I 
114TH CONGRESS 
1ST SESSION 
H. R. 297 
To end offshore tax abuses, to preserve our national defense and protect 
American families and businesses from devastating cuts, and for other 
purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 13, 2015 
Mr. DOGGETT (for himself, Mr. BLUMENAUER, Ms. DELAURO, Ms. EDWARDS, 
Mr. ELLISON, Mr. GUTIE´RREZ, Mr. HASTINGS, Mr. HIGGINS, Mr. JOHN-
SON of Georgia, Mr. LANGEVIN, Mr. LARSON of Connecticut, Mr. LYNCH, 
Mr. MCDERMOTT, Mr. NADLER, Mr. RUSH, Ms. SLAUGHTER, Ms. TSON-
GAS, Mr. VAN HOLLEN, Mr. WELCH, Mr. HUFFMAN, Mr. POCAN, Ms. 
NORTON, Mr. YARMUTH, Mr. DEUTCH, Mrs. NAPOLITANO, and Mr. 
CICILLINE) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Finan-
cial Services, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To end offshore tax abuses, to preserve our national defense 
and protect American families and businesses from dev-
astating cuts, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE, ETC. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Stop Tax Haven Abuse Act’’. 
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(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment 
to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986. 
(c) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title, etc. 
TITLE I—DETERRING THE USE OF TAX HAVENS FOR TAX 
EVASION 
Sec. 101. Authorizing special measures against foreign jurisdictions, financial 
institutions, and others that significantly impede United States 
tax enforcement. 
Sec. 102. Strengthening the Foreign Account Tax Compliance Act (FATCA). 
Sec. 103. Treatment of foreign corporations managed and controlled in the 
United States as domestic corporations. 
Sec. 104. Reporting United States beneficial owners of foreign owned financial 
accounts. 
Sec. 105. Swap payments made from the United States to persons offshore. 
TITLE II—OTHER MEASURES TO COMBAT TAX HAVEN ABUSES 
Sec. 201. Country-by-country reporting. 
Sec. 202. Penalty for failing to disclose offshore holdings. 
Sec. 203. Deadline for anti-money laundering rule for investment advisers. 
Sec. 204. Anti-money laundering requirements for formation agents. 
Sec. 205. Strengthening John Doe summons proceedings. 
Sec. 206. Improving enforcement of foreign financial account reporting. 
TITLE III—ENDING CORPORATE OFFSHORE TAX AVOIDANCE 
Sec. 301. Allocation of expenses and taxes on basis of repatriation of foreign 
income. 
Sec. 302. Excess income from transfers of intangibles to low-taxed affiliates 
treated as subpart F income. 
Sec. 303. Limitations on income shifting through intangible property transfers. 
Sec. 304. Repeal of check-the-box rules for certain foreign entities and CFC 
look-thru rules. 
Sec. 305. Restrictions on deduction for interest expense of members of financial 
reporting groups with excess domestic indebtedness. 
TITLE IV—INVERTED CORPORATIONS 
Sec. 401. Modifications to rules relating to inverted corporations. 
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TITLE I—DETERRING THE USE 
OF TAX HAVENS FOR TAX 
EVASION 
SEC. 101. AUTHORIZING SPECIAL MEASURES AGAINST FOR-
EIGN JURISDICTIONS, FINANCIAL INSTITU-
TIONS, AND OTHERS THAT SIGNIFICANTLY 
IMPEDE UNITED STATES TAX ENFORCEMENT. 
Section 5318A of title 31, United States Code, is 
amended— 
(1) by striking the section heading and insert-
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’’; 
(2) in subsection (a), by striking the subsection 
heading and inserting the following: 
‘‘(a) SPECIAL MEASURES TO COUNTER MONEY 
LAUNDERING AND EFFORTS TO SIGNIFICANTLY IMPEDE 
UNITED STATES TAX ENFORCEMENT.—’’; 
(3) in subsection (c)— 
(A) by striking the subsection heading and 
inserting the following: 
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‘‘(c) CONSULTATIONS
AND INFORMATION TO BE 
CONSIDERED IN FINDING JURISDICTIONS, INSTITUTIONS, 
TYPES OF ACCOUNTS, OR TRANSACTIONS TO BE OF PRI-
MARY MONEY LAUNDERING CONCERN OR TO BE SIGNIFI-
CANTLY
IMPEDING
UNITED
STATES
TAX
ENFORCE-
MENT.—’’; and 
(B) by inserting at the end of paragraph 
(2) thereof the following new subparagraph: 
‘‘(C) OTHER CONSIDERATIONS.—The fact 
that a jurisdiction or financial institution is co-
operating with the United States on imple-
menting the requirements specified in chapter 4 
of the Internal Revenue Code of 1986 may be 
favorably considered in evaluating whether such 
jurisdiction or financial institution is signifi-
cantly impeding United States tax enforce-
ment.’’; 
(4) in subsection (a)(1), by inserting ‘‘or is sig-
nificantly impeding United States tax enforcement’’ 
after ‘‘primary money laundering concern’’; 
(5) in subsection (a)(4)— 
(A) in subparagraph (A)— 
(i) by inserting ‘‘in matters involving 
money laundering,’’ before ‘‘shall consult’’; 
and 
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(ii) by striking ‘‘and’’ at the end; 
(B) by redesignating subparagraph (B) as 
subparagraph (C); and 
(C) by inserting after subparagraph (A) 
the following: 
‘‘(B) in matters involving United States 
tax enforcement, shall consult with the Commis-
sioner of the Internal Revenue, the Secretary of 
State, the Attorney General of the United 
States, and in the sole discretion of the Sec-
retary, such other agencies and interested par-
ties as the Secretary may find to be appro-
priate; and’’; 
(6) in each of paragraphs (1)(A), (2), (3), and 
(4) of subsection (b), by inserting ‘‘or to be signifi-
cantly impeding United States tax enforcement’’ 
after ‘‘primary money laundering concern’’ each 
place that term appears; 
