I 

117TH CONGRESS 

1ST SESSION H. R. 1786 

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

IN THE HOUSE OF REPRESENTATIVES 

MARCH 11, 2021 

Mr. DOGGETT (for himself, Mr. BLUMENAUER, Mr. COHEN, Mr. DANNY K. 

DAVIS of Illinois, Mr. DEFAZIO, Ms. DELAURO, Mr. GARAMENDI, Mr. 

GRIJALVA, Ms. JAYAPAL, Ms. JOHNSON of Texas, Mr. JOHNSON of Georgia, Mr. MFUME, Mr. NADLER, Mr. RASKIN, Mr. SARBANES, Ms. SCHAKOWSKY, Mr. TONKO, Ms. WATERS, Mrs. WATSON COLEMAN, and Mr. 

CARTWRIGHT) introduced the following bill; which was referred to the 

Committee on Ways and Means, and in addition to the Committee on Financial Services, for a period to be subsequently determined by the 

Speaker, in each case for consideration of such provisions as fall within 

the jurisdiction of the committee concerned 

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 amendVerDate Sep 11 2014 19:48 May 03, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1786.IH H1786

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1 ment or repeal is expressed in terms of an amendment 

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

3 shall be considered to be made to a section or other provi4 sion of the Internal Revenue Code of 1986. 

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

6 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. 


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1 TITLE I—ENDING CORPORATE 

2 OFFSHORE TAX AVOIDANCE 

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

4 FOREIGN ENTITIES AND CFC LOOK-THRU 

5 RULES. 

6 (a) CHECK-THE-BOX RULES.—Paragraph (3) of sec7 tion 7701(a) is amended— 

8 (1) by striking ‘‘and’’, and 

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

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

11 that— 

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

13 limited liability, or 

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

15 which have limited liability’’. 

16 (b) LOOK-THRU RULE.—Subparagraph (C) of sec17 tion 954(c)(6) is amended to read as follows: 

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

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

20 royalties received or accrued after the date of 

21 the enactment of the Stop Tax Haven Abuse 

22 Act.’’. 

23 (c) EFFECTIVE DATE.— 


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

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

3 Act. 

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

5 shall apply to payments received after the date of 

6 the enactment of this Act. 

7 SEC. 102. SWAP PAYMENTS MADE FROM THE UNITED 

8 STATES TO PERSONS OFFSHORE. 

9 (a) TAX ON SWAP PAYMENTS RECEIVED BY FOR10 EIGN PERSONS.—Section 871(a)(1) is amended— 

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

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

13 subparagraph (A), and 

14 (2) by adding at the end the following new sen15 tence: ‘‘In the case of swap payments, the source of 

16 a swap payment is determined by reference to the lo17 cation of the payor.’’. 

18 (b) TAX ON SWAP PAYMENTS RECEIVED BY FOR19 EIGN CORPORATIONS.—Section 881(a) is amended— 

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

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

22 paragraph (1), and 

23 (2) by adding at the end the following new sen24 tence: ‘‘In the case of swap payments, the source of 


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1 a swap payment is determined by reference to the lo2 cation of the payor.’’. 

3 SEC. 103. REQUIREMENT TO DISCLOSE TOTAL CORPORATE 

4 TAXES PAID. 

5 (a) IN GENERAL.—Section 13 of the Securities Ex6 change Act of 1934 (15 U.S.C. 78m) is amended by add7 ing at the end the following new subsection: 

8 ‘‘(s) DISCLOSURE OF TOTAL CORPORATE TAXES

9 PAID.— 

10 ‘‘(1) ISSUER DISCLOSURE REQUIREMENT.— 

11 Each issuer required to file an annual or quarterly 

12 report under subsection (a) shall disclose in that re13 port— 

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

15 during the period covered by the report; 

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

17 in State taxes during the period covered by the 

18 report; 

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

20 Federal taxes during the period covered by the 

21 report; and 

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

23 in foreign taxes during the period covered by 

24 the report. 


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

2 REPORTING INFORMATION.—Each issuer required to 

3 file an annual or quarterly report under subsection 

4 (a) shall disclose in that report, for each of its sub5 sidiaries and aggregated on a country-by-country 

6 basis— 

7 ‘‘(A) revenues generated from transactions 

8 with other constituent entities; 

9 ‘‘(B) revenues not generated from trans10 actions with other constituent entities; 

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

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

13 to all tax jurisdictions, and any taxes withheld 

14 on payments received by the constituent enti15 ties; 

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

17 taxable profits or losses, reflecting only oper18 ations in the relevant annual period and exclud19 ing deferred taxes or provisions for uncertain 

20 tax liabilities; 

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

22 capital of a permanent establishment must be 

23 reported in the tax jurisdiction of residence of 

24 the legal entity of which it is a permanent es25 tablishment unless there is a defined capital reVerDate Sep 11 2014 19:48 May 03, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1786.IH H1786

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1 quirement in the permanent establishment tax 

2 jurisdiction for regulatory purposes; 

3 ‘‘(G) total accumulated earnings, except 

4 that accumulated earnings of a permanent es5 tablishment must be reported by the legal entity 

6 of which it is a permanent establishment; 

7 ‘‘(H) total number of employees on a full8 time equivalent basis; and 

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

10 which, for purposes of this section, does not in11 clude cash or cash equivalents, intangibles, or 

12 financial assets. 

