by inserting ``ownership or beneficial ownership'' 
after ``holds any''.
    (g) Establishing Presumptions for Entities and Transactions 
Involving Non-FATCA Institutions.--
            (1) Presumptions for tax purposes.--
                    (A) In general.--Chapter 76 is amended by inserting 
                after section 7491 the following new subchapter:

       ``Subchapter F--Presumptions for Certain Legal Proceedings

``Sec. 7492. Presumptions pertaining to entities and transactions 
                            involving non-FATCA institutions.

``SEC. 7492. PRESUMPTIONS PERTAINING TO ENTITIES AND TRANSACTIONS 
              INVOLVING NON-FATCA INSTITUTIONS.

    ``(a) Control.--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.
    ``(b) Transfers of Income.--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.
    ``(c) Rebutting the Presumptions.--The presumptions established in 
this section may be rebutted only by clear and convincing evidence, 
including detailed documentary, testimonial, and transactional 
evidence, establishing that--
            ``(1) in subsection (a), such taxpayer exercised no 
        control, directly or indirectly, over account or entity at the 
        time in question, and
            ``(2) in subsection (b), such amounts or things of value 
        did not represent income related to such United States person.
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.''.
                    (B) The table of subchapters for chapter 76 is 
                amended by inserting after the item relating to 
                subchapter E the following new item:

     ``subchapter f. presumptions for certain legal proceedings''.

            (2) Definition of non-fatca institution.--Section 7701(a) 
        is amended by adding at the end the following new paragraph:
            ``(51) Non-fatca institution.--The term `non-FATCA 
        institution' means any foreign financial institution that does 
        not meet the reporting requirements of section 1471(b).''.
            (3) Presumptions for securities law purposes.--Section 21 
        of the Securities Exchange Act of 1934 (15 U.S.C. 78u) is 
        amended by adding at the end the following new subsection:
    ``(j) Presumptions Pertaining to Control and Beneficial 
Ownership.--
            ``(1) Control.--For purposes of any civil judicial or 
        administrative proceeding under this title, there shall be a 
        rebuttable presumption that a United States person who, 
        directly or indirectly, formed, transferred assets to, was a 
        beneficiary of, had a beneficial interest in, or received money 
        or property or the use thereof from an entity, including a 
        trust, corporation, limited liability company, partnership, or 
        foundation, that holds an account, or in any other manner has 
        assets, in a non-FATCA institution (as defined in section 
        7701(a)(51) of the Internal Revenue Code of 1986), exercised 
        control over such entity. The presumption of control created by 
        this paragraph shall not be applied to prevent the Commission 
        from determining or arguing the absence of control.
            ``(2) Beneficial ownership.--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.''.
            (4) Presumption for reporting purposes relating to foreign 
        financial accounts.--Section 5314 of title 31, United States 
        Code, is amended by adding at the end the following new 
        subsection:
    ``(d) Rebuttable Presumption.--For purposes of this section, there 
shall be a rebuttable presumption that any account with a non-FATCA 
institution (as defined in section 7701(a)(51) 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.''.
            (5) Regulatory authority.--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.
    (h) Effective Date.--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).

SEC. 203. REPORTING UNITED STATES BENEFICIAL OWNERS OF FOREIGN OWNED 
              FINANCIAL ACCOUNTS.

    (a) In General.--Subpart B of part III of subchapter A of chapter 
61 is amended by inserting after section 6045B the following new 
sections:

``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.