(7) in subsection (b), by striking paragraph (5) 
and inserting the following: 
‘‘(5) PROHIBITIONS OR CONDITIONS ON OPEN-
ING OR MAINTAINING CERTAIN CORRESPONDENT OR 
PAYABLE-THROUGH
ACCOUNTS
OR
AUTHORIZING 
CERTAIN PAYMENT CARDS.—If the Secretary finds a 
jurisdiction outside of the United States, 1 or more 
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financial institutions operating outside of the United 
States, or 1 or more classes of transactions within 
or involving a jurisdiction outside of the United 
States to be of primary money laundering concern or 
to be significantly impeding United States tax en-
forcement, the Secretary, in consultation with the 
Secretary of State, the Attorney General of the 
United States, and the Chairman of the Board of 
Governors of the Federal Reserve System, may pro-
hibit, or impose conditions upon— 
‘‘(A) the opening or maintaining in the 
United States of a correspondent account or 
payable-through account; or 
‘‘(B) the authorization, approval, or use in 
the United States of a credit card, charge card, 
debit card, or similar credit or debit financial 
instrument by any domestic financial institu-
tion, financial agency, or credit card company 
or association, for or on behalf of a foreign 
banking institution, if such correspondent ac-
count, payable-through account, credit card, 
charge card, debit card, or similar credit or 
debit financial instrument, involves any such ju-
risdiction or institution, or if any such trans-
action may be conducted through such cor-
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respondent account, payable-through account, 
credit card, charge card, debit card, or similar 
credit or debit financial instrument.’’; 
(8) in subsection (c)(1), by inserting ‘‘or is sig-
nificantly impeding United States tax enforcement’’ 
after ‘‘primary money laundering concern’’; 
(9) in subsection (c)(2)(A)— 
(A) in clause (ii), by striking ‘‘bank secrecy 
or special regulatory advantages’’ and inserting 
‘‘bank, tax, corporate, trust, or financial secrecy 
or regulatory advantages’’; 
(B) in clause (iii), by striking ‘‘supervisory 
and counter-money’’ and inserting ‘‘supervisory, 
international tax enforcement, and counter- 
money’’; 
(C) in clause (v), by striking ‘‘banking or 
secrecy’’ and inserting ‘‘banking, tax, or se-
crecy’’; and 
(D) in clause (vi), by inserting ‘‘, tax trea-
ty, or tax information exchange agreement’’ 
after ‘‘treaty’’; 
(10) in subsection (c)(2)(B)— 
(A) in clause (i), by inserting ‘‘or tax eva-
sion’’ after ‘‘money laundering’’; and 
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(B) in clause (iii), by inserting ‘‘, tax eva-
sion,’’ after ‘‘money laundering’’; and 
(11) in subsection (d), by inserting ‘‘involving 
money laundering, and shall notify, in writing, the 
Committee on Finance of the Senate and the Com-
mittee on Ways and Means of the House of Rep-
resentatives of any such action involving United 
States tax enforcement’’ after ‘‘such action’’. 
SEC. 102. STRENGTHENING THE FOREIGN ACCOUNT TAX 
COMPLIANCE ACT (FATCA). 
(a) REPORTING ACTIVITIES WITH RESPECT TO PAS-
SIVE
FOREIGN
INVESTMENT
COMPANIES.—Section 
1298(f) is amended by inserting ‘‘, or who directly or indi-
rectly forms, transfers assets to, is a beneficiary of, has 
a beneficial interest in, or receives money or property or 
the use thereof from,’’ after ‘‘shareholder of’’. 
(b) WITHHOLDABLE PAYMENTS TO FOREIGN FINAN-
CIAL INSTITUTIONS.—Section 1471(d) is amended— 
(1) by inserting ‘‘or transaction’’ after ‘‘any de-
pository’’ in paragraph (2)(A), and 
(2) by striking ‘‘or any interest’’ and all that 
follows in paragraph (5)(C) and inserting ‘‘deriva-
tives, or any interest (including a futures or forward 
contract, swap, or option) in such securities, part-
nership interests, commodities, or derivatives.’’. 
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(c) WITHHOLDABLE PAYMENTS TO OTHER FOREIGN 
FINANCIAL INSTITUTIONS.—Section 1472 is amended— 
(1) by inserting ‘‘as a result of any customer 
identification, anti-money laundering, anti-corrup-
tion, or similar obligation to identify account hold-
ers,’’ after ‘‘reason to know,’’ in subsection (b)(2), 
and 
(2) by inserting ‘‘as posing a low risk of tax 
evasion’’ after ‘‘this subsection’’ in subsection 
(c)(1)(G). 
(d) DEFINITIONS.—Clauses (i) and (ii) of section 
1473(2)(A) are each amended by inserting ‘‘or as a bene-
ficial owner’’ after ‘‘indirectly’’. 
(e) SPECIAL RULES.—Section 1474(c) is amended— 
(1) by inserting ‘‘, except that information pro-
vided under sections 1471(c) or 1472(b) may be dis-
closed to any Federal law enforcement agency, upon 
request or upon the initiation of the Secretary, to in-
vestigate or address a possible violation of United 
States law’’ after ‘‘shall apply’’ in paragraph (1), 
and 
(2) by inserting ‘‘, or has had an agreement 
terminated under such section,’’ after ‘‘section 
1471(b)’’ in paragraph (2). 
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(f) INFORMATION WITH RESPECT TO FOREIGN FI-
NANCIAL ASSETS.—Section 6038D(a) is amended by in-
serting ‘‘ownership or beneficial ownership’’ after ‘‘holds 
any’’. 
(g) ESTABLISHING PRESUMPTIONS
FOR ENTITIES 
AND TRANSACTIONS INVOLVING NON-FATCA INSTITU-
TIONS.— 
(1) PRESUMPTIONS FOR TAX PURPOSES.— 
(A) IN GENERAL.—Chapter 76 is amended 
by inserting after section 7491 the following 
new subchapter: 
‘‘Subchapter F—Presumptions for Certain 
Legal Proceedings 
‘‘Sec. 7492. Presumptions pertaining to entities and transactions involving non- 
FATCA institutions. 