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

14 Commission shall make the information filed with 

15 the Commission pursuant to this subsection publicly 

16 available through the Commission website in a man17 ner that is searchable, sortable, and downloadable.’’. 

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

19 this section shall apply to disclosures made after the date 

20 of the enactment of this Act. 

21 SEC. 104. PENALTY FOR ELECTION TO PAY TAX ON DE22 FERRED FOREIGN INCOME IN INSTALL23 MENTS. 

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

25 adding at the end the following new paragraph: 


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

2 this subsection shall be payable as determined under 

3 section 6601 by treating the last date prescribed for 

4 payment for any installment as the date for payment 

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

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

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

8 14103 of Public Law 115–97. 

9 SEC. 105. MODIFICATIONS TO BASE EROSION AND ANTI10 ABUSE TAX. 

11 (a) REDUCTION OF EXEMPTION BASED ON ANNUAL

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

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

14 (b) ELIMINATION OF EXCEPTION BASED ON BASE

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

16 inserting ‘‘and’’ at the end of subparagraph (A), by strik17 ing ‘‘, and’’ at the end of subparagraph (B) and inserting 

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

19 (c) CERTAIN CAPITALIZED AMOUNTS INCLUDED AS

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

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

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

23 (3) the following new paragraph: 

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

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


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1 other amount identified by the Secretary that is paid 

2 or accrued by the taxpayer to a foreign person which 

3 is a related party of the taxpayer and with respect 

4 to which the taxpayer increases the value of property 

5 under section 1016 or any other provision of this 

6 title.’’. 

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

8 this section shall apply to taxable years beginning after 

9 the date of the enactment of this Act. 

10 SEC. 106. TREATMENT OF FOREIGN BASE COMPANY OIL RE11 LATED INCOME AS SUBPART F INCOME. 

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

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

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

15 and’’, and by adding at the end the following new para16 graph: 

17 ‘‘(4) the foreign base company oil related in18 come for the taxable year (determined under sub19 section (g) and reduced as provided in subsection 

20 (b)(5)).’’. 

21 (b) FOREIGN BASE COMPANY OIL RELATED IN22 COME.—Section 954 is amended by inserting after sub23 section (e) the following new subsection: 

24 ‘‘(g) FOREIGN BASE COMPANY OIL RELATED IN25 COME.—For purposes of this section, the term ‘foreign 


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1 base company oil related income’ means foreign oil related 

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

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

4 within a foreign country in connection with— 

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

6 or gas well located in such foreign country, or 

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

8 which is sold by the foreign corporation or a related 

9 person for use or consumption within such country 

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

11 as fuel for such vessel or aircraft. 

12 Such term shall not include any foreign personal holding 

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

14 (c) CONFORMING AMENDMENTS.— 

15 (1) Section 952(c)(1)(B)(iii) is amended by re16 designating subclauses (III) and (IV) as subclauses 

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

18 subclause (II) the following new subclause: 

19 ‘‘(III) foreign base company oil 

20 related income.’’. 

21 (2) Section 954(b) is amended— 

22 (A) by striking ‘‘and the foreign base com23 pany services income’’ in paragraph (5) and in24 serting ‘‘the foreign base company services inVerDate Sep 11 2014 19:48 May 03, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1786.IH H1786

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1 come, and the foreign base company oil related 

2 income’’, and 

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

4 paragraph: 

5 ‘‘(6) FOREIGN BASE COMPANY OIL RELATED IN6 COME NOT TREATED AS ANOTHER KIND OF BASE

7 COMPANY INCOME.—Income of a corporation which 

8 is foreign base company oil related income shall not 

9 be considered foreign base company income of such 

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

11 (a).’’. 

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

13 this section shall apply to taxable years of foreign corpora14 tions beginning after the date of the enactment of this 

15 Act, and to taxable years of United States shareholders 

16 in which or with which such taxable years of foreign cor17 porations end. 

18 SEC. 107. MODIFICATIONS OF FOREIGN TAX CREDIT RULES 

19 APPLICABLE TO DUAL CAPACITY TAXPAYERS. 

20 (a) IN GENERAL.—Section 901 of the Internal Rev21 enue Code of 1986 is amended by redesignating subsection 

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

23 the following new subsection: 

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

25 TAXPAYERS.— 


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

2 other provision of this chapter, any amount paid or 

3 accrued by a dual capacity taxpayer to a foreign 

4 country or possession of the United States for any 

5 period with respect to combined foreign oil and gas 

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

7 considered a tax to the extent such amount exceeds 

8 the amount (determined in accordance with regula9 tions) which would have been required to be paid if 

10 the taxpayer were not a dual capacity taxpayer. 

11 ‘‘(2) DUAL CAPACITY TAXPAYER.—For pur12 poses of this subsection, the term ‘dual capacity tax13 payer’ means, with respect to any foreign country or 

14 possession of the United States, a person who— 

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

16 possession, and 

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

18 indirectly a specific economic benefit (as deter19 mined in accordance with regulations) from 

20 such country or possession.’’. 

21 (b) EFFECTIVE DATE.— 

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

23 this section shall apply to taxes paid or accrued in 

24 taxable years beginning after December 31, 2020. 


