II 

117TH CONGRESS 

1ST SESSION S. 725 

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

IN THE SENATE OF THE UNITED STATES 

MARCH 11, 2021 

Mr. WHITEHOUSE 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. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE, ETC. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Stop Tax Haven Abuse Act’’. 

6 (b) AMENDMENT OF 1986 CODE.—Except as other7 wise expressly provided, whenever in this Act an amend8 ment or repeal is expressed in terms of an amendment 

9 to, or repeal of, a section or other provision, the reference 

10 shall be considered to be made to a section or other provi11 sion of the Internal Revenue Code of 1986. 


pbinns on DSKJLVW7X2PROD with BILLS
2 

•S 725 IS

1 (c) TABLE OF CONTENTS.—The table of contents of 

2 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. Swap payments made from the United States to persons offshore. 

Sec. 103. Requirement to disclose total corporate taxes paid. 

Sec. 104. Penalty for election to pay tax on deferred foreign income in installments. 

Sec. 105. Modifications to base erosion and anti-abuse tax. 

Sec. 106. Treatment of foreign base company oil related income as subpart F 

income. 

Sec. 107. Modifications of foreign tax credit rules applicable to dual capacity 

taxpayers. 

Sec. 108. Treatment of intangibles transferred to partnerships. 

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. 

3 TITLE I—ENDING CORPORATE 

4 OFFSHORE TAX AVOIDANCE 

5 SEC. 101. REPEAL OF CHECK-THE-BOX RULES FOR CERTAIN 

6 FOREIGN ENTITIES AND CFC LOOK-THRU 

7 RULES. 

8 (a) CHECK-THE-BOX RULES.—Paragraph (3) of sec9 tion 7701(a) is amended— 

10 (1) by striking ‘‘and’’, and 


pbinns on DSKJLVW7X2PROD with BILLS
3 

•S 725 IS

1 (2) by inserting after ‘‘insurance companies’’ 

2 the following: ‘‘, and any foreign business entity 

3 that— 

4 ‘‘(A) has a single owner that does not have 

5 limited liability, or 

6 ‘‘(B) has one or more members all of 

7 which have limited liability’’. 

8 (b) LOOK-THRU RULE.—Subparagraph (C) of sec9 tion 954(c)(6) is amended to read as follows: 

10 ‘‘(C) TERMINATION.—Subparagraph (A) 

11 shall not apply to dividends, interest, rents, and 

12 royalties received or accrued after the date of 

13 the enactment of the Stop Tax Haven Abuse 

14 Act.’’. 

15 (c) EFFECTIVE DATE.— 

16 (1) The amendments made by subsection (a) 

17 shall take effect on the date of the enactment of this 

18 Act. 

19 (2) The amendment made by subsection (b) 

20 shall apply to payments received after the date of 

21 the enactment of this Act. 

22 SEC. 102. SWAP PAYMENTS MADE FROM THE UNITED 

23 STATES TO PERSONS OFFSHORE. 

24 (a) TAX ON SWAP PAYMENTS RECEIVED BY FOR25 EIGN PERSONS.—Section 871(a)(1) is amended— 


pbinns on DSKJLVW7X2PROD with BILLS
4 

•S 725 IS

1 (1) by inserting ‘‘swap payments (as identified 

2 in section 1256(b)(2)(B)),’’ after ‘‘annuities,’’ in 

3 subparagraph (A), and 

4 (2) by adding at the end the following new sen5 tence: ‘‘In the case of swap payments, the source of 

6 a swap payment is determined by reference to the lo7 cation of the payor.’’. 

8 (b) TAX ON SWAP PAYMENTS RECEIVED BY FOR9 EIGN CORPORATIONS.—Section 881(a) is amended— 

10 (1) by inserting ‘‘swap payments (as identified 

11 in section 1256(b)(2)(B)),’’ after ‘‘annuities,’’ in 

12 paragraph (1), and 

13 (2) by adding at the end the following new sen14 tence: ‘‘In the case of swap payments, the source of 

15 a swap payment is determined by reference to the lo16 cation of the payor.’’. 

17 SEC. 103. REQUIREMENT TO DISCLOSE TOTAL CORPORATE 

18 TAXES PAID. 

19 (a) IN GENERAL.—Section 13 of the Securities Ex20 change Act of 1934 (15 U.S.C. 78m) is amended by add21 ing at the end the following new subsection: 

22 ‘‘(s) DISCLOSURE OF TOTAL CORPORATE TAXES

23 PAID.— 

24 ‘‘(1) ISSUER DISCLOSURE REQUIREMENT.— 

25 Each issuer required to file an annual or quarterly 


pbinns on DSKJLVW7X2PROD with BILLS
5 

•S 725 IS

1 report under subsection (a) shall disclose in that re2 port— 

3 ‘‘(A) the total pre-tax profit of the issuer 

4 during the period covered by the report; 

5 ‘‘(B) the total amount paid by the issuer 

6 in State taxes during the period covered by the 

7 report; 

8 ‘‘(C) the total amount paid by the issuer in 

9 Federal taxes during the period covered by the 

10 report; and 

11 ‘‘(D) the total amount paid by the issuer 

12 in foreign taxes during the period covered by 

13 the report. 

14 ‘‘(2) DISCLOSURE OF COUNTRY-BY-COUNTRY

15 REPORTING INFORMATION.—Each issuer required to 

16 file an annual or quarterly report under subsection 

17 (a) shall disclose in that report, for each of its sub18 sidiaries and aggregated on a country-by-country 

19 basis— 

20 ‘‘(A) revenues generated from transactions 

21 with other constituent entities; 

22 ‘‘(B) revenues not generated from trans23 actions with other constituent entities; 

24 ‘‘(C) profit or loss before income tax; 


pbinns on DSKJLVW7X2PROD with BILLS
6 

•S 725 IS

1 ‘‘(D) total income tax paid on a cash basis 

2 to all tax jurisdictions, and any taxes withheld 

3 on payments received by the constituent enti4 ties; 

5 ‘‘(E) total accrued tax expense recorded on 

6 taxable profits or losses, reflecting only oper7 ations in the relevant annual period and exclud8 ing deferred taxes or provisions for uncertain 

9 tax liabilities; 

10 ‘‘(F) stated capital, except that the stated 

11 capital of a permanent establishment must be 

12 reported in the tax jurisdiction of residence of 

13 the legal entity of which it is a permanent es14 tablishment unless there is a defined capital re15 quirement in the permanent establishment tax 

16 jurisdiction for regulatory purposes; 

17 ‘‘(G) total accumulated earnings, except 

18 that accumulated earnings of a permanent es19 tablishment must be reported by the legal entity 

20 of which it is a permanent establishment; 

21 ‘‘(H) total number of employees on a full22 time equivalent basis; and 

23 ‘‘(I) net book value of tangible assets, 

24 which, for purposes of this section, does not inVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
7 

•S 725 IS

1 clude cash or cash equivalents, intangibles, or 

2 financial assets. 

3 ‘‘(3) AVAILABILITY OF INFORMATION.—The 

4 Commission shall make the information filed with 

5 the Commission pursuant to this subsection publicly 

6 available through the Commission website in a man7 ner that is searchable, sortable, and downloadable.’’. 