‘‘SEC. 7492. PRESUMPTIONS PERTAINING TO ENTITIES AND 
TRANSACTIONS INVOLVING NON-FATCA IN-
STITUTIONS. 
‘‘(a) CONTROL.—For purposes of any United States 
civil judicial or administrative proceeding to determine or 
collect tax, there shall be a rebuttable presumption that 
a United States person who, directly or indirectly, formed, 
transferred assets to, was a beneficiary of, had a beneficial 
interest in, or received money or property or the use there-
of from an entity, including a trust, corporation, limited 
liability company, partnership, or foundation, that holds 
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an account, or in any other manner has assets, in a non- 
FATCA institution, exercised control over such entity. The 
presumption of control created by this subsection shall not 
be applied to prevent the Secretary from determining or 
arguing the absence of control. 
‘‘(b) TRANSFERS OF INCOME.—For purposes of any 
United States civil judicial or administrative proceeding 
to determine or collect tax, there shall be a rebuttable pre-
sumption that any amount or thing of value received by 
a United States person directly or indirectly from an ac-
count or from an entity that holds an account, or in any 
other manner has assets, in a non-FATCA institution, 
constitutes income of such person taxable in the year of 
receipt; and any amount or thing of value paid or trans-
ferred by or on behalf of a United States person directly 
or indirectly to an account, or entity that holds an ac-
count, or in any other manner has assets, in a non- 
FATCA institution, represents previously unreported in-
come of such person taxable in the year of the transfer. 
‘‘(c) REBUTTING
THE PRESUMPTIONS.—The pre-
sumptions established in this section may be rebutted only 
by clear and convincing evidence, including detailed docu-
mentary, testimonial, and transactional evidence, estab-
lishing that— 
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‘‘(1) in subsection (a), such taxpayer exercised 
no control, directly or indirectly, over account or en-
tity at the time in question, and 
‘‘(2) in subsection (b), such amounts or things 
of value did not represent income related to such 
United States person. 
Any court having jurisdiction of a civil proceeding in which 
control of such an offshore account or offshore entity or 
the income character of such receipts or amounts trans-
ferred is an issue shall prohibit the introduction by the 
taxpayer of any foreign based document that is not au-
thenticated in open court by a person with knowledge of 
such document, or any other evidence supplied by a person 
outside the jurisdiction of a United States court, unless 
such person appears before the court.’’. 
(B) The table of subchapters for chapter 
76 is amended by inserting after the item relat-
ing to subchapter E the following new item: 
‘‘SUBCHAPTER F. PRESUMPTIONS FOR CERTAIN LEGAL PROCEEDINGS’’. 
(2) DEFINITION OF NON-FATCA INSTITUTION.— 
Section 7701(a) is amended by adding at the end 
the following new paragraph: 
‘‘(51) NON-FATCA
INSTITUTION.—The term 
‘non-FATCA institution’ means any foreign financial 
institution that does not meet the reporting require-
ments of section 1471(b).’’. 
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(3) PRESUMPTIONS FOR SECURITIES LAW PUR-
POSES.—Section 21 of the Securities Exchange Act 
of 1934 (15 U.S.C. 78u) is amended by adding at 
the end the following new subsection: 
‘‘(j) PRESUMPTIONS PERTAINING TO CONTROL AND 
BENEFICIAL OWNERSHIP.— 
‘‘(1) CONTROL.—For purposes of any civil judi-
cial or administrative proceeding under this title, 
there shall be a rebuttable presumption that a 
United States person who, directly or indirectly, 
formed, transferred assets to, was a beneficiary of, 
had a beneficial interest in, or received money or 
property or the use thereof from an entity, including 
a trust, corporation, limited liability company, part-
nership, or foundation, that holds an account, or in 
any other manner has assets, in a non-FATCA insti-
tution (as defined in section 7701(a)(51) of the In-
ternal Revenue Code of 1986), exercised control over 
such entity. The presumption of control created by 
this paragraph shall not be applied to prevent the 
Commission from determining or arguing the ab-
sence of control. 
‘‘(2) BENEFICIAL OWNERSHIP.—For purposes 
of any civil judicial or administrative proceeding 
under this title, there shall be a rebuttable presump-
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tion that securities that are nominally owned by an 
entity, including a trust, corporation, limited liability 
company, partnership, or foundation, and that are 
held in a non-FATCA institution (as so defined), are 
beneficially owned by any United States person who 
directly or indirectly exercised control over such enti-
ty. The presumption of beneficial ownership created 
by this paragraph shall not be applied to prevent the 
Commission from determining or arguing the ab-
sence of beneficial ownership.’’. 
(4) PRESUMPTION FOR REPORTING PURPOSES 
RELATING TO FOREIGN FINANCIAL ACCOUNTS.—Sec-
tion 5314 of title 31, United States Code, is amend-
ed by adding at the end the following new sub-
section: 
‘‘(d) REBUTTABLE PRESUMPTION.—For purposes of 
this section, there shall be a rebuttable presumption that 
any account with a non-FATCA institution (as defined in 
section 7701(a)(51) of the Internal Revenue Code of 
1986) contains funds in an amount that is at least suffi-
cient to require a report prescribed by regulations under 
this section.’’. 
(5) REGULATORY AUTHORITY.—Not later than 
180 days after the date of enactment of this Act, the 
Secretary of the Treasury and the Chairman of the 
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Securities and Exchange Commission shall each 
adopt regulations or other guidance necessary to im-
plement the amendments made by this subsection. 
The Secretary and the Chairman may, by regulation 
or guidance, provide that the presumption of control 
shall not extend to particular classes of transactions, 
such as corporate reorganizations or transactions 
below a specified dollar threshold, if either deter-
mines that applying such amendments to such trans-
actions is not necessary to carry out the purposes of 
such amendments. 