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1 (2) CONTRARY TREATY OBLIGATIONS

2 UPHELD.—The amendments made by this section 

3 shall not apply to the extent contrary to any treaty 

4 obligation of the United States. 

5 SEC. 108. TREATMENT OF INTANGIBLES TRANSFERRED TO 

6 PARTNERSHIPS. 

7 (a) REPEAL OF CERTAIN REGULATORY AUTHOR8 ITY.—Section 367(d) is amended by striking paragraph 

9 (3). 

10 (b) EXCEPTION TO RULES PROVIDING NONRECOGNI11 TION OF GAIN.—Section 721(d) is amended to read as fol12 lows: 

13 ‘‘(d) CERTAIN TRANSFERS OF INTANGIBLE PROP14 ERTY TO PARTNERSHIPS.— 

15 ‘‘(1) IN GENERAL.—Except as provided in regu16 lations prescribed by the Secretary, if a United 

17 States person transfers any intangible property with18 in the meaning of section 367(d)(4) to a specified 

19 partnership in an exchange described in this section, 

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

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

22 shall apply to such transfer. 

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

24 of this subsection, the term ‘specified partnership’ 

25 means any partnership if any item of income or gain 


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1 attributable to intangible property is taken into ac2 count in determining any distributive share of such 

3 partnership to a person that is not a United States 

4 person.’’. 

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

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

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

8 date. 

9 TITLE II—ADDITIONAL MEAS10 URES TO COMBAT TAX EVA11 SION 

12 SEC. 201. AUTHORIZING SPECIAL MEASURES AGAINST FOR13 EIGN JURISDICTIONS, FINANCIAL INSTITU14 TIONS, AND OTHERS THAT SIGNIFICANTLY 

15 IMPEDE UNITED STATES TAX ENFORCEMENT. 

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

17 States Code, is amended— 

18 (1) by striking the section heading and insert19 ing the following: ‘‘Special measures for juris20 dictions, financial institutions, or inter21 national transactions that are of primary 

22 money laundering concern or signifi23 cantly impede United States tax enforce24 ment’’; 


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

2 heading and inserting the following: ‘‘SPECIAL

3 MEASURES TO COUNTER MONEY LAUNDERING AND

4 EFFORTS TO SIGNIFICANTLY IMPEDE UNITED

5 STATES TAX ENFORCEMENT’’; 

6 (3) in subsection (c)— 

7 (A) by striking the subsection heading and 

8 inserting the following: ‘‘CONSULTATIONS AND

9 INFORMATION TO BE CONSIDERED IN FINDING

10 JURISDICTIONS, INSTITUTIONS, TYPES OF AC11 COUNTS, OR TRANSACTIONS TO BE OF PRI12 MARY MONEY LAUNDERING CONCERN OR TO

13 BE SIGNIFICANTLY IMPEDING UNITED STATES

14 TAX ENFORCEMENT’’; and 

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

16 the following: 

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

18 that a jurisdiction or financial institution is co19 operating with the United States on imple20 menting the requirements specified in chapter 4 

21 of the Internal Revenue Code of 1986 may be 

22 favorably considered in evaluating whether such 

23 jurisdiction or financial institution is signifi24 cantly impeding United States tax enforce25 ment.’’; 


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1 (4) in subsection (a)(1), by inserting ‘‘or is sig2 nificantly impeding United States tax enforcement’’ 

3 after ‘‘primary money laundering concern’’; 

4 (5) in subsection (a)(4)— 

5 (A) in subparagraph (A)— 

6 (i) by inserting ‘‘in matters involving 

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

8 and 

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

10 (B) by redesignating subparagraph (B) as 

11 subparagraph (C); and 

12 (C) by inserting after subparagraph (A) 

13 the following: 

14 ‘‘(B) in matters involving United States 

15 tax enforcement, shall consult with the Commis16 sioner of Internal Revenue, the Secretary of 

17 State, the Attorney General of the United 

18 States, and in the sole discretion of the Sec19 retary, such other agencies and interested par20 ties as the Secretary may find to be appro21 priate; and’’; 

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

23 (4) of subsection (b), by inserting ‘‘or to be signifi24 cantly impeding United States tax enforcement’’ 


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1 after ‘‘primary money laundering concern’’ each 

2 place that term appears; 

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

4 and inserting the following: 

5 ‘‘(5) PROHIBITIONS OR CONDITIONS ON OPEN6 ING OR MAINTAINING CERTAIN CORRESPONDENT OR

7 PAYABLE-THROUGH ACCOUNTS OR AUTHORIZING

8 CERTAIN PAYMENT CARDS.—If the Secretary finds a 

9 jurisdiction outside of the United States, 1 or more 

10 financial institutions operating outside of the United 

11 States, or 1 or more classes of transactions within 

12 or involving a jurisdiction outside of the United 

13 States to be of primary money laundering concern or 

14 to be significantly impeding United States tax en15 forcement, the Secretary, in consultation with the 

16 Secretary of State, the Attorney General of the 

17 United States, and the Chairman of the Board of 

18 Governors of the Federal Reserve System, may pro19 hibit, or impose conditions upon— 

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

21 United States of a correspondent account or 

22 payable-through account by any domestic finan23 cial institution or domestic financial agency for 