    ``(a) Requirement of Return.--If--
            ``(1) 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
            ``(2) 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 `United States beneficial owner'),
then the withholding agent shall make a return according to the forms 
or regulations prescribed by the Secretary.
    ``(b) Required Information.--For purposes of subsection (a) the 
information required to be included on the return shall include--
            ``(1) the name, address, and, if known, the taxpayer 
        identification number of the United States beneficial owner,
            ``(2) the known facts pertaining to the relationship of 
        such United States beneficial owner to the foreign entity and 
        the account,
            ``(3) the gross amount of income from sources within the 
        United States (including gross proceeds from brokerage 
        transactions), and
            ``(4) such other information as the Secretary may by forms 
        or regulations provide.
    ``(c) Statements To Be Furnished to Beneficial Owners With Respect 
to Whom Information Is Required To Be Reported.--A withholding agent 
required to make a return under subsection (a) shall furnish to each 
United States beneficial owner whose name is required to be set forth 
in such return a statement showing--
            ``(1) the name, address, and telephone number of the 
        information contact of the person required to make such return, 
        and
            ``(2) the information required to be shown on such return 
        with respect to such United States beneficial owner.
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.

``SEC. 6045D. RETURNS BY FINANCIAL INSTITUTIONS REGARDING ESTABLISHMENT 
              OF ACCOUNTS IN NON-FATCA INSTITUTIONS.

    ``(a) Requirement of Return.--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.
    ``(b) Required Information.--For purposes of subsection (a) the 
information required to be included on the return shall include--
            ``(1) the name, address, and taxpayer identification number 
        of such United States person,
            ``(2) 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,
            ``(3) 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
            ``(4) such other information as the Secretary may by forms 
        or regulations provide.
    ``(c) Statements To Be Furnished to United States Persons With 
Respect to Whom Information Is Required To Be Reported.--A financial 
institution required to make a return under subsection (a) shall 
furnish to each United States person whose name is required to be set 
forth in such return a statement showing--
            ``(1) the name, address, and telephone number of the 
        information contact of the person required to make such return, 
        and
            ``(2) the information required to be shown on such return 
        with respect to such United States person.
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.
    ``(d) Exemption.--The Secretary may by regulations exempt any class 
of United States persons or any class of accounts or entities from the 
requirements of this section if the Secretary determines that applying 
this section to such persons, accounts, or entities is not necessary to 
carry out the purposes of this section.''.
    (b) Penalties.--
            (1) Returns.--Section 6724(d)(1)(B) is amended by striking 
        ``or'' at the end of clause (xxv), by striking ``and'' at the 
        end of clause (xxvi), and by adding after clause (xxvi) the 
        following new clauses:
                            ``(xxvii) 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
                            ``(xxviii) section 6045D(a) (relating to 
                        returns by financial institutions regarding 
                        establishment of accounts at non-FATCA 
                        institutions), and''.
            (2) Payee statements.--Section 6724(d)(2) is amended by 
        redesignating the second subparagraph (JJ) as subparagraph 
        (KK), by striking ``or'' at the end of subparagraph (II), by 
        striking the period at the end of subparagraph (KK) (as so 
        redesignated), and by inserting after such subparagraph (KK) 
        the following new subparagraphs:
                    ``(LL) 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
                    ``(MM) section 6045D(c) (relating to returns by 
                financial institutions regarding establishment of 
                accounts at non-FATCA institutions).''.
    (c) Clerical Amendment.--The table of sections for subpart B of 
part III of subchapter A of chapter 61 is amended by inserting after 
the item relating to section 6045B the following new items:

``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.
``Sec. 6045D. Returns by financial institutions regarding establishment 
                            of accounts at non-FATCA institutions.''.
    (d) Additional Penalties.--
            (1) Additional penalties on banks.--Section 5239(b)(1) of 
        the Revised Statutes of the United States (12 U.S.C. 93(b)(1)) 
        is amended by inserting ``or any of the provisions of section 
        6045D of the Internal Revenue Code of 1986,'' after ``any 
        regulation issued pursuant to,''.
            (2) Additional penalties on securities firms.--Section 
        21(d)(3)(A) of the Securities Exchange Act of 1934 (15 U.S.C. 
        78u(d)(3)(A)) is amended by inserting ``any of the provisions 
        of section 6045D of the Internal Revenue Code of 1986,'' after 
        ``the rules or regulations thereunder,''.
    (e) Regulatory Authority and Effective Date.--
            (1) Regulatory authority.--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.
            (2) Effective date.--Section 6045C 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. 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, whether 
        or not regulations are issued under Section 6045D.