(h) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on the date which is 180 days 
after the date of enactment of this Act, whether or not 
regulations are issued under subsection (g)(5). 
SEC. 103. TREATMENT OF FOREIGN CORPORATIONS MAN-
AGED AND CONTROLLED IN THE UNITED 
STATES AS DOMESTIC CORPORATIONS. 
(a) IN GENERAL.—Section 7701 is amended by re-
designating subsection (p) as subsection (q) and by insert-
ing after subsection (o) the following new subsection: 
‘‘(p) CERTAIN CORPORATIONS MANAGED AND CON-
TROLLED IN THE UNITED STATES TREATED AS DOMES-
TIC FOR INCOME TAX.— 
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‘‘(1) IN GENERAL.—Notwithstanding subsection 
(a)(4), in the case of a corporation described in 
paragraph (2) if— 
‘‘(A) the corporation would not otherwise 
be treated as a domestic corporation for pur-
poses of this title, but 
‘‘(B) the management and control of the 
corporation occurs, directly or indirectly, pri-
marily within the United States, 
then, solely for purposes of chapter 1 (and any other 
provision of this title relating to chapter 1), the cor-
poration shall be treated as a domestic corporation. 
‘‘(2) CORPORATION DESCRIBED.— 
‘‘(A) IN GENERAL.—A corporation is de-
scribed in this paragraph if— 
‘‘(i) the stock of such corporation is 
regularly traded on an established securi-
ties market, or 
‘‘(ii) the aggregate gross assets of 
such corporation (or any predecessor there-
of), including assets under management 
for investors, whether held directly or indi-
rectly, at any time during the taxable year 
or 
any 
preceding 
taxable 
year 
is 
$50,000,000 or more. 
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‘‘(B) GENERAL
EXCEPTION.—A corpora-
tion shall not be treated as described in this 
paragraph if— 
‘‘(i) such corporation was treated as a 
corporation described in this paragraph in 
a preceding taxable year, 
‘‘(ii) such corporation— 
‘‘(I) is not regularly traded on an 
established securities market, and 
‘‘(II) has, and is reasonably ex-
pected to continue to have, aggregate 
gross assets (including assets under 
management for investors, whether 
held directly or indirectly) of less than 
$50,000,000, and 
‘‘(iii) the Secretary grants a waiver to 
such corporation under this subparagraph. 
‘‘(3) MANAGEMENT AND CONTROL.— 
‘‘(A) IN
GENERAL.—The Secretary shall 
prescribe regulations for purposes of deter-
mining cases in which the management and 
control of a corporation is to be treated as oc-
curring primarily within the United States. 
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‘‘(B) EXECUTIVE OFFICERS AND SENIOR 
MANAGEMENT.—Such regulations shall provide 
that— 
‘‘(i) the management and control of a 
corporation shall be treated as occurring 
primarily within the United States if sub-
stantially all of the executive officers and 
senior management of the corporation who 
exercise day-to-day responsibility for mak-
ing decisions involving strategic, financial, 
and operational policies of the corporation 
are located primarily within the United 
States, and 
‘‘(ii) individuals who are not executive 
officers and senior management of the cor-
poration (including individuals who are of-
ficers or employees of other corporations in 
the same chain of corporations as the cor-
poration) shall be treated as executive offi-
cers and senior management if such indi-
viduals exercise the day-to-day responsibil-
ities of the corporation described in clause 
(i). 
‘‘(C) CORPORATIONS PRIMARILY HOLDING 
INVESTMENT
ASSETS.—Such regulations shall 
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also provide that the management and control 
of a corporation shall be treated as occurring 
primarily within the United States if— 
‘‘(i) the assets of such corporation (di-
rectly or indirectly) consist primarily of as-
sets being managed on behalf of investors, 
and 
‘‘(ii) decisions about how to invest the 
assets are made in the United States.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning on or 
after the date which is 2 years after the date of the enact-
ment of this Act, whether or not regulations are issued 
under section 7701(p)(3) of the Internal Revenue Code 
of 1986, as added by this section. 
SEC. 104. REPORTING UNITED STATES BENEFICIAL OWN-
ERS OF FOREIGN OWNED FINANCIAL AC-
COUNTS. 
(a) IN GENERAL.—Subpart B of part III of sub-
chapter A of chapter 61 is amended by inserting after sec-
tion 6045B the following new sections: 
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‘‘SEC. 6045C. RETURNS REGARDING UNITED STATES BENE-
FICIAL OWNERS OF FINANCIAL ACCOUNTS 
LOCATED IN THE UNITED STATES AND HELD 
IN THE NAME OF A FOREIGN ENTITY. 
‘‘(a) REQUIREMENT OF RETURN.—If— 
‘‘(1) any withholding agent under sections 1441 
and 1442 has the control, receipt, custody, disposal, 
or payment of any amount constituting gross income 
from sources within the United States of any foreign 
entity, including a trust, corporation, limited liability 
company, partnership, or foundation (other than an 
entity with shares regularly traded on an established 
securities market), and 
‘‘(2) such withholding agent determines for pur-
poses of titles 14, 18, or 31 of the United States 
Code that a United States person has any beneficial 
interest in the foreign entity or in the account in 
such entity’s name (hereafter in this section referred 
to as ‘United States beneficial owner’), 
then the withholding agent shall make a return according 
to the forms or regulations prescribed by the Secretary. 
‘‘(b) REQUIRED INFORMATION.—For purposes of 
subsection (a) the information required to be included on 
the return shall include— 
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‘‘(1) the name, address, and, if known, the tax-
payer identification number of the United States 
beneficial owner, 
‘‘(2) the known facts pertaining to the relation-
ship of such United States beneficial owner to the 
foreign entity and the account, 
‘‘(3) the gross amount of income from sources 
within the United States (including gross proceeds 
from brokerage transactions), and 
‘‘(4) such other information as the Secretary 
may by forms or regulations provide. 