8 (b) EFFECTIVE DATE.—The amendment made by 

9 this section shall apply to disclosures made after the date 

10 of the enactment of this Act. 

11 SEC. 104. PENALTY FOR ELECTION TO PAY TAX ON DE12 FERRED FOREIGN INCOME IN INSTALL13 MENTS. 

14 (a) IN GENERAL.—Section 965(h) is amended by 

15 adding at the end the following new paragraph: 

16 ‘‘(7) PENALTY.—Interest on installments under 

17 this subsection shall be payable as determined under 

18 section 6601 by treating the last date prescribed for 

19 payment for any installment as the date for payment 

20 of the first installment under this subsection.’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 subsection (a) shall take effect as if included in section 

23 14103 of Public Law 115–97. 


pbinns on DSKJLVW7X2PROD with BILLS
8 

•S 725 IS

1 SEC. 105. MODIFICATIONS TO BASE EROSION AND ANTI2 ABUSE TAX. 

3 (a) REDUCTION OF EXEMPTION BASED ON ANNUAL

4 GROSS RECEIPTS.—Section 59A(e)(1)(B) is amended by 

5 striking ‘‘$500,000,000’’ and inserting ‘‘$100,000,000’’. 

6 (b) ELIMINATION OF EXCEPTION BASED ON BASE

7 EROSION PERCENTAGE.—Section 59(e)(1) is amended by 

8 inserting ‘‘and’’ at the end of subparagraph (A), by strik9 ing ‘‘, and’’ at the end of subparagraph (B) and inserting 

10 a period, and by striking subparagraph (C). 

11 (c) CERTAIN CAPITALIZED AMOUNTS INCLUDED AS

12 BASE EROSION PAYMENTS.—Section 59A(d) is amended 

13 by redesignating paragraphs (4) and (5) as paragraphs 

14 (5) and (6), respectively, and by inserting after paragraph 

15 (3) the following new paragraph: 

16 ‘‘(4) CERTAIN CAPITALIZED AMOUNTS.—Such 

17 term shall also include any interest, royalty, or any 

18 other amount identified by the Secretary that is paid 

19 or accrued by the taxpayer to a foreign person which 

20 is a related party of the taxpayer and with respect 

21 to which the taxpayer increases the value of property 

22 under section 1016 or any other provision of this 

23 title.’’. 

24 (d) EFFECTIVE DATE.—The amendments made by 

25 this section shall apply to taxable years beginning after 

26 the date of the enactment of this Act. 


pbinns on DSKJLVW7X2PROD with BILLS
9 

•S 725 IS

1 SEC. 106. TREATMENT OF FOREIGN BASE COMPANY OIL RE2 LATED INCOME AS SUBPART F INCOME. 

3 (a) IN GENERAL.—Section 954(a) is amended by 

4 striking ‘‘and’’ at the end of paragraph (2), by striking 

5 the period at the end of paragraph (3) and inserting ‘‘, 

6 and’’, and by adding at the end the following new para7 graph: 

8 ‘‘(4) the foreign base company oil related in9 come for the taxable year (determined under sub10 section (g) and reduced as provided in subsection 

11 (b)(5)).’’. 

12 (b) FOREIGN BASE COMPANY OIL RELATED IN13 COME.—Section 954 is amended by inserting after sub14 section (e) the following new subsection: 

15 ‘‘(g) FOREIGN BASE COMPANY OIL RELATED IN16 COME.—For purposes of this section, the term ‘foreign 

17 base company oil related income’ means foreign oil related 

18 income (within the meaning of paragraphs (2) and (3) of 

19 section 907(c)) other than income derived from a source 

20 within a foreign country in connection with— 

21 ‘‘(1) oil or gas which was extracted from an oil 

22 or gas well located in such foreign country, or 

23 ‘‘(2) oil, gas, or a primary product of oil or gas 

24 which is sold by the foreign corporation or a related 

25 person for use or consumption within such country 


pbinns on DSKJLVW7X2PROD with BILLS
10 

•S 725 IS

1 or is loaded in such country on a vessel or aircraft 

2 as fuel for such vessel or aircraft. 

3 Such term shall not include any foreign personal holding 

4 company income (as defined in subsection (c)).’’. 

5 (c) CONFORMING AMENDMENTS.— 

6 (1) Section 952(c)(1)(B)(iii) is amended by re7 designating subclauses (III) and (IV) as subclauses 

8 (IV) and (V), respectively, and by inserting after 

9 subclause (II) the following new subclause: 

10 ‘‘(III) foreign base company oil 

11 related income.’’. 

12 (2) Section 954(b) is amended— 

13 (A) by striking ‘‘and the foreign base com14 pany services income’’ in paragraph (5) and in15 serting ‘‘the foreign base company services in16 come, and the foreign base company oil related 

17 income’’, and 

18 (B) by adding at the end the following new 

19 paragraph: 

20 ‘‘(6) FOREIGN BASE COMPANY OIL RELATED IN21 COME NOT TREATED AS ANOTHER KIND OF BASE

22 COMPANY INCOME.—Income of a corporation which 

23 is foreign base company oil related income shall not 

24 be considered foreign base company income of such 


pbinns on DSKJLVW7X2PROD with BILLS
11 

•S 725 IS

1 corporation under paragraph (2) or (3) of subsection 

2 (a).’’. 

3 (d) EFFECTIVE DATE.—The amendments made by 

4 this section shall apply to taxable years of foreign corpora5 tions beginning after the date of the enactment of this 

6 Act, and to taxable years of United States shareholders 

7 in which or with which such taxable years of foreign cor8 porations end. 

9 SEC. 107. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

10 APPLICABLE TO DUAL CAPACITY TAXPAYERS. 

11 (a) IN GENERAL.—Section 901 of the Internal Rev12 enue Code of 1986 is amended by redesignating subsection 

13 (n) as subsection (o) and by inserting after subsection (m) 

14 the following new subsection: 

15 ‘‘(n) SPECIAL RULES RELATING TO DUAL CAPACITY

16 TAXPAYERS.— 

17 ‘‘(1) GENERAL RULE.—Notwithstanding any 

18 other provision of this chapter, any amount paid or 

19 accrued by a dual capacity taxpayer to a foreign 

20 country or possession of the United States for any 

21 period with respect to combined foreign oil and gas 

22 income (as defined in section 907(b)(1)) shall not be 

23 considered a tax to the extent such amount exceeds 

24 the amount (determined in accordance with regulaVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
12 

•S 725 IS

1 tions) which would have been required to be paid if 

2 the taxpayer were not a dual capacity taxpayer. 

3 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur4 poses of this subsection, the term ‘dual capacity tax5 payer’ means, with respect to any foreign country or 

6 possession of the United States, a person who— 

7 ‘‘(A) is subject to a levy of such country or 

8 possession, and 

9 ‘‘(B) receives (or will receive) directly or 

10 indirectly a specific economic benefit (as deter11 mined in accordance with regulations) from 

12 such country or possession.’’. 

13 (b) EFFECTIVE DATE.— 

14 (1) IN GENERAL.—The amendments made by 

15 this section shall apply to taxes paid or accrued in 

16 taxable years beginning after December 31, 2020. 

17 (2) CONTRARY TREATY OBLIGATIONS

18 UPHELD.—The amendments made by this section 

19 shall not apply to the extent contrary to any treaty 

20 obligation of the United States. 

21 SEC. 108. TREATMENT OF INTANGIBLES TRANSFERRED TO 

22 PARTNERSHIPS. 

23 (a) REPEAL OF CERTAIN REGULATORY AUTHOR24 ITY.—Section 367(d) is amended by striking paragraph 

25 (3). 


pbinns on DSKJLVW7X2PROD with BILLS
13 

•S 725 IS

1 (b) EXCEPTION TO RULES PROVIDING NONRECOGNI2 TION OF GAIN.—Section 721(d) is amended to read as fol3 lows: 

4 ‘‘(d) CERTAIN TRANSFERS OF INTANGIBLE PROP5 ERTY TO PARTNERSHIPS.— 

6 ‘‘(1) IN GENERAL.—Except as provided in regu7 lations prescribed by the Secretary, if a United 

8 States person transfers any intangible property with9 in the meaning of section 367(d)(4) to a specified 

10 partnership in an exchange described in this section, 

11 subsection (a) shall not apply to the transfer of such 

12 property and the provisions of section 367(d)(2) 

13 shall apply to such transfer. 

14 ‘‘(2) SPECIFIED PARTNERSHIP.—For purposes 

15 of this subsection, the term ‘specified partnership’ 

16 means any partnership if any item of income or gain 

17 attributable to intangible property is taken into ac18 count in determining any distributive share of such 

19 partnership to a person that is not a United States 

20 person.’’. 

21 (c) EFFECTIVE DATE.—The amendments made by 

22 this section shall apply to transfers after the date of the 

23 enactment of this Act, in taxable years ending after such 

24 date. 


pbinns on DSKJLVW7X2PROD with BILLS
14 

•S 725 IS

1 TITLE II—ADDITIONAL MEAS2 URES TO COMBAT TAX EVA3 SION 

4 SEC. 201. AUTHORIZING SPECIAL MEASURES AGAINST FOR5 EIGN JURISDICTIONS, FINANCIAL INSTITU6 TIONS, AND OTHERS THAT SIGNIFICANTLY 

7 IMPEDE UNITED STATES TAX ENFORCEMENT. 

8 (a) IN GENERAL.—Section 5318A of title 31, United 

9 States Code, is amended— 

10 (1) by striking the section heading and insert11 ing the following: ‘‘Special measures for juris12 dictions, financial institutions, or inter13 national transactions that are of primary 

14 money laundering concern or signifi15 cantly impede United States tax enforce16 ment’’; 

17 (2) in subsection (a), by striking the subsection 

18 heading and inserting the following: ‘‘SPECIAL

19 MEASURES TO COUNTER MONEY LAUNDERING AND

20 EFFORTS TO SIGNIFICANTLY IMPEDE UNITED

21 STATES TAX ENFORCEMENT’’; 

22 (3) in subsection (c)— 

23 (A) by striking the subsection heading and 

24 inserting the following: ‘‘CONSULTATIONS AND

25 INFORMATION TO BE CONSIDERED IN FINDING


pbinns on DSKJLVW7X2PROD with BILLS
15 

•S 725 IS

1 JURISDICTIONS, INSTITUTIONS, TYPES OF AC2 COUNTS, OR TRANSACTIONS TO BE OF PRI3 MARY MONEY LAUNDERING CONCERN OR TO

4 BE SIGNIFICANTLY IMPEDING UNITED STATES

5 TAX ENFORCEMENT’’; and 

6 (B) in paragraph (2), by adding at the end 

7 the following: 

8 ‘‘(C) OTHER CONSIDERATIONS.—The fact 

9 that a jurisdiction or financial institution is co10 operating with the United States on imple11 menting the requirements specified in chapter 4 

12 of the Internal Revenue Code of 1986 may be 

13 favorably considered in evaluating whether such 

14 jurisdiction or financial institution is signifi15 cantly impeding United States tax enforce16 ment.’’; 

17 (4) in subsection (a)(1), by inserting ‘‘or is sig18 nificantly impeding United States tax enforcement’’ 

19 after ‘‘primary money laundering concern’’; 

20 (5) in subsection (a)(4)— 

21 (A) in subparagraph (A)— 

22 (i) by inserting ‘‘in matters involving 

23 money laundering,’’ before ‘‘shall consult’’; 

24 and 

25 (ii) by striking ‘‘and’’ at the end; 


pbinns on DSKJLVW7X2PROD with BILLS
16 

•S 725 IS

1 (B) by redesignating subparagraph (B) as 

2 subparagraph (C); and 

3 (C) by inserting after subparagraph (A) 

4 the following: 

5 ‘‘(B) in matters involving United States 

6 tax enforcement, shall consult with the Commis7 sioner of Internal Revenue, the Secretary of 

8 State, the Attorney General of the United 

9 States, and in the sole discretion of the Sec10 retary, such other agencies and interested par11 ties as the Secretary may find to be appro12 priate; and’’; 

13 (6) in each of paragraphs (1)(A), (2), (3), and 

14 (4) of subsection (b), by inserting ‘‘or to be signifi15 cantly impeding United States tax enforcement’’ 

16 after ‘‘primary money laundering concern’’ each 

17 place that term appears; 

18 (7) in subsection (b), by striking paragraph (5) 

19 and inserting the following: 

20 ‘‘(5) PROHIBITIONS OR CONDITIONS ON OPEN21 ING OR MAINTAINING CERTAIN CORRESPONDENT OR

22 PAYABLE-THROUGH ACCOUNTS OR AUTHORIZING

23 CERTAIN PAYMENT CARDS.—If the Secretary finds a 

24 jurisdiction outside of the United States, 1 or more 

25 financial institutions operating outside of the United 


pbinns on DSKJLVW7X2PROD with BILLS
17 

•S 725 IS

1 States, or 1 or more classes of transactions within 

2 or involving a jurisdiction outside of the United 

3 States to be of primary money laundering concern or 

4 to be significantly impeding United States tax en5 forcement, the Secretary, in consultation with the 

6 Secretary of State, the Attorney General of the 

7 United States, and the Chairman of the Board of 

8 Governors of the Federal Reserve System, may pro9 hibit, or impose conditions upon— 

10 ‘‘(A) the opening or maintaining in the 

11 United States of a correspondent account or 

12 payable-through account by any domestic finan13 cial institution or domestic financial agency for 

14 or on behalf of a foreign banking institution, if 

15 such correspondent account or payable-through 

16 account involves any such jurisdiction or insti17 tution, or if any such transaction may be con18 ducted through such correspondent account or 

19 payable-through account; or 

20 ‘‘(B) the authorization, approval, or use in 

21 the United States of a credit card, charge card, 

22 debit card, or similar credit or debit financial 

23 instrument by any domestic financial institu24 tion, domestic financial agency, or credit card 

25 company or association for or on behalf of a 


pbinns on DSKJLVW7X2PROD with BILLS
18 

•S 725 IS

1 foreign banking institution, if such credit card, 

2 charge card, debit card, or similar credit or 

3 debit financial instrument involves any such ju4 risdiction or institution, or if any such trans5 action may be conducted through such credit 

6 card, charge card, debit card, or similar credit 

7 or debit financial instrument.’’; 

8 (8) in subsection (c)(1), by inserting ‘‘or is sig9 nificantly impeding United States tax enforcement’’ 

10 after ‘‘primary money laundering concern’’; 

11 (9) in subsection (c)(2)(A)— 

12 (A) in clause (ii), by striking ‘‘bank secrecy 

13 or special regulatory advantages’’ and inserting 

14 ‘‘bank, tax, corporate, trust, or financial secrecy 

15 or regulatory advantages’’; 

16 (B) in clause (iii), by striking ‘‘supervisory 

17 and counter-money’’ and inserting ‘‘supervisory, 

18 international tax enforcement, and counter19 money’’; 

20 (C) in clause (v), by striking ‘‘banking or 

21 secrecy’’ and inserting ‘‘banking, tax, or se22 crecy’’; and 

23 (D) in clause (vi), by inserting ‘‘, tax trea24 ty, or tax information exchange agreement’’ 

25 after ‘‘treaty’’; 


pbinns on DSKJLVW7X2PROD with BILLS
19 

•S 725 IS

1 (10) in subsection (c)(2)(B)— 

2 (A) in clause (i), by inserting ‘‘or tax eva3 sion’’ after ‘‘money laundering’’; and 

4 (B) in clause (iii), by inserting ‘‘, tax eva5 sion,’’ after ‘‘money laundering’’; and 

6 (11) in subsection (d), by inserting ‘‘involving 

7 money laundering, and shall notify, in writing, the 

8 Committee on Finance of the Senate and the Com9 mittee on Ways and Means of the House of Rep10 resentatives of any such action involving United 

11 States tax enforcement’’ after ‘‘such action’’. 

12 (b) CLERICAL AMENDMENT.—The table of contents 

13 for chapter 53 of title 31, United States Code, is amended 

14 by striking the item relating to section 5318A and insert15 ing 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.’’. 

16 SEC. 202. STRENGTHENING THE FOREIGN ACCOUNT TAX 

17 COMPLIANCE ACT (FATCA). 

18 (a) REPORTING ACTIVITIES WITH RESPECT TO PAS19 SIVE FOREIGN INVESTMENT COMPANIES.—Section 

20 1298(f) is amended by inserting ‘‘, or who directly or indi21 rectly forms, transfers assets to, is a beneficiary of, has 

22 a beneficial interest in, or receives money or property or 

23 the use thereof from,’’ after ‘‘shareholder of’’. 


pbinns on DSKJLVW7X2PROD with BILLS
20 

•S 725 IS

1 (b) WITHHOLDABLE PAYMENTS TO FOREIGN FINAN2 CIAL INSTITUTIONS.—Section 1471(d) is amended— 

3 (1) in paragraph (2)(A), by inserting ‘‘or trans4 action’’ after ‘‘any depository’’, and 

5 (2) in paragraph (5)(C), by striking ‘‘or any in6 terest’’ and all that follows and inserting ‘‘deriva7 tives, or any interest (including a futures or forward 

8 contract, swap, or option) in such securities, part9 nership interests, commodities, or derivatives.’’. 

10 (c) WITHHOLDABLE PAYMENTS TO OTHER FOREIGN

11 FINANCIAL INSTITUTIONS.—Section 1472 is amended— 

12 (1) by inserting ‘‘as a result of any customer 

13 identification, anti-money laundering, anti-corrup14 tion, or similar obligation to identify account hold15 ers,’’ after ‘‘reason to know,’’ in subsection (b)(2), 

16 and 

17 (2) by inserting ‘‘as posing a low risk of tax 

18 evasion’’ after ‘‘this subsection’’ in subsection 

19 (c)(1)(G). 

20 (d) DEFINITIONS.—Clauses (i) and (ii) of section 

21 1473(2)(A) are each amended by inserting ‘‘or as a bene22 ficial owner’’ after ‘‘indirectly’’. 

23 (e) SPECIAL RULES.—Section 1474(c) is amended— 

24 (1) by inserting ‘‘, except that information pro25 vided under section 1471(c) or 1472(b) may be disVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00020 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
21 

•S 725 IS

1 closed to any Federal law enforcement agency, upon 

2 request or upon the initiation of the Secretary, to in3 vestigate or address a possible violation of United 

4 States law’’ after ‘‘shall apply’’ in paragraph (1), 

5 and 

6 (2) by inserting ‘‘, or has had an agreement 

7 terminated under such section,’’ after ‘‘section 

8 1471(b)’’ in paragraph (2). 

9 (f) INFORMATION WITH RESPECT TO FOREIGN FI10 NANCIAL ASSETS.—Section 6038D(a) is amended by in11 serting ‘‘ownership or beneficial ownership’’ after ‘‘holds 

12 any’’. 

13 (g) ESTABLISHING PRESUMPTIONS FOR ENTITIES

14 AND TRANSACTIONS INVOLVING NON-FATCA INSTITU15 TIONS.— 

16 (1) PRESUMPTIONS FOR TAX PURPOSES.— 

17 (A) IN GENERAL.—Chapter 76 is amended 

18 by inserting after section 7491 the following 

19 new subchapter: 

20 ‘‘Subchapter F—Presumptions for Certain 

21 Legal Proceedings 

‘‘Sec. 7492. Presumptions pertaining to entities and transactions involving nonFATCA institutions. 


pbinns on DSKJLVW7X2PROD with BILLS
22 

•S 725 IS

1 ‘‘SEC. 7492. PRESUMPTIONS PERTAINING TO ENTITIES AND 

2 TRANSACTIONS INVOLVING NON-FATCA IN3 STITUTIONS. 

4 ‘‘(a) CONTROL.—For purposes of any United States 

5 civil judicial or administrative proceeding to determine or 

6 collect tax, there shall be a rebuttable presumption that 

7 a United States person who, directly or indirectly, formed, 

8 transferred assets to, was a beneficiary of, had a beneficial 

9 interest in, or received money or property or the use there10 of from an entity, including a trust, corporation, limited 

11 liability company, partnership, or foundation, that holds 

12 an account, or in any other manner has assets, in a non13 FATCA institution, exercised control over such entity. The 

14 presumption of control created by this subsection shall not 

15 be applied to prevent the Secretary from determining or 

16 arguing the absence of control. 

17 ‘‘(b) TRANSFERS OF INCOME.—For purposes of any 

18 United States civil judicial or administrative proceeding 

19 to determine or collect tax, there shall be a rebuttable pre20 sumption that any amount or thing of value received by 

21 a United States person directly or indirectly from an ac22 count or from an entity that holds an account, or in any 

23 other manner has assets, in a non-FATCA institution, 

24 constitutes income of such person taxable in the year of 

25 receipt; and any amount or thing of value paid or trans26 ferred by or on behalf of a United States person directly 


pbinns on DSKJLVW7X2PROD with BILLS
23 

•S 725 IS

1 or indirectly to an account, or entity that holds an ac2 count, or in any other manner has assets, in a non3 FATCA institution, represents previously unreported in4 come of such person taxable in the year of the transfer. 

5 ‘‘(c) REBUTTING THE PRESUMPTIONS.—The pre6 sumptions established in this section may be rebutted only 

7 by clear and convincing evidence, including detailed docu8 mentary, testimonial, and transactional evidence, estab9 lishing that— 

10 ‘‘(1) in subsection (a), such taxpayer exercised 

11 no control, directly or indirectly, over account or en12 tity at the time in question, and 

13 ‘‘(2) in subsection (b), such amounts or things 

14 of value did not represent income related to such 

15 United States person. 

16 Any court having jurisdiction of a civil proceeding in which 

17 control of such an offshore account or offshore entity or 

18 the income character of such receipts or amounts trans19 ferred is an issue shall prohibit the introduction by the 

20 taxpayer of any foreign based document that is not au21 thenticated in open court by a person with knowledge of 

22 such document, or any other evidence supplied by a person 

23 outside the jurisdiction of a United States court, unless 

24 such person appears before the court.’’. 


pbinns on DSKJLVW7X2PROD with BILLS
24 

•S 725 IS

1 (B) The table of subchapters for chapter 

2 76 is amended by inserting after the item relat3 ing to subchapter E the following new item: 

‘‘SUBCHAPTER F. PRESUMPTIONS FOR CERTAIN LEGAL PROCEEDINGS’’. 

4 (2) DEFINITION OF NON-FATCA INSTITUTION.— 

5 Section 7701(a) is amended by adding at the end 

6 the following new paragraph: 

7 ‘‘(51) NON-FATCA INSTITUTION.—The term 

8 ‘non-FATCA institution’ means any foreign financial 

9 institution that does not meet the reporting require10 ments of section 1471(b).’’. 

11 (3) PRESUMPTIONS FOR SECURITIES LAW PUR12 POSES.—Section 21 of the Securities Exchange Act 

13 of 1934 (15 U.S.C. 78u) is amended by adding at 

14 the end the following new subsection: 

15 ‘‘(j) PRESUMPTIONS PERTAINING TO CONTROL AND

16 BENEFICIAL OWNERSHIP.— 

17 ‘‘(1) CONTROL.—For purposes of any civil judi18 cial or administrative proceeding under this title, 

19 there shall be a rebuttable presumption that a 

20 United States person who, directly or indirectly, 

21 formed, transferred assets to, was a beneficiary of, 

22 had a beneficial interest in, or received money or 

23 property or the use thereof from an entity, including 

24 a trust, corporation, limited liability company, part25 nership, or foundation, that holds an account, or in 


pbinns on DSKJLVW7X2PROD with BILLS
25 

•S 725 IS

1 any other manner has assets, in a non-FATCA insti2 tution (as defined in section 7701(a)(51) of the In3 ternal Revenue Code of 1986), exercised control over 

4 such entity. The presumption of control created by 

5 this paragraph shall not be applied to prevent the 

6 Commission from determining or arguing the ab7 sence of control. 

8 ‘‘(2) BENEFICIAL OWNERSHIP.—For purposes 

9 of any civil judicial or administrative proceeding 

10 under this title, there shall be a rebuttable presump11 tion that securities that are nominally owned by an 

12 entity, including a trust, corporation, limited liability 

13 company, partnership, or foundation, and that are 

14 held in a non-FATCA institution (as so defined), are 

15 beneficially owned by any United States person who 

16 directly or indirectly exercised control over such enti17 ty. The presumption of beneficial ownership created 

18 by this paragraph shall not be applied to prevent the 

19 Commission from determining or arguing the ab20 sence of beneficial ownership.’’. 

21 (4) PRESUMPTION FOR REPORTING PURPOSES

22 RELATING TO FOREIGN FINANCIAL ACCOUNTS.—Sec23 tion 5314 of title 31, United States Code, is amend24 ed by adding at the end the following new sub25 section: 


pbinns on DSKJLVW7X2PROD with BILLS
26 

•S 725 IS

1 ‘‘(d) REBUTTABLE PRESUMPTION.—For purposes of 

2 this section, there shall be a rebuttable presumption that 

3 any account with a non-FATCA institution (as defined in 

4 section 7701(a)(51) of the Internal Revenue Code of 

5 1986) contains funds in an amount that is at least suffi6 cient to require a report prescribed by regulations under 

7 this section.’’. 

8 (5) REGULATORY AUTHORITY.—Not later than 

9 180 days after the date of enactment of this Act, the 

10 Secretary of the Treasury and the Chairman of the 

11 Securities and Exchange Commission shall each 

12 adopt regulations or other guidance necessary to im13 plement the amendments made by this subsection. 

14 The Secretary and the Chairman may, by regulation 

15 or guidance, provide that the presumption of control 

16 shall not extend to particular classes of transactions, 

17 such as corporate reorganizations or transactions 

18 below a specified dollar threshold, if either deter19 mines that applying such amendments to such trans20 actions is not necessary to carry out the purposes of 

21 such amendments. 

22 (h) EFFECTIVE DATE.—The amendments made by 

23 this section shall take effect on the date which is 180 days 

24 after the date of enactment of this Act, whether or not 

25 regulations are issued under subsection (g)(5). 


pbinns on DSKJLVW7X2PROD with BILLS
27 

•S 725 IS

1 SEC. 203. REPORTING UNITED STATES BENEFICIAL OWN2 ERS OF FOREIGN OWNED FINANCIAL AC3 COUNTS. 

4 (a) IN GENERAL.—Subpart B of part III of sub5 chapter A of chapter 61 is amended by inserting after sec6 tion 6045B the following new sections: 

7 ‘‘SEC. 6045C. RETURNS REGARDING UNITED STATES BENE8 FICIAL OWNERS OF FINANCIAL ACCOUNTS 

9 LOCATED IN THE UNITED STATES AND HELD 

10 IN THE NAME OF A FOREIGN ENTITY. 

11 ‘‘(a) REQUIREMENT OF RETURN.—If— 

12 ‘‘(1) any withholding agent under sections 1441 

13 and 1442 has the control, receipt, custody, disposal, 

14 or payment of any amount constituting gross income 

15 from sources within the United States of any foreign 

16 entity, including a trust, corporation, limited liability 

17 company, partnership, or foundation (other than an 

18 entity with shares regularly traded on an established 

19 securities market), and 

20 ‘‘(2) such withholding agent determines for pur21 poses of title 14, 18, or 31 of the United States 

22 Code that a United States person has any beneficial 

23 interest in the foreign entity or in the account in 

24 such entity’s name (hereafter in this section referred 

25 to as ‘United States beneficial owner’), 


pbinns on DSKJLVW7X2PROD with BILLS
28 

•S 725 IS

1 then the withholding agent shall make a return according 

2 to the forms or regulations prescribed by the Secretary. 

3 ‘‘(b) REQUIRED INFORMATION.—For purposes of 

4 subsection (a) the information required to be included on 

5 the return shall include— 

6 ‘‘(1) the name, address, and, if known, the tax7 payer identification number of the United States 

8 beneficial owner, 

9 ‘‘(2) the known facts pertaining to the relation10 ship of such United States beneficial owner to the 

11 foreign entity and the account, 

12 ‘‘(3) the gross amount of income from sources 

13 within the United States (including gross proceeds 

14 from brokerage transactions), and 

15 ‘‘(4) such other information as the Secretary 

16 may by forms or regulations provide. 

17 ‘‘(c) STATEMENTS TO BE FURNISHED TO BENE18 FICIAL OWNERS WITH RESPECT TO WHOM INFORMATION

19 IS REQUIRED TO BE REPORTED.—A withholding agent 

20 required to make a return under subsection (a) shall fur21 nish to each United States beneficial owner whose name 

22 is required to be set forth in such return a statement 

23 showing— 


pbinns on DSKJLVW7X2PROD with BILLS
29 

•S 725 IS

1 ‘‘(1) the name, address, and telephone number 

2 of the information contact of the person required to 

3 make such return, and 

4 ‘‘(2) the information required to be shown on 

5 such return with respect to such United States bene6 ficial owner. 

7 The written statement required under the preceding sen8 tence shall be furnished to the United States beneficial 

9 owner on or before January 31 of the year following the 

10 calendar year for which the return under subsection (a) 

11 was required to be made. In the event the person filing 

12 such return does not have a current address for the United 

13 States beneficial owner, such written statement may be 

14 mailed to the address of the foreign entity. 

15 ‘‘SEC. 6045D. RETURNS BY FINANCIAL INSTITUTIONS RE16 GARDING ESTABLISHMENT OF ACCOUNTS AT 

17 NON-FATCA INSTITUTIONS. 

18 ‘‘(a) REQUIREMENT OF RETURN.—Any financial in19 stitution directly or indirectly opening a bank, brokerage, 

20 or other financial account for or on behalf of an offshore 

21 entity, including a trust, corporation, limited liability com22 pany, partnership, or foundation (other than an entity 

23 with shares regularly traded on an established securities 

24 market), in a non-FATCA institution (as defined in sec25 tion 7701(a)(51)) at the direction of, on behalf of, or for 


pbinns on DSKJLVW7X2PROD with BILLS
30 

•S 725 IS

1 the benefit of a United States person shall make a return 

2 according to the forms or regulations prescribed by the 

3 Secretary. 

4 ‘‘(b) REQUIRED INFORMATION.—For purposes of 

5 subsection (a) the information required to be included on 

6 the return shall include— 

7 ‘‘(1) the name, address, and taxpayer identifica8 tion number of such United States person, 

9 ‘‘(2) the name and address of the financial in10 stitution at which a financial account is opened, the 

11 type of account, the account number, the name 

12 under which the account was opened, and the 

13 amount of the initial deposit, 

14 ‘‘(3) if the account is held in the name of an 

15 entity, the name and address of such entity, the type 

16 of entity, and the name and address of any company 

17 formation agent or other professional employed to 

18 form or acquire the entity, and 

19 ‘‘(4) such other information as the Secretary 

20 may by forms or regulations provide. 

21 ‘‘(c) STATEMENTS TO BE FURNISHED TO UNITED

22 STATES PERSONS WITH RESPECT TO WHOM INFORMA23 TION IS REQUIRED TO BE REPORTED.—A financial insti24 tution required to make a return under subsection (a) 

25 shall furnish to each United States person whose name 


pbinns on DSKJLVW7X2PROD with BILLS
31 

•S 725 IS

1 is required to be set forth in such return a statement 

2 showing— 

3 ‘‘(1) the name, address, and telephone number 

4 of the information contact of the person required to 

5 make such return, and 

6 ‘‘(2) the information required to be shown on 

7 such return with respect to such United States per8 son. 

9 The written statement required under the preceding sen10 tence shall be furnished to such United States person on 

11 or before January 31 of the year following the calendar 

12 year for which the return under subsection (a) was re13 quired to be made. 

14 ‘‘(d) EXEMPTION.—The Secretary may by regula15 tions exempt any class of United States persons or any 

16 class of accounts or entities from the requirements of this 

17 section if the Secretary determines that applying this sec18 tion to such persons, accounts, or entities is not necessary 

19 to carry out the purposes of this section.’’. 

20 (b) PENALTIES.— 

21 (1) RETURNS.—Section 6724(d)(1)(B) is 

22 amended by striking ‘‘or’’ at the end of clause (xxv), 

23 by striking ‘‘and’’ at the end of clause (xxvi), and 

24 by adding after clause (xxvi) the following new 

25 clauses: 


pbinns on DSKJLVW7X2PROD with BILLS
32 

•S 725 IS

1 ‘‘(xxvii) section 6045C(a) (relating to 

2 returns regarding United States beneficial 

3 owners of financial accounts located in the 

4 United States and held in the name of a 

5 foreign entity), or 

6 ‘‘(xxviii) section 6045D(a) (relating to 

7 returns by financial institutions regarding 

8 establishment of accounts at non-FATCA 

9 institutions), and’’. 

10 (2) PAYEE STATEMENTS.—Section 6724(d)(2) 

11 is amended by redesignating the second subpara12 graph (JJ) as (KK), by striking ‘‘or’’ at the end of 

13 subparagraph (JJ), by striking the period at the end 

14 of subparagraph (KK), and by inserting after sub15 paragraph (KK) the following new subparagraphs: 

16 ‘‘(LL) section 6045C(c) (relating to re17 turns regarding United States beneficial owners 

18 of financial accounts located in the United 

19 States and held in the name of a foreign enti20 ty), or 

21 ‘‘(MM) section 6045D(c) (relating to re22 turns by financial institutions regarding estab23 lishment of accounts at non-FATCA institu24 tions).’’. 


pbinns on DSKJLVW7X2PROD with BILLS
33 

•S 725 IS

1 (c) CLERICAL AMENDMENT.—The table of sections 

2 for subpart B of part III of subchapter A of chapter 61 

3 is amended by inserting after the item relating to section 

4 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.’’. 

5 (d) ADDITIONAL PENALTIES.— 

6 (1) ADDITIONAL PENALTIES ON BANKS.—Sec7 tion 5239(b)(1) of the Revised Statutes of the 

8 United States (12 U.S.C. 93(b)(1)) is amended by 

9 inserting ‘‘or any of the provisions of section 6045D 

10 of the Internal Revenue Code of 1986,’’ after ‘‘any 

11 regulation issued pursuant to,’’. 

12 (2) ADDITIONAL PENALTIES ON SECURITIES

13 FIRMS.—Section 21(d)(3)(A) of the Securities Ex14 change Act of 1934 (15 U.S.C. 78u(d)(3)(A)) is 

15 amended by inserting ‘‘any of the provisions of sec16 tion 6045D of the Internal Revenue Code of 1986,’’ 

17 after ‘‘the rules or regulations thereunder,’’. 

18 (e) REGULATORY AUTHORITY AND EFFECTIVE

19 DATE.— 

20 (1) REGULATORY AUTHORITY.—Not later than 

21 180 days after the date of the enactment of this Act, 

22 the Secretary of the Treasury shall adopt regulaVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
34 

•S 725 IS

1 tions, forms, or other guidance necessary to imple2 ment this section. 

3 (2) EFFECTIVE DATE.—Section 6045C of the 

4 Internal Revenue Code of 1986 (as added by this 

5 section) and the amendment made by subsection 

6 (d)(1) shall take effect with respect to amounts paid 

7 into foreign owned accounts located in the United 

8 States after December 31 of the year of the date of 

9 the enactment of this Act. Section 6045D of such 

10 Code (as so added) and the amendment made by 

11 subsection (d)(2) shall take effect with respect to ac12 counts opened after December 31 of the year of the 

13 date of the enactment of this Act. Section 6045D of 

14 such Code (as so added) and the amendment made 

15 by subsection (d)(2) shall take effect with respect to 

16 accounts opened after December 31 of the year of 

17 the date of the enactment of this Act, whether or 

18 not regulations are issued under Section 6045D. 

19 SEC. 204. PENALTY FOR FAILING TO DISCLOSE OFFSHORE 

20 HOLDINGS. 

21 (a) SECURITIES EXCHANGE ACT OF 1934.—Section 

22 21(d)(3)(B) of the Securities Exchange Act of 1934 (15 

23 U.S.C. 78u(d)(3)(B)) is amended by adding at the end 

24 the following: 


pbinns on DSKJLVW7X2PROD with BILLS
35 

•S 725 IS

1 ‘‘(iv) FOURTH TIER.—Notwith2 standing clauses (i), (ii), and (iii), for each 

3 such violation, the amount of penalty shall 

4 not exceed $1,000,000 for any natural per5 son or $10,000,000 for any other person, 

6 if— 

7 ‘‘(I) such person directly or indi8 rectly controlled any foreign entity, in9 cluding any trust, corporation, limited 

10 liability company, partnership, or 

11 foundation through which an issuer 

12 purchased, sold, or held equity or debt 

13 instruments; 

14 ‘‘(II) such person knowingly or 

15 recklessly failed to disclose any such 

16 holding, purchase, or sale by the 

17 issuer; and 

18 ‘‘(III) the holding, purchase, or 

19 sale would have been otherwise sub20 ject to disclosure by the issuer or such 

21 person under this title.’’. 

22 (b) SECURITIES ACT OF 1933.—Section 20(d)(2) of 

23 the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is 

24 amended by adding at the end the following: 


pbinns on DSKJLVW7X2PROD with BILLS
36 

•S 725 IS

1 ‘‘(D) FOURTH TIER.—Notwithstanding 

2 subparagraphs (A), (B), and (C), for each such 

3 violation, the amount of penalty shall not ex4 ceed $1,000,000 for any natural person or 

5 $10,000,000 for any other person, if— 

6 ‘‘(i) such person directly or indirectly 

7 controlled any foreign entity, including any 

8 trust, corporation, limited liability com9 pany, partnership, or foundation through 

10 which an issuer purchased, sold, or held 

11 equity or debt instruments; 

12 ‘‘(ii) such person knowingly or reck13 lessly failed to disclose any such holding, 

14 purchase, or sale by the issuer; and 

15 ‘‘(iii) the holding, purchase, or sale 

16 would have been otherwise subject to dis17 closure by the issuer or such person under 

18 this title.’’. 

19 (c) INVESTMENT ADVISERS ACT OF 1940.—Section 

20 203(i)(2) of the Investment Advisers Act of 1940 (15 

21 U.S.C. 80b–3(i)(2)) is amended by adding at the end the 

22 following: 

23 ‘‘(D) FOURTH TIER.—Notwithstanding 

24 subparagraphs (A), (B), and (C), for each such 

25 violation, the amount of penalty shall not exVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00036 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
37 

•S 725 IS

1 ceed $1,000,000 for any natural person or 

2 $10,000,000 for any other person, if— 

3 ‘‘(i) such person directly or indirectly 

4 controlled any foreign entity, including any 

5 trust, corporation, limited liability com6 pany, partnership, or foundation through 

7 which an issuer purchased, sold, or held 

8 equity or debt instruments; 

9 ‘‘(ii) such person knowingly or reck10 lessly failed to disclose any such holding, 

11 purchase, or sale by the issuer; and 

12 ‘‘(iii) the holding, purchase, or sale 

13 would have been otherwise subject to dis14 closure by the issuer or such person under 

15 this title.’’. 

16 SEC. 205. DEADLINE FOR ANTI-MONEY LAUNDERING RULE 

17 FOR INVESTMENT ADVISERS. 

18 (a) ANTI-MONEY LAUNDERING OBLIGATIONS FOR

19 INVESTMENT ADVISERS.—Section 5312(a)(2) of title 31, 

20 United States Code, is amended— 

21 (1) in subparagraph (Y), by striking ‘‘or’’ at 

22 the end; 

23 (2) by redesignating subparagraph (Z) as sub24 paragraph (BB); and 


pbinns on DSKJLVW7X2PROD with BILLS
38 

•S 725 IS

1 (3) by inserting after subparagraph (Y) the fol2 lowing: 

3 ‘‘(Z) an investment adviser (as defined in 

4 section 202(a) of the Investment Advisers Act 

5 of 1940);’’. 

6 (b) RULES REQUIRED.—The Secretary of the Treas7 ury shall— 

8 (1) in consultation with the Securities and Ex9 change Commission and the Commodity Futures 

10 Trading Commission, not later than 180 days after 

11 the date of enactment of this Act, publish a pro12 posed rule in the Federal Register to carry out the 

13 amendments made by this section; and 

14 (2) not later than 270 days after the date of 

15 enactment of this Act, publish a final rule in the 

16 Federal Register on the matter described in para17 graph (1). 

18 (c) CONTENTS.—The final rule published under this 

19 section shall require, at a minimum, each investment ad20 viser (as defined in section 202(a)(11) of the Investment 

21 Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11))) reg22 istered with the Securities and Exchange Commission pur23 suant to section 203 of that Act (15 U.S.C. 80b–3)— 

24 (1) to submit suspicious activity reports and es25 tablish an anti-money laundering program under 


pbinns on DSKJLVW7X2PROD with BILLS
39 

•S 725 IS

1 subsections (g) and (h), respectively, of section 5318 

2 of title 31, United States Code; and 

3 (2) to comply with— 

4 (A) the customer identification program 

5 requirements under section 5318(l) of title 31, 

6 United States Code; and 

7 (B) the due diligence requirements under 

8 section 5318(i) of title 31, United States Code. 

9 SEC. 206. ANTI-MONEY LAUNDERING REQUIREMENTS FOR 

10 FORMATION AGENTS. 

11 (a) ANTI-MONEY LAUNDERING OBLIGATIONS FOR

12 FORMATION AGENTS.—Section 5312(a)(2) of title 31, 

13 United States Code, as amended by section 205 of this 

14 Act, is amended by inserting after subparagraph (Z) the 

15 following: 

16 ‘‘(AA) any person engaged in the business 

17 of forming new corporations, limited liability 

18 companies, partnerships, trusts, or other legal 

19 entities; or’’. 

20 (b) DEADLINE FOR ANTI-MONEY LAUNDERING

21 RULE FOR FORMATION AGENTS.— 

22 (1) PROPOSED RULE.—The Secretary of the 

23 Treasury, in consultation with the Attorney General 

24 of the United States, the Secretary of Homeland SeVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00039 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
40 

•S 725 IS

1 curity, and the Commissioner of Internal Revenue, 

2 shall— 

3 (A) not later than 120 days after the date 

4 of enactment of this Act, publish a proposed 

5 rule in the Federal Register requiring persons 

6 described in section 5312(a)(2)(AA) of title 31, 

7 United States Code, as added by this section, to 

8 establish anti-money laundering programs 

9 under section 5318(h) of that title; and 

10 (B) not later than 270 days after the date 

11 of enactment of this Act, publish a final rule in 

12 the Federal Register on the matter described in 

13 subparagraph (A). 

14 (2) EXCLUSIONS.—The rule promulgated under 

15 this subsection shall exclude from the category of 

16 persons engaged in the business of forming new cor17 porations or other entities— 

18 (A) any government agency; and 

19 (B) any attorney or law firm that uses a 

20 paid formation agent operating within the 

21 United States to form such corporations or 

22 other entities. 


pbinns on DSKJLVW7X2PROD with BILLS
41 

•S 725 IS

1 SEC. 207. STRENGTHENING JOHN DOE SUMMONS PRO2 CEEDINGS. 

3 (a) IN GENERAL.—Subsection (f) of section 7609 is 

4 amended to read as follows: 

5 ‘‘(f) ADDITIONAL REQUIREMENT IN THE CASE OF A

6 JOHN DOE SUMMONS.— 

7 ‘‘(1) GENERAL RULE.—Any summons described 

8 in subsection (c)(1) which does not identify the per9 son with respect to whose liability the summons is 

10 issued may be served only after a court proceeding 

11 in which the Secretary establishes that— 

12 ‘‘(A) the summons relates to the investiga13 tion of a particular person or ascertainable 

14 group or class of persons, 

15 ‘‘(B) there is a reasonable basis for believ16 ing that such person or group or class of per17 sons may fail or may have failed to comply with 

18 any provision of any internal revenue law, and 

19 ‘‘(C) the information sought to be obtained 

20 from the examination of the records or testi21 mony (and the identity of the person or persons 

22 with respect to whose liability the summons is 

23 issued) is not readily available from other 

24 sources. 

25 ‘‘(2) EXCEPTION.—Paragraph (1) shall not 

26 apply to any summons which specifies that it is limVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00041 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
42 

•S 725 IS

1 ited to information regarding a United States cor2 respondent account (as defined in section 

3 5318A(e)(1)(B) of title 31, United States Code) or 

4 a United States payable-through account (as defined 

5 in section 5318A(e)(1)(C) of such title) of a finan6 cial institution that is held at a non-FATCA institu7 tion (as defined in section 7701(a)(51)). 

8 ‘‘(3) PRESUMPTION IN CASES INVOLVING NON9 FATCA INSTITUTIONS.—For purposes of this section, 

10 in any case in which the particular person or ascer11 tainable group or class of persons have financial ac12 counts in or transactions related to a non-FATCA 

13 institution (as defined in section 7701(a)(51)), there 

14 shall be a presumption that there is a reasonable 

15 basis for believing that such person or group or class 

16 of persons may fail or may have failed to comply 

17 with provisions of internal revenue law. 

18 ‘‘(4) PROJECT JOHN DOE SUMMONSES.— 

19 ‘‘(A) IN GENERAL.—Notwithstanding the 

20 requirements of paragraph (1), the Secretary 

21 may issue a summons described in paragraph 

22 (1) if the summons— 

23 ‘‘(i) relates to a project which is ap24 proved under subparagraph (B), 


pbinns on DSKJLVW7X2PROD with BILLS
43 

•S 725 IS

1 ‘‘(ii) is issued to a person who is a 

2 member of the group or class established 

3 under subparagraph (B)(i), and 

4 ‘‘(iii) is issued within 3 years of the 

5 date on which such project was approved 

6 under subparagraph (B). 

7 ‘‘(B) APPROVAL OF PROJECTS.—A project 

8 may only be approved under this subparagraph 

9 after a court proceeding in which the Secretary 

10 establishes that— 

11 ‘‘(i) any summons issued with respect 

12 to the project will be issued to a member 

13 of an ascertainable group or class of per14 sons, and 

15 ‘‘(ii) any summons issued with respect 

16 to such project will meet the requirements 

17 of paragraph (1). 

18 ‘‘(C) EXTENSION.—Upon application of 

19 the Secretary, the court may extend the time 

20 for issuing such summonses under subpara21 graph (A)(i) for additional 3-year periods, but 

22 only if the court continues to exercise oversight 

23 of such project under subparagraph (D). 

24 ‘‘(D) ONGOING COURT OVERSIGHT.—Dur25 ing any period in which the Secretary is authorVerDate Sep 11 2014 02:40 Apr 15, 2021 Jkt 019200 PO 00000 Frm 00043 Fmt 6652 Sfmt 6201 E:\BILLS\S725.IS S725

pbinns on DSKJLVW7X2PROD with BILLS
44 

•S 725 IS

1 ized to issue summonses in relation to a project 

2 approved under subparagraph (B) (including 

3 during any extension under subparagraph (C)), 

4 the Secretary shall report annually to the court 

5 on the use of such authority, provide copies of 

6 all summonses with such report, and comply 

7 with the court’s direction with respect to the 

8 issuance of any John Doe summons under such 

9 project.’’. 

10 (b) JURISDICTION OF COURT.— 

11 (1) IN GENERAL.—Paragraph (1) of section 

12 7609(h) is amended by inserting after the first sen13 tence the following new sentence: ‘‘Any United 

14 States district court in which a member of the group 

15 or class to which a summons may be issued resides 

16 or is found shall have jurisdiction to hear and deter17 mine the approval of a project under subsection 

18 (f)(4)(B).’’. 

19 (2) CONFORMING AMENDMENT.—The first sen20 tence of section 7609(h)(1) is amended by striking 

21 ‘‘(f)’’ and inserting ‘‘(f)(1)’’. 

22 (c) EFFECTIVE DATE.—The amendments made by 

23 this section shall apply to summonses issued after the date 

24 of the enactment of this Act. 


pbinns on DSKJLVW7X2PROD with BILLS
45 

•S 725 IS

1 SEC. 208. IMPROVING ENFORCEMENT OF FOREIGN FINAN2 CIAL ACCOUNT REPORTING. 

3 (a) CLARIFYING THE CONNECTION OF FOREIGN FI4 NANCIAL ACCOUNT REPORTING TO TAX ADMINISTRA5 TION.—Paragraph (4) of section 6103(b) is amended by 

6 adding at the end the following new sentence: 

7 ‘‘For purposes of subparagraph (A)(i), section 5314 

8 of title 31, United States Code, and sections 5321 

9 and 5322 of such title (as such sections pertain to 

10 such section 5314), shall be considered related stat11 utes.’’. 

12 (b) SIMPLIFYING THE CALCULATION OF FOREIGN

13 FINANCIAL ACCOUNT REPORTING PENALTIES.—Section 

14 5321(a)(5)(D)(ii) of title 31, United States Code, is 

15 amended by striking ‘‘the balance in the account at the 

16 time of the violation’’ and inserting ‘‘the highest balance 

17 in the account during the reporting period to which the 

18 violation relates’’. 

19 (c) CLARIFYING THE USE OF SUSPICIOUS ACTIVITY

20 REPORTS UNDER THE BANK SECRECY ACT FOR CIVIL

21 TAX LAW ENFORCEMENT.—Section 5319 of title 31, 

22 United States Code, is amended by inserting ‘‘the civil and 

23 criminal enforcement divisions of the Internal Revenue 

24 Service,’’ after ‘‘including’’. 

Æ 


pbinns on DSKJLVW7X2PROD with BILLS