24 or on behalf of a foreign banking institution, if 

25 such correspondent account or payable-through 


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1 account involves any such jurisdiction or insti2 tution, or if any such transaction may be con3 ducted through such correspondent account or 

4 payable-through account; or 

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

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

7 debit card, or similar credit or debit financial 

8 instrument by any domestic financial institu9 tion, domestic financial agency, or credit card 

10 company or association for or on behalf of a 

11 foreign banking institution, if such credit card, 

12 charge card, debit card, or similar credit or 

13 debit financial instrument involves any such ju14 risdiction or institution, or if any such trans15 action may be conducted through such credit 

16 card, charge card, debit card, or similar credit 

17 or debit financial instrument.’’; 

18 (8) in subsection (c)(1), by inserting ‘‘or is sig19 nificantly impeding United States tax enforcement’’ 

20 after ‘‘primary money laundering concern’’; 

21 (9) in subsection (c)(2)(A)— 

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

23 or special regulatory advantages’’ and inserting 

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

25 or regulatory advantages’’; 


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

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

3 international tax enforcement, and counter4 money’’; 

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

6 secrecy’’ and inserting ‘‘banking, tax, or se7 crecy’’; and 

8 (D) in clause (vi), by inserting ‘‘, tax trea9 ty, or tax information exchange agreement’’ 

10 after ‘‘treaty’’; 

11 (10) in subsection (c)(2)(B)— 

12 (A) in clause (i), by inserting ‘‘or tax eva13 sion’’ after ‘‘money laundering’’; and 

14 (B) in clause (iii), by inserting ‘‘, tax eva15 sion,’’ after ‘‘money laundering’’; and 

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

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

18 Committee on Finance of the Senate and the Com19 mittee on Ways and Means of the House of Rep20 resentatives of any such action involving United 

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

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

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

24 by striking the item relating to section 5318A and insert25 ing the following: 


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‘‘5318A. Special measures for jurisdictions, financial institutions, or international transactions that are of primary money laundering 

concern or significantly impede United States tax enforcement.’’. 

1 SEC. 202. STRENGTHENING THE FOREIGN ACCOUNT TAX 

2 COMPLIANCE ACT (FATCA). 

3 (a) REPORTING ACTIVITIES WITH RESPECT TO PAS4 SIVE FOREIGN INVESTMENT COMPANIES.—Section 

5 1298(f) is amended by inserting ‘‘, or who directly or indi6 rectly forms, transfers assets to, is a beneficiary of, has 

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

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

9 (b) WITHHOLDABLE PAYMENTS TO FOREIGN FINAN10 CIAL INSTITUTIONS.—Section 1471(d) is amended— 

11 (1) in paragraph (2)(A), by inserting ‘‘or trans12 action’’ after ‘‘any depository’’, and 

13 (2) in paragraph (5)(C), by striking ‘‘or any in14 terest’’ and all that follows and inserting ‘‘deriva15 tives, or any interest (including a futures or forward 

16 contract, swap, or option) in such securities, part17 nership interests, commodities, or derivatives.’’. 

18 (c) WITHHOLDABLE PAYMENTS TO OTHER FOREIGN

19 FINANCIAL INSTITUTIONS.—Section 1472 is amended— 

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

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1 ers,’’ after ‘‘reason to know,’’ in subsection (b)(2), 

2 and 

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

4 evasion’’ after ‘‘this subsection’’ in subsection 

5 (c)(1)(G). 

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

7 1473(2)(A) are each amended by inserting ‘‘or as a bene8 ficial owner’’ after ‘‘indirectly’’. 

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

10 (1) by inserting ‘‘, except that information pro11 vided under section 1471(c) or 1472(b) may be dis12 closed to any Federal law enforcement agency, upon 

13 request or upon the initiation of the Secretary, to in14 vestigate or address a possible violation of United 

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

16 and 

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

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

19 1471(b)’’ in paragraph (2). 

20 (f) INFORMATION WITH RESPECT TO FOREIGN FI21 NANCIAL ASSETS.—Section 6038D(a) is amended by in22 serting ‘‘ownership or beneficial ownership’’ after ‘‘holds 

23 any’’. 


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1 (g) ESTABLISHING PRESUMPTIONS FOR ENTITIES

2 AND TRANSACTIONS INVOLVING NON-FATCA INSTITU3 TIONS.— 

4 (1) PRESUMPTIONS FOR TAX PURPOSES.— 

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

6 by inserting after section 7491 the following 

7 new subchapter: 

8 ‘‘Subchapter F—Presumptions for Certain 

9 Legal Proceedings 

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

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

11 TRANSACTIONS INVOLVING NON-FATCA IN12 STITUTIONS. 

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

14 civil judicial or administrative proceeding to determine or 

15 collect tax, there shall be a rebuttable presumption that 

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

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

18 interest in, or received money or property or the use there19 of from an entity, including a trust, corporation, limited 

20 liability company, partnership, or foundation, that holds 

21 an account, or in any other manner has assets, in a non22 FATCA institution, exercised control over such entity. The 

23 presumption of control created by this subsection shall not 


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1 be applied to prevent the Secretary from determining or 

2 arguing the absence of control. 

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

4 United States civil judicial or administrative proceeding 

5 to determine or collect tax, there shall be a rebuttable pre6 sumption that any amount or thing of value received by 

7 a United States person directly or indirectly from an ac8 count or from an entity that holds an account, or in any 

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

10 constitutes income of such person taxable in the year of 

11 receipt; and any amount or thing of value paid or trans12 ferred by or on behalf of a United States person directly 

13 or indirectly to an account, or entity that holds an ac14 count, or in any other manner has assets, in a non15 FATCA institution, represents previously unreported in16 come of such person taxable in the year of the transfer. 

17 ‘‘(c) REBUTTING THE PRESUMPTIONS.—The pre18 sumptions established in this section may be rebutted only 

19 by clear and convincing evidence, including detailed docu20 mentary, testimonial, and transactional evidence, estab21 lishing that— 

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

23 no control, directly or indirectly, over account or en24 tity at the time in question, and 


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

2 of value did not represent income related to such 

3 United States person. 

4 Any court having jurisdiction of a civil proceeding in which 

5 control of such an offshore account or offshore entity or 

6 the income character of such receipts or amounts trans7 ferred is an issue shall prohibit the introduction by the 

8 taxpayer of any foreign based document that is not au9 thenticated in open court by a person with knowledge of 

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

11 outside the jurisdiction of a United States court, unless 

12 such person appears before the court.’’. 

13 (B) The table of subchapters for chapter 

14 76 is amended by inserting after the item relat15 ing to subchapter E the following new item: 

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

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

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

18 the following new paragraph: 

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

20 ‘non-FATCA institution’ means any foreign financial 

21 institution that does not meet the reporting require22 ments of section 1471(b).’’. 

23 (3) PRESUMPTIONS FOR SECURITIES LAW PUR24 POSES.—Section 21 of the Securities Exchange Act 


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

2 the end the following new subsection: 

3 ‘‘(j) PRESUMPTIONS PERTAINING TO CONTROL AND

4 BENEFICIAL OWNERSHIP.— 

5 ‘‘(1) CONTROL.—For purposes of any civil judi6 cial or administrative proceeding under this title, 

7 there shall be a rebuttable presumption that a 

8 United States person who, directly or indirectly, 

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

10 had a beneficial interest in, or received money or 

11 property or the use thereof from an entity, including 

12 a trust, corporation, limited liability company, part13 nership, or foundation, that holds an account, or in 

14 any other manner has assets, in a non-FATCA insti15 tution (as defined in section 7701(a)(51) of the In16 ternal Revenue Code of 1986), exercised control over 

17 such entity. The presumption of control created by 

18 this paragraph shall not be applied to prevent the 

19 Commission from determining or arguing the ab20 sence of control. 

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

22 of any civil judicial or administrative proceeding 

23 under this title, there shall be a rebuttable presump24 tion that securities that are nominally owned by an 

25 entity, including a trust, corporation, limited liability 


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1 company, partnership, or foundation, and that are 

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

3 beneficially owned by any United States person who 

4 directly or indirectly exercised control over such enti5 ty. The presumption of beneficial ownership created 

6 by this paragraph shall not be applied to prevent the 

7 Commission from determining or arguing the ab8 sence of beneficial ownership.’’. 

9 (4) PRESUMPTION FOR REPORTING PURPOSES

10 RELATING TO FOREIGN FINANCIAL ACCOUNTS.—Sec11 tion 5314 of title 31, United States Code, is amend12 ed by adding at the end the following new sub13 section: 

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

15 this section, there shall be a rebuttable presumption that 

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

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

18 1986) contains funds in an amount that is at least suffi19 cient to require a report prescribed by regulations under 

20 this section.’’. 

21 (5) REGULATORY AUTHORITY.—Not later than 

22 180 days after the date of enactment of this Act, the 

23 Secretary of the Treasury and the Chairman of the 

24 Securities and Exchange Commission shall each 

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1 plement the amendments made by this subsection. 

2 The Secretary and the Chairman may, by regulation 

3 or guidance, provide that the presumption of control 

4 shall not extend to particular classes of transactions, 

5 such as corporate reorganizations or transactions 

6 below a specified dollar threshold, if either deter7 mines that applying such amendments to such trans8 actions is not necessary to carry out the purposes of 

9 such amendments. 

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

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

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

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

14 SEC. 203. REPORTING UNITED STATES BENEFICIAL OWN15 ERS OF FOREIGN OWNED FINANCIAL AC16 COUNTS. 

17 (a) IN GENERAL.—Subpart B of part III of sub18 chapter A of chapter 61 is amended by inserting after sec19 tion 6045B the following new sections: 

20 ‘‘SEC. 6045C. RETURNS REGARDING UNITED STATES BENE21 FICIAL OWNERS OF FINANCIAL ACCOUNTS 

22 LOCATED IN THE UNITED STATES AND HELD 

23 IN THE NAME OF A FOREIGN ENTITY. 

24 ‘‘(a) REQUIREMENT OF RETURN.—If— 


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

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

3 or payment of any amount constituting gross income 

4 from sources within the United States of any foreign 

5 entity, including a trust, corporation, limited liability 

6 company, partnership, or foundation (other than an 

7 entity with shares regularly traded on an established 

8 securities market), and 

9 ‘‘(2) such withholding agent determines for pur10 poses of title 14, 18, or 31 of the United States 

11 Code that a United States person has any beneficial 

12 interest in the foreign entity or in the account in 

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

14 to as ‘United States beneficial owner’), 

15 then the withholding agent shall make a return according 

16 to the forms or regulations prescribed by the Secretary. 

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

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

19 the return shall include— 

20 ‘‘(1) the name, address, and, if known, the tax21 payer identification number of the United States 

22 beneficial owner, 

23 ‘‘(2) the known facts pertaining to the relation24 ship of such United States beneficial owner to the 

25 foreign entity and the account, 


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

2 within the United States (including gross proceeds 

3 from brokerage transactions), and 

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

5 may by forms or regulations provide. 

6 ‘‘(c) STATEMENTS TO BE FURNISHED TO BENE7 FICIAL OWNERS WITH RESPECT TO WHOM INFORMATION

8 IS REQUIRED TO BE REPORTED.—A withholding agent 

9 required to make a return under subsection (a) shall fur10 nish to each United States beneficial owner whose name 

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

12 showing— 

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

14 of the information contact of the person required to 

15 make such return, and 

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

17 such return with respect to such United States bene18 ficial owner. 

19 The written statement required under the preceding sen20 tence shall be furnished to the United States beneficial 

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

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

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

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


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1 States beneficial owner, such written statement may be 

2 mailed to the address of the foreign entity. 

3 ‘‘SEC. 6045D. RETURNS BY FINANCIAL INSTITUTIONS RE4 GARDING ESTABLISHMENT OF ACCOUNTS IN 

5 NON-FATCA INSTITUTIONS. 

6 ‘‘(a) REQUIREMENT OF RETURN.—Any financial in7 stitution directly or indirectly opening a bank, brokerage, 

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

9 entity, including a trust, corporation, limited liability com10 pany, partnership, or foundation (other than an entity 

11 with shares regularly traded on an established securities 

12 market), in a non-FATCA institution (as defined in sec13 tion 7701(a)(51)) at the direction of, on behalf of, or for 

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

15 according to the forms or regulations prescribed by the 

16 Secretary. 

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

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

19 the return shall include— 

20 ‘‘(1) the name, address, and taxpayer identifica21 tion number of such United States person, 

22 ‘‘(2) the name and address of the financial in23 stitution at which a financial account is opened, the 

24 type of account, the account number, the name 


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1 under which the account was opened, and the 

2 amount of the initial deposit, 

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

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

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

6 formation agent or other professional employed to 

7 form or acquire the entity, and 

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

9 may by forms or regulations provide. 

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

11 STATES PERSONS WITH RESPECT TO WHOM INFORMA12 TION IS REQUIRED TO BE REPORTED.—A financial insti13 tution required to make a return under subsection (a) 

14 shall furnish to each United States person whose name 

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

16 showing— 

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

18 of the information contact of the person required to 

19 make such return, and 

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

21 such return with respect to such United States per22 son. 

23 The written statement required under the preceding sen24 tence shall be furnished to such United States person on 

25 or before January 31 of the year following the calendar 


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1 year for which the return under subsection (a) was re2 quired to be made. 

3 ‘‘(d) EXEMPTION.—The Secretary may by regula4 tions exempt any class of United States persons or any 

5 class of accounts or entities from the requirements of this 

6 section if the Secretary determines that applying this sec7 tion to such persons, accounts, or entities is not necessary 

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

9 (b) PENALTIES.— 

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

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

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

13 by adding after clause (xxvi) the following new 

14 clauses: 

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

16 returns regarding United States beneficial 

17 owners of financial accounts located in the 

18 United States and held in the name of a 

19 foreign entity), or 

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

21 returns by financial institutions regarding 

22 establishment of accounts at non-FATCA 

23 institutions), and’’. 

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

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1 graph (JJ) as (KK), by striking ‘‘or’’ at the end of 

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

3 of subparagraph (KK), and by inserting after sub4 paragraph (KK) the following new subparagraphs: 

5 ‘‘(LL) section 6045C(c) (relating to re6 turns regarding United States beneficial owners 

7 of financial accounts located in the United 

8 States and held in the name of a foreign enti9 ty), or 

10 ‘‘(MM) section 6045D(c) (relating to re11 turns by financial institutions regarding estab12 lishment of accounts at non-FATCA institu13 tions).’’. 

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

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

16 is amended by inserting after the item relating to section 

17 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.’’. 

18 (d) ADDITIONAL PENALTIES.— 

19 (1) ADDITIONAL PENALTIES ON BANKS.—Sec20 tion 5239(b)(1) of the Revised Statutes of the 

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

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


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

2 regulation issued pursuant to,’’. 

3 (2) ADDITIONAL PENALTIES ON SECURITIES

4 FIRMS.—Section 21(d)(3)(A) of the Securities Ex5 change Act of 1934 (15 U.S.C. 78u(d)(3)(A)) is 

6 amended by inserting ‘‘any of the provisions of sec7 tion 6045D of the Internal Revenue Code of 1986,’’ 

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

9 (e) REGULATORY AUTHORITY AND EFFECTIVE

10 DATE.— 

11 (1) REGULATORY AUTHORITY.—Not later than 

12 180 days after the date of the enactment of this Act, 

13 the Secretary of the Treasury shall adopt regula14 tions, forms, or other guidance necessary to imple15 ment this section. 

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

17 Internal Revenue Code of 1986 (as added by this 

18 section) and the amendment made by subsection 

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

20 into foreign owned accounts located in the United 

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

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

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

24 subsection (d)(2) shall take effect with respect to ac25 counts opened after December 31 of the year of the 


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

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

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

4 accounts opened after December 31 of the year of 

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

6 not regulations are issued under Section 6045D. 

7 SEC. 204. PENALTY FOR FAILING TO DISCLOSE OFFSHORE 

8 HOLDINGS. 

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

10 21(d)(3)(B) of the Securities Exchange Act of 1934 (15 

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

12 the following: 

13 ‘‘(iv) FOURTH TIER.—Notwith14 standing clauses (i), (ii), and (iii), for each 

15 such violation, the amount of penalty shall 

16 not exceed $1,000,000 for any natural per17 son or $10,000,000 for any other person, 

18 if— 

19 ‘‘(I) such person directly or indi20 rectly controlled any foreign entity, in21 cluding any trust, corporation, limited 

22 liability company, partnership, or 

23 foundation through which an issuer 

24 purchased, sold, or held equity or debt 

25 instruments; 


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1 ‘‘(II) such person knowingly or 

2 recklessly failed to disclose any such 

3 holding, purchase, or sale by the 

4 issuer; and 

5 ‘‘(III) the holding, purchase, or 

6 sale would have been otherwise sub7 ject to disclosure by the issuer or such 

8 person under this title.’’. 

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

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

11 amended by adding at the end the following: 

12 ‘‘(D) FOURTH TIER.—Notwithstanding 

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

14 violation, the amount of penalty shall not ex15 ceed $1,000,000 for any natural person or 

16 $10,000,000 for any other person, if— 

17 ‘‘(i) such person directly or indirectly 

18 controlled any foreign entity, including any 

19 trust, corporation, limited liability com20 pany, partnership, or foundation through 

21 which an issuer purchased, sold, or held 

22 equity or debt instruments; 

23 ‘‘(ii) such person knowingly or reck24 lessly failed to disclose any such holding, 

25 purchase, or sale by the issuer; and 


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

2 would have been otherwise subject to dis3 closure by the issuer or such person under 

4 this title.’’. 

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

6 203(i)(2) of the Investment Advisers Act of 1940 (15 

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

8 following: 

9 ‘‘(D) FOURTH TIER.—Notwithstanding 

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

11 violation, the amount of penalty shall not ex12 ceed $1,000,000 for any natural person or 

13 $10,000,000 for any other person, if— 

14 ‘‘(i) such person directly or indirectly 

15 controlled any foreign entity, including any 

16 trust, corporation, limited liability com17 pany, partnership, or foundation through 

18 which an issuer purchased, sold, or held 

19 equity or debt instruments; 

20 ‘‘(ii) such person knowingly or reck21 lessly failed to disclose any such holding, 

22 purchase, or sale by the issuer; and 

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

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1 closure by the issuer or such person under 

2 this title.’’. 

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

4 FOR INVESTMENT ADVISERS. 

5 (a) ANTI-MONEY LAUNDERING OBLIGATIONS FOR

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

7 United States Code, is amended— 

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

9 the end; 

10 (2) by redesignating subparagraph (Z) as sub11 paragraph (BB); and 

12 (3) by inserting after subparagraph (Y) the fol13 lowing: 

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

15 section 202(a) of the Investment Advisers Act 

16 of 1940);’’. 

17 (b) RULES REQUIRED.—The Secretary of the Treas18 ury shall— 

19 (1) in consultation with the Securities and Ex20 change Commission and the Commodity Futures 

21 Trading Commission, not later than 180 days after 

22 the date of enactment of this Act, publish a pro23 posed rule in the Federal Register to carry out the 

24 amendments made by this section; and 


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

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

3 Federal Register on the matter described in para4 graph (1). 

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

6 section shall require, at a minimum, each investment ad7 viser (as defined in section 202(a)(11) of the Investment 

8 Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11))) reg9 istered with the Securities and Exchange Commission pur10 suant to section 203 of that Act (15 U.S.C. 80b–3)— 

11 (1) to submit suspicious activity reports and es12 tablish an anti-money laundering program under 

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

14 of title 31, United States Code; and 

15 (2) to comply with— 

16 (A) the customer identification program 

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

18 United States Code; and 

19 (B) the due diligence requirements under 

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

21 SEC. 206. ANTI-MONEY LAUNDERING REQUIREMENTS FOR 

22 FORMATION AGENTS. 

23 (a) ANTI-MONEY LAUNDERING OBLIGATIONS FOR

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

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


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

2 following: 

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

4 of forming new corporations, limited liability 

5 companies, partnerships, trusts, or other legal 

6 entities; or’’. 

7 (b) DEADLINE FOR ANTI-MONEY LAUNDERING

8 RULE FOR FORMATION AGENTS.— 

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

10 Treasury, in consultation with the Attorney General 

11 of the United States, the Secretary of Homeland Se12 curity, and the Commissioner of Internal Revenue, 

13 shall— 

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

15 of enactment of this Act, publish a proposed 

16 rule in the Federal Register requiring persons 

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

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

19 establish anti-money laundering programs 

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

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

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

23 the Federal Register on the matter described in 

24 subparagraph (A). 


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1 (2) EXCLUSIONS.—The rule promulgated under 

2 this subsection shall exclude from the category of 

3 persons engaged in the business of forming new cor4 porations or other entities— 

5 (A) any government agency; and 

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

7 paid formation agent operating within the 

8 United States to form such corporations or 

9 other entities. 

10 SEC. 207. STRENGTHENING JOHN DOE SUMMONS PRO11 CEEDINGS. 

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

13 amended to read as follows: 

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

15 JOHN DOE SUMMONS.— 

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

17 in subsection (c)(1) which does not identify the per18 son with respect to whose liability the summons is 

19 issued may be served only after a court proceeding 

20 in which the Secretary establishes that— 

21 ‘‘(A) the summons relates to the investiga22 tion of a particular person or ascertainable 

23 group or class of persons, 

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1 sons may fail or may have failed to comply with 

2 any provision of any internal revenue law, and 

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

4 from the examination of the records or testi5 mony (and the identity of the person or persons 

6 with respect to whose liability the summons is 

7 issued) is not readily available from other 

8 sources. 

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

10 apply to any summons which specifies that it is lim11 ited to information regarding a United States cor12 respondent account (as defined in section 

13 5318A(e)(1)(B) of title 31, United States Code) or 

14 a United States payable-through account (as defined 

15 in section 5318A(e)(1)(C) of such title) of a finan16 cial institution that is held at a non-FATCA institu17 tion (as defined in section 7701(a)(51)). 

18 ‘‘(3) PRESUMPTION IN CASES INVOLVING NON19 FATCA INSTITUTIONS.—For purposes of this section, 

20 in any case in which the particular person or ascer21 tainable group or class of persons have financial ac22 counts in or transactions related to a non-FATCA 

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

24 shall be a presumption that there is a reasonable 

25 basis for believing that such person or group or class 


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1 of persons may fail or may have failed to comply 

2 with provisions of internal revenue law. 

3 ‘‘(4) PROJECT JOHN DOE SUMMONSES.— 

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

5 requirements of paragraph (1), the Secretary 

6 may issue a summons described in paragraph 

7 (1) if the summons— 

8 ‘‘(i) relates to a project which is ap9 proved under subparagraph (B), 

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

11 member of the group or class established 

12 under subparagraph (B)(i), and 

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

14 date on which such project was approved 

15 under subparagraph (B). 

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

17 may only be approved under this subparagraph 

18 after a court proceeding in which the Secretary 

19 establishes that— 

20 ‘‘(i) any summons issued with respect 

21 to the project will be issued to a member 

22 of an ascertainable group or class of per23 sons, and 


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1 ‘‘(ii) any summons issued with respect 

2 to such project will meet the requirements 

3 of paragraph (1). 

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

5 the Secretary, the court may extend the time 

6 for issuing such summonses under subpara7 graph (A)(i) for additional 3-year periods, but 

8 only if the court continues to exercise oversight 

9 of such project under subparagraph (D). 

10 ‘‘(D) ONGOING COURT OVERSIGHT.—Dur11 ing any period in which the Secretary is author12 ized to issue summonses in relation to a project 

13 approved under subparagraph (B) (including 

14 during any extension under subparagraph (C)), 

15 the Secretary shall report annually to the court 

16 on the use of such authority, provide copies of 

17 all summonses with such report, and comply 

18 with the court’s direction with respect to the 

19 issuance of any John Doe summons under such 

20 project.’’. 

21 (b) JURISDICTION OF COURT.— 

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

23 7609(h) is amended by inserting after the first sen24 tence the following new sentence: ‘‘Any United 

25 States district court in which a member of the group 


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1 or class to which a summons may be issued resides 

2 or is found shall have jurisdiction to hear and deter3 mine the approval of a project under subsection 

4 (f)(4)(B).’’. 

5 (2) CONFORMING AMENDMENT.—The first sen6 tence of section 7609(h)(1) is amended by striking 

7 ‘‘(f)’’ and inserting ‘‘(f)(1)’’. 

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

9 this section shall apply to summonses issued after the date 

10 of the enactment of this Act. 

11 SEC. 208. IMPROVING ENFORCEMENT OF FOREIGN FINAN12 CIAL ACCOUNT REPORTING. 

13 (a) CLARIFYING THE CONNECTION OF FOREIGN FI14 NANCIAL ACCOUNT REPORTING TO TAX ADMINISTRA15 TION.—Paragraph (4) of section 6103(b) is amended by 

16 adding at the end the following new sentence: 

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

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

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

20 such section 5314), shall be considered related stat21 utes.’’. 

22 (b) SIMPLIFYING THE CALCULATION OF FOREIGN

23 FINANCIAL ACCOUNT REPORTING PENALTIES.—Section 

24 5321(a)(5)(D)(ii) of title 31, United States Code, is 

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


pamtmann on DSKBC07HB2PROD with BILLS
46 

•HR 1786 IH

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

2 in the account during the reporting period to which the 

3 violation relates’’. 

4 (c) CLARIFYING THE USE OF SUSPICIOUS ACTIVITY

5 REPORTS UNDER THE BANK SECRECY ACT FOR CIVIL

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

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

8 criminal enforcement divisions of the Internal Revenue 

9 Service,’’ after ‘‘including’’. 

Æ 


pamtmann on DSKBC07HB2PROD with BILLS