‘‘(c) STATEMENTS TO BE FURNISHED TO BENE-
FICIAL OWNERS WITH RESPECT TO WHOM INFORMATION 
IS REQUIRED TO BE REPORTED.—A withholding agent 
required to make a return under subsection (a) shall fur-
nish to each United States beneficial owner whose name 
is required to be set forth in such return a statement 
showing— 
‘‘(1) the name, address, and telephone number 
of the information contact of the person required to 
make such return, and 
‘‘(2) the information required to be shown on 
such return with respect to such United States bene-
ficial owner. 
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The written statement required under the preceding sen-
tence shall be furnished to the United States beneficial 
owner on or before January 31 of the year following the 
calendar year for which the return under subsection (a) 
was required to be made. In the event the person filing 
such return does not have a current address for the United 
States beneficial owner, such written statement may be 
mailed to the address of the foreign entity. 
‘‘SEC. 6045D. RETURNS BY FINANCIAL INSTITUTIONS RE-
GARDING ESTABLISHMENT OF ACCOUNTS IN 
NON-FATCA INSTITUTIONS. 
‘‘(a) REQUIREMENT OF RETURN.—Any financial in-
stitution directly or indirectly opening a bank, brokerage, 
or other financial account for or on behalf of an offshore 
entity, including a trust, corporation, limited liability com-
pany, partnership, or foundation (other than an entity 
with shares regularly traded on an established securities 
market), in a non-FATCA institution (as defined in sec-
tion 7701(a)(51)) at the direction of, on behalf of, or for 
the benefit of a United States person shall make a return 
according to the forms or regulations prescribed by the 
Secretary. 
‘‘(b) REQUIRED INFORMATION.—For purposes of 
subsection (a) the information required to be included on 
the return shall include— 
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‘‘(1) the name, address, and taxpayer identifica-
tion number of such United States person, 
‘‘(2) the name and address of the financial in-
stitution at which a financial account is opened, the 
type of account, the account number, the name 
under which the account was opened, and the 
amount of the initial deposit, 
‘‘(3) if the account is held in the name of an 
entity, the name and address of such entity, the type 
of entity, and the name and address of any company 
formation agent or other professional employed to 
form or acquire the entity, and 
‘‘(4) such other information as the Secretary 
may by forms or regulations provide. 
‘‘(c) STATEMENTS TO BE FURNISHED TO UNITED 
STATES PERSONS WITH RESPECT TO WHOM INFORMA-
TION IS REQUIRED TO BE REPORTED.—A financial insti-
tution required to make a return under subsection (a) 
shall furnish to each United States person whose name 
is required to be set forth in such return a statement 
showing— 
‘‘(1) the name, address, and telephone number 
of the information contact of the person required to 
make such return, and 
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‘‘(2) the information required to be shown on 
such return with respect to such United States per-
son. 
The written statement required under the preceding sen-
tence shall be furnished to such United States person on 
or before January 31 of the year following the calendar 
year for which the return under subsection (a) was re-
quired to be made. 
‘‘(d) EXEMPTION.—The Secretary may by regula-
tions exempt any class of United States persons or any 
class of accounts or entities from the requirements of this 
section if the Secretary determines that applying this sec-
tion to such persons, accounts, or entities is not necessary 
to carry out the purposes of this section.’’. 
(b) PENALTIES.— 
(1) 
RETURNS.—Section 
6724(d)(1)(B) 
is 
amended by striking ‘‘or’’ at the end of clause 
(xxiv), by striking ‘‘and’’ at the end of clause (xxv), 
and by adding after clause (xxv) the following new 
clauses: 
‘‘(xxvi) section 6045C(a) (relating to 
returns regarding United States beneficial 
owners of financial accounts located in the 
United States and held in the name of a 
foreign entity), or 
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‘‘(xxvii) section 6045D(a) (relating to 
returns by financial institutions regarding 
establishment of accounts at non-FATCA 
institutions), and’’. 
(2) PAYEE STATEMENTS.—Section 6724(d)(2) 
is amended by striking ‘‘or’’ at the end of subpara-
graph (GG), by striking the period at the end of 
subparagraph (HH), and by inserting after subpara-
graph (HH) the following new subparagraphs: 
‘‘(II) section 6045C(c) (relating to returns 
regarding United States beneficial owners of fi-
nancial accounts located in the United States 
and held in the name of a foreign entity), 
‘‘(JJ) section 6045D(c) (relating to re-
turns by financial institutions regarding estab-
lishment of accounts at non-FATCA institu-
tions).’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart B of part III of subchapter A of chapter 61 
is amended by inserting after the item relating to section 
6045B the following new items: 
‘‘Sec. 6045C. Returns regarding United States beneficial owners of financial 
accounts located in the United States and held in the name of 
a foreign entity. 
‘‘Sec. 6045D. Returns by financial institutions regarding establishment of ac-
counts at non-FATCA institutions.’’. 
(d) ADDITIONAL PENALTIES.— 
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(1) ADDITIONAL PENALTIES ON BANKS.—Sec-
tion 5239(b)(1) of the Revised Statutes of the 
United States (12 U.S.C. 93(b)(1)) is amended by 
inserting ‘‘or any of the provisions of section 6045D 
of the Internal Revenue Code of 1986,’’ after ‘‘any 
regulation issued pursuant to,’’. 
(2) ADDITIONAL
PENALTIES
ON
SECURITIES 
FIRMS.—Section 21(d)(3)(A) of the Securities Ex-
change Act of 1934 (15 U.S.C. 78u(d)(3)(A)) is 
amended by inserting ‘‘any of the provisions of sec-
tion 6045D of the Internal Revenue Code of 1986,’’ 
after ‘‘the rules or regulations thereunder,’’. 
(e) REGULATORY
AUTHORITY
AND
EFFECTIVE 
DATE.— 
(1) REGULATORY AUTHORITY.—Not later than 
180 days after the date of the enactment of this Act, 
the Secretary of the Treasury shall adopt regula-
tions, forms, or other guidance necessary to imple-
ment this section. 
(2) EFFECTIVE DATE.—Section 6045C of the 
Internal Revenue Code of 1986 (as added by this 
section) and the amendment made by subsection 
(d)(1) shall take effect with respect to amounts paid 
into foreign owned accounts located in the United 
States after December 31 of the year of the date of 
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the enactment of this Act. Section 6045D of such 
Code (as so added) and the amendment made by 
subsection (d)(2) shall take effect with respect to ac-
counts opened after December 31 of the year of the 
date of the enactment of this Act. 
SEC. 105. SWAP PAYMENTS MADE FROM THE UNITED 
STATES TO PERSONS OFFSHORE. 
(a) TAX ON SWAP PAYMENTS RECEIVED BY FOR-
EIGN PERSONS.—Section 871(a)(1) is amended— 
(1) by inserting ‘‘swap payments (as identified 
in section 1256(b)(2)(B)),’’ after ‘‘annuities,’’ in 
subparagraph (A), and 
(2) by adding at the end the following new sen-
tence: ‘‘In the case of swap payments, the source of 
a swap payment is determined by reference to the lo-
cation of the payor.’’. 
(b) TAX ON SWAP PAYMENTS RECEIVED BY FOR-
EIGN CORPORATIONS.—Section 881(a) is amended— 
(1) by inserting ‘‘swap payments (as identified 
in section 1256(b)(2)(B)),’’ after ‘‘annuities,’’ in 
paragraph (1), and 
(2) by adding at the end the following new sen-
tence: ‘‘In the case of swap payments, the source of 
a swap payment is determined by reference to the lo-
cation of the payor.’’. 
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TITLE II—OTHER MEASURES TO 
COMBAT TAX HAVEN ABUSES 
SEC. 201. COUNTRY-BY-COUNTRY REPORTING. 
(a) COUNTRY-BY-COUNTRY REPORTING.—Section 13 
of the Securities Exchange Act of 1934 (15 U.S.C. 78m) 
is amended by adding at the end the following new sub-
section: 
‘‘(s) DISCLOSURE OF FINANCIAL PERFORMANCE ON 
A COUNTRY-BY-COUNTRY BASIS.— 
‘‘(1) RULES REQUIRED.—The Commission shall 
issue rules that require each issuer to include in an 
annual report filed by the issuer with the Commis-
sion information on a country-by-country basis dur-
ing the covered period for each tax jurisdiction, ag-
gregated from all subsidiaries residing in that juris-
diction, consisting of— 
‘‘(A) revenues from unrelated parties, re-
lated parties, and in total, 
‘‘(B) profit or loss before taxes, 
‘‘(C) income tax accrued for the current 
year, 
‘‘(D) income tax paid (on a cash basis), 
‘‘(E) stated capital, 
‘‘(F) accumulated earnings, 
‘‘(G) number of employees, 
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‘‘(H) tangible assets other than cash or 
cash equivalents; and 
‘‘(I) such other financial information as 
the Commission may determine is necessary or 
appropriate in the public interest or for the pro-
tection of investors. 
‘‘(2) RULES
RELATING
TO
FOREIGN
SUB-
SIDIARY.—For each foreign subsidiary, the report 
required by paragraph (1) shall be grouped by resi-
dent jurisdiction (including a group for subsidiaries 
resident nowhere), the tax jurisdiction (if different), 
and main business activity.’’. 
(b) RULEMAKING.— 
(1) DEADLINES.—The Securities and Exchange 
Commission (in this section referred to as the ‘‘Com-
mission’’) shall— 
(A) not later than 270 days after the date 
of enactment of this Act, issue a proposed rule 
to carry out this section and the amendment 
made by this section; and 
(B) not later than 1 year after the date of 
enactment of this Act, issue a final rule to 
carry out this section and the amendment made 
by this section. 
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(2) DATA FORMAT.—The information required 
to be provided by this section shall be provided by 
the issuer in a report in a format prescribed by the 
Commission, and such report shall be made available 
to the public online, in such format as the Commis-
sion shall prescribe. 
(3) EFFECTIVE DATE.—Subsection (s) of sec-
tion 13 of the Securities Exchange Act of 1934, as 
added by this section, shall become effective 1 year 
after the date on which the Commission issues a 
final rule under this section. 
SEC. 202. PENALTY FOR FAILING TO DISCLOSE OFFSHORE 
HOLDINGS. 
(a) SECURITIES EXCHANGE ACT OF 1934.—Section 
21(d)(3)(B) of the Securities Exchange Act of 1934 (15 
U.S.C. 78u(d)(3)(B)) is amended by adding at the end 
the following: 
‘‘(iv) 
FOURTH
TIER.—Notwith-
standing clauses (i), (ii), and (iii), for each 
violation, the amount of the penalty shall 
not exceed $1,000,000 for any natural per-
son or $10,000,000 for any other person, 
if— 
‘‘(I) such person directly or indi-
rectly controlled any foreign entity, in-
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cluding any trust, corporation, limited 
liability 
company, 
partnership, 
or 
foundation through which an issuer 
purchased, sold, or held equity or debt 
instruments; 
‘‘(II) such person knowingly or 
recklessly failed to disclose any such 
holding, purchase, or sale by the 
issuer; and 
‘‘(III) the holding, purchase, or 
sale would have been otherwise sub-
ject to disclosure by the issuer or such 
person under this title.’’. 
(b) SECURITIES ACT OF 1933.—Section 20(d)(2) of 
the Securities Act of 1933 (15 U.S.C. 77t(d)(2)) is 
amended by adding at the end the following: 
‘‘(D) 
FOURTH
TIER.—Notwithstanding 
subparagraphs (A), (B), and (C), for each viola-
tion, the amount of the penalty shall not exceed 
$1,000,000 
for 
any 
natural 
person 
or 
$10,000,000 for any other person, if— 
‘‘(i) such person directly or indirectly 
controlled any foreign entity, including any 
trust, corporation, limited liability com-
pany, partnership, or foundation through 
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which an issuer purchased, sold, or held 
equity or debt instruments; 
‘‘(ii) such person knowingly or reck-
lessly failed to disclose any such holding, 
purchase, or sale by the issuer; and 
‘‘(iii) the holding, purchase, or sale 
would have been otherwise subject to dis-
closure by the issuer or such person under 
this title.’’. 
(c) INVESTMENT ADVISERS ACT OF 1940.—Section 
203(i)(2) of the Investment Advisers Act of 1940 (15 
U.S.C. 80b–3(i)(2)) is amended by adding at the end the 
following: 
‘‘(D) 
FOURTH
TIER.—Notwithstanding 
subparagraphs (A), (B), and (C), for each viola-
tion, the amount of the penalty shall not exceed 
$1,000,000 
for 
any 
natural 
person 
or 
$10,000,000 for any other person, if— 
‘‘(i) such person directly or indirectly 
controlled any foreign entity, including any 
trust, corporation, limited liability com-
pany, partnership, or foundation through 
which an issuer purchased, sold, or held 
equity or debt instruments; 
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‘‘(ii) such person knowingly or reck-
lessly failed to disclose any such holding, 
purchase, or sale by the issuer; and 
‘‘(iii) the holding, purchase, or sale 
would have been otherwise subject to dis-
closure by the issuer or such person under 
this title.’’. 
SEC. 203. DEADLINE FOR ANTI-MONEY LAUNDERING RULE 
FOR INVESTMENT ADVISERS. 
(a) ANTI-MONEY LAUNDERING OBLIGATIONS
FOR 
INVESTMENT ADVISERS.—Section 5312(a)(2) of title 31, 
United States Code, is amended— 
(1) in subparagraph (Y), by striking ‘‘or’’ at 
the end; 
(2) by redesignating subparagraph (Z) as sub-
paragraph (BB); and 
(3) by inserting after subparagraph (Y) the fol-
lowing: 
‘‘(Z) an investment adviser;’’. 
(b) RULES REQUIRED.—The Secretary of the Treas-
ury shall— 
(1) in consultation with the Chairman of the 
Securities and Exchange Commission and the Chair-
man of the Commodity Futures Trading Commis-
sion, not later than 180 days after the date of enact-
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ment of this Act, publish a proposed rule in the Fed-
eral Register to carry out the amendments made by 
this section; and 
(2) not later than 270 days after the date of 
enactment of this Act, publish a final rule in the 
Federal Register on the matter described in para-
graph (1). 
(c) CONTENTS.—The final rule published under this 
section shall require, at a minimum, each investment ad-
viser (as defined in section 202(a)(11) of the Investment 
Advisers Act of 1940 (15 U.S.C. 80b–2(a)(11))) reg-
istered with the Securities and Exchange Commission pur-
suant to section 203 of that Act (15 U.S.C. 80b–3)— 
(1) to submit suspicious activity reports and es-
tablish an anti-money laundering program under 
subsections (g) and (h), respectively, of section 5318 
of title 31, United States Code; and 
(2) to comply with— 
(A) the customer identification program 
requirements under section 5318(l) of title 31, 
United States Code; and 
(B) the due diligence requirements under 
section 5318(i) of title 31, United States Code. 
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SEC. 204. ANTI-MONEY LAUNDERING REQUIREMENTS FOR 
FORMATION AGENTS. 
(a) ANTI-MONEY LAUNDERING OBLIGATIONS
FOR 
FORMATION AGENTS.—Section 5312(a)(2) of title 31, 
United States Code, as amended by section 203 of this 
Act, is amended by inserting after subparagraph (Z) the 
following: 
‘‘(AA) any person engaged in the business 
of forming new corporations, limited liability 
companies, partnerships, trusts, or other legal 
entities; or’’. 
(b) DEADLINE
FOR
ANTI-MONEY
LAUNDERING 
RULE FOR FORMATION AGENTS.— 
(1) PROPOSED
RULE.—The Secretary of the 
Treasury, in consultation with the Attorney General 
of the United States, the Secretary of Homeland Se-
curity, and the Commissioner of Internal Revenue, 
shall— 
(A) not later than 120 days after the date 
of enactment of this Act, publish a proposed 
rule in the Federal Register requiring persons 
described in section 5312(a)(2)(AA) of title 31, 
United States Code, as added by this section, to 
establish 
anti-money 
laundering 
programs 
under section 5318(h) of that title; and 
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(B) not later than 270 days after the date 
of enactment of this Act, publish a final rule in 
the Federal Register on the matter described in 
subparagraph (A). 
(2) EXCLUSIONS.—The rule promulgated under 
this subsection shall exclude from the category of 
persons engaged in the business of forming new cor-
porations or other entities— 
(A) any government agency; and 
(B) any attorney or law firm that uses a 
paid formation agent operating within the 
United States to form such corporations or 
other entities. 
SEC. 205. STRENGTHENING JOHN DOE SUMMONS PRO-
CEEDINGS. 
(a) IN GENERAL.—Subsection (f) of section 7609 is 
amended to read as follows: 
‘‘(f) ADDITIONAL REQUIREMENT IN THE CASE OF A 
JOHN DOE SUMMONS.— 
‘‘(1) GENERAL RULE.—Any summons described 
in subsection (c)(1) which does not identify the per-
son with respect to whose liability the summons is 
issued may be served only after a court proceeding 
in which the Secretary establishes that— 
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‘‘(A) the summons relates to the investiga-
tion of a particular person or ascertainable 
group or class of persons, 
‘‘(B) there is a reasonable basis for believ-
ing that such person or group or class of per-
sons may fail or may have failed to comply with 
any provision of any internal revenue law, and 
‘‘(C) the information sought to be obtained 
from the examination of the records or testi-
mony (and the identity of the person or persons 
with respect to whose liability the summons is 
issued) is not readily available from other 
sources. 
‘‘(2) EXCEPTION.—Paragraph (1) shall not 
apply to any summons which specifies that it is lim-
ited to information regarding a United States cor-
respondent 
account 
(as 
defined 
in 
section 
5318A(e)(1)(B) of title 31, United States Code) or 
a United States payable-through account (as defined 
in section 5318A(e)(1)(C) of such title) of a finan-
cial institution that is held at a non-FATCA institu-
tion (as defined in section 7701(a)(51)). 
‘‘(3) PRESUMPTION IN CASES INVOLVING NON- 
FATCA INSTITUTIONS.—For purposes of this section, 
in any case in which the particular person or ascer-
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tainable group or class of persons have financial ac-
counts in or transactions related to a non-FATCA 
institution (as defined in section 7701(a)(51)), there 
shall be a presumption that there is a reasonable 
basis for believing that such person or group or class 
of persons may fail or may have failed to comply 
with provisions of internal revenue law. 
‘‘(4) PROJECT JOHN DOE SUMMONSES.— 
‘‘(A) IN
GENERAL.—Notwithstanding the 
requirements of paragraph (1), the Secretary 
may issue a summons described in paragraph 
(1) if the summons— 
‘‘(i) relates to a project which is ap-
proved under subparagraph (B), 
‘‘(ii) is issued to a person who is a 
member of the group or class established 
under subparagraph (B)(i), and 
‘‘(iii) is issued within 3 years of the 
date on which such project was approved 
under subparagraph (B). 
‘‘(B) APPROVAL OF PROJECTS.—A project 
may only be approved under this subparagraph 
after a court proceeding in which the Secretary 
establishes that— 
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‘‘(i) any summons issued with respect 
to the project will be issued to a member 
of an ascertainable group or class of per-
sons, and 
‘‘(ii) any summons issued with respect 
to such project will meet the requirements 
of paragraph (1). 
‘‘(C) EXTENSION.—Upon application of 
the Secretary, the court may extend the time 
for issuing such summonses under subpara-
graph (A)(i) for additional 3-year periods, but 
only if the court continues to exercise oversight 
of such project under subparagraph (D). 
‘‘(D) ONGOING COURT OVERSIGHT.—Dur-
ing any period in which the Secretary is author-
ized to issue summonses in relation to a project 
approved under subparagraph (B) (including 
during any extension under subparagraph (C)), 
the Secretary shall report annually to the court 
on the use of such authority, provide copies of 
all summonses with such report, and comply 
with the court’s direction with respect to the 
issuance of any John Doe summons under such 
project.’’. 
(b) JURISDICTION OF COURT.— 
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(1) IN
GENERAL.—Paragraph (1) of section 
7609(h) is amended by inserting after the first sen-
tence the following new sentence: ‘‘Any United 
States district court in which a member of the group 
or class to which a summons may be issued resides 
or is found shall have jurisdiction to hear and deter-
mine the approval of a project under subsection 
(f)(4)(B).’’. 
(2) CONFORMING AMENDMENT.—The first sen-
tence of section 7609(h)(1) is amended by striking 
‘‘(f)’’ and inserting ‘‘(f)(1)’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to summonses issued after the date 
of the enactment of this Act. 
SEC. 206. IMPROVING ENFORCEMENT OF FOREIGN FINAN-
CIAL ACCOUNT REPORTING. 
(a) CLARIFYING THE CONNECTION OF FOREIGN FI-
NANCIAL ACCOUNT REPORTING
TO TAX ADMINISTRA-
TION.—Paragraph (4) of section 6103(b) is amended by 
adding at the end the following new sentence: 
‘‘For purposes of subparagraph (A)(i), section 5314 
of title 31, United States Code, and sections 5321 
and 5322 of such title (as such sections pertain to 
such section 5314), shall be considered related stat-
utes.’’. 
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(b) SIMPLIFYING THE CALCULATION OF FOREIGN 
FINANCIAL ACCOUNT REPORTING PENALTIES.—Section 
5321(a)(5)(D)(ii) of title 31, United States Code, is 
amended by striking ‘‘the balance in the account at the 
time of the violation’’ and inserting ‘‘the highest balance 
in the account during the reporting period to which the 
violation relates’’. 
(c) CLARIFYING THE USE OF SUSPICIOUS ACTIVITY 
REPORTS UNDER THE BANK SECRECY ACT FOR CIVIL 
TAX LAW ENFORCEMENT.—Section 5319 of title 31, 
United States Code, is amended by inserting ‘‘the civil and 
criminal enforcement divisions of the Internal Revenue 
Service,’’ after ‘‘including’’. 
TITLE III—ENDING CORPORATE 
OFFSHORE TAX AVOIDANCE 
SEC. 301. ALLOCATION OF EXPENSES AND TAXES ON BASIS 
OF REPATRIATION OF FOREIGN INCOME. 
(a) IN GENERAL.—Part III of subchapter N of chap-
ter 1 is amended by inserting after subpart G the following 
new subpart: 
‘‘Subpart H—Special Rules for Allocation of Foreign- 
Related Deductions and Foreign Tax Credits 
‘‘Sec. 975. Deductions allocated to deferred foreign income may not offset 
United States source income. 
‘‘Sec. 976. Amount of foreign taxes computed on overall basis. 
‘‘Sec. 977. Application of subpart. 
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‘‘SEC. 975. DEDUCTIONS ALLOCATED TO DEFERRED FOR-
EIGN INCOME MAY NOT OFFSET UNITED 
STATES SOURCE INCOME. 
‘‘(a) CURRENT YEAR DEDUCTIONS.—For purposes 
of this chapter, foreign-related deductions for any taxable 
year— 
‘‘(1) shall be taken into account for such tax-
able year only to the extent that such deductions are 
allocable to currently-taxed foreign income, and 
‘‘(2) to the extent not so allowed, shall be taken 
into account in subsequent taxable years as provided 
in subsection (b). 
Foreign-related deductions shall be allocated to currently- 
taxed foreign income in the same proportion which cur-
rently-taxed foreign income bears to the sum of currently- 
taxed foreign income and deferred foreign income. 
‘‘(b) DEDUCTIONS RELATED TO REPATRIATED DE-
FERRED FOREIGN INCOME