SEC. 204. PENALTY FOR FAILING TO DISCLOSE OFFSHORE HOLDINGS.

    (a) Securities Exchange Act of 1934.--Section 21(d)(3)(B) of the 
Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(B)) is amended by 
adding at the end the following:
                            ``(iv) Fourth tier.--Notwithstanding 
                        clauses (i), (ii), and (iii), for each such 
                        violation, the amount of penalty shall not 
                        exceed $1,000,000 for any natural person or 
                        $10,000,000 for any other person, if--
                                    ``(I) 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;
                                    ``(II) such person knowingly or 
                                recklessly failed to disclose any such 
                                holding, purchase, or sale by the 
                                issuer; and
                                    ``(III) the holding, purchase, or 
                                sale would have been otherwise subject 
                                to disclosure by the issuer or such 
                                person under this title.''.
    (b) Securities Act of 1933.--Section 20(d)(2) of the Securities Act 
of 1933 (15 U.S.C. 77t(d)(2)) is amended by adding at the end the 
following:
                    ``(D) Fourth tier.--Notwithstanding subparagraphs 
                (A), (B), and (C), for each such violation, the amount 
                of penalty shall not exceed $1,000,000 for any natural 
                person or $10,000,000 for any other person, if--
                            ``(i) 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;
                            ``(ii) such person knowingly or recklessly 
                        failed to disclose any such holding, purchase, 
                        or sale by the issuer; and
                            ``(iii) the holding, purchase, or sale 
                        would have been otherwise subject to disclosure 
                        by the issuer or such person under this 
                        title.''.
    (c) Investment Advisers Act of 1940.--Section 203(i)(2) of the 
Investment Advisers Act of 1940 (15 U.S.C. 80b-3(i)(2)) is amended by 
adding at the end the following:
                    ``(D) Fourth tier.--Notwithstanding subparagraphs 
                (A), (B), and (C), for each such violation, the amount 
                of penalty shall not exceed $1,000,000 for any natural 
                person or $10,000,000 for any other person, if--
                            ``(i) 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;
                            ``(ii) such person knowingly or recklessly 
                        failed to disclose any such holding, purchase, 
                        or sale by the issuer; and
                            ``(iii) the holding, purchase, or sale 
                        would have been otherwise subject to disclosure 
                        by the issuer or such person under this 
                        title.''.

SEC. 205. DEADLINE FOR ANTI-MONEY LAUNDERING RULE FOR INVESTMENT 
              ADVISERS.

    (a) Anti-Money Laundering Obligations for Investment Advisers.--
Section 5312(a)(2) of title 31, United States Code, is amended--
            (1) in subparagraph (Y), by striking ``or'' at the end;
            (2) by redesignating subparagraph (Z) as subparagraph (BB); 
        and
            (3) by inserting after subparagraph (Y) the following:
                    ``(Z) an investment adviser (as defined in section 
                202(a) of the Investment Advisers Act of 1940);''.
    (b) Rules Required.--The Secretary of the Treasury shall--
            (1) in consultation with the Securities and Exchange 
        Commission and 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
            (2) 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).
    (c) Contents.--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 (15 U.S.C. 80b-
2(a)(11))) registered with the Securities and Exchange Commission 
pursuant to section 203 of that Act (15 U.S.C. 80b-3)--
            (1) 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
            (2) to comply with--
                    (A) the customer identification program 
                requirements under section 5318(l) of title 31, United 
                States Code; and
                    (B) the due diligence requirements under section 
                5318(i) of title 31, United States Code.

SEC. 206. ANTI-MONEY LAUNDERING REQUIREMENTS FOR FORMATION AGENTS.

    (a) Anti-Money Laundering Obligations for Formation Agents.--
Section 5312(a)(2) of title 31, United States Code, as amended by 
section 205 of this Act, is amended by inserting after subparagraph (Z) 
the following:
                    ``(AA) any person engaged in the business of 
                forming new corporations, limited liability companies, 
                partnerships, trusts, or other legal entities; or''.
    (b) Deadline for Anti-Money Laundering Rule for Formation Agents.--
            (1) Proposed rule.--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--
                    (A) not later than 120 days after the date of 
                enactment of this Act, publish a proposed rule in the 
                Federal Register requiring persons described in section 
                5312(a)(2)(AA) of title 31, United States Code, as 
                added by this section, to establish anti-money 
                laundering programs under section 5318(h) of that 
                title; and
                    (B) 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).
            (2) Exclusions.--The rule promulgated under this subsection 
        shall exclude from the category of persons engaged in the 
        business of forming new corporations or other entities--
                    (A) any government agency; and
                    (B) any attorney or law firm that uses a paid 
                formation agent operating within the United States to 
                form such corporations or other entities.

SEC. 207. STRENGTHENING JOHN DOE SUMMONS PROCEEDINGS.

    (a) In General.--Subsection (f) of section 7609 is amended to read 
as follows:
    ``(f) Additional Requirement in the Case of a John Doe Summons.--
            ``(1) General rule.--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--
                    ``(A) the summons relates to the investigation of a 
                particular person or ascertainable group or class of 
                persons,
                    ``(B) 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
                    ``(C) 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.
            ``(2) Exception.--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 section 
        5318A(e)(1)(C) of such title) of a financial institution that 
        is held at a non-FATCA institution (as defined in section 
        7701(a)(51)).
            ``(3) Presumption in cases involving non-fatca 
        institutions.--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.
            ``(4) Project john doe summonses.--
                    ``(A) In general.--Notwithstanding the requirements 
                of paragraph (1), the Secretary may issue a summons 
                described in paragraph (1) if the summons--
                            ``(i) relates to a project which is 
                        approved under subparagraph (B),
                            ``(ii) is issued to a person who is a 
                        member of the group or class established under 
                        subparagraph (B)(i), and
                            ``(iii) is issued within 3 years of the 
                        date on which such project was approved under 
                        subparagraph (B).
                    ``(B) Approval of projects.--A project may only be 
                approved under this subparagraph after a court 
                proceeding in which the Secretary establishes that--
                            ``(i) any summons issued with respect to 
                        the project will be issued to a member of an 
                        ascertainable group or class of persons, and
                            ``(ii) any summons issued with respect to 
                        such project will meet the requirements of 
                        paragraph (1).
                    ``(C) Extension.--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).
                    ``(D) Ongoing court oversight.--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.''.
    (b) Jurisdiction of Court.--
            (1) In general.--Paragraph (1) of section 7609(h) is 
        amended by inserting after the first sentence the following new 
        sentence: ``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).''.
            (2) Conforming amendment.--The first sentence of section 
        7609(h)(1) is amended by striking ``(f)'' and inserting 
        ``(f)(1)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to summonses issued after the date of the enactment of this Act.

SEC. 208. IMPROVING ENFORCEMENT OF FOREIGN FINANCIAL ACCOUNT REPORTING.

    (a) Clarifying the Connection of Foreign Financial Account 
Reporting to Tax Administration.--Paragraph (4) of section 6103(b) is 
amended by adding at the end the following new sentence:
        ``For purposes of subparagraph (A)(i), section 5314 of title 
        31, United States Code, and sections 5321 and 5322 of such 
        title (as such sections pertain to such section 5314), shall be 
        considered related statutes.''.
    (b) Simplifying the Calculation of Foreign Financial Account 
Reporting Penalties.--Section 5321(a)(5)(D)(ii) of title 31, United 
States Code, is amended by striking ``the balance in the account at the 
time of the violation'' and inserting ``the highest balance in the 
account during the reporting period to which the violation relates''.
    (c) Clarifying the Use of Suspicious Activity Reports Under the 
Bank Secrecy Act for Civil Tax Law Enforcement.--Section 5319 of title 
31, United States Code, is amended by inserting ``the civil and 
criminal enforcement divisions of the Internal Revenue Service,'' after 
``including''.
                                 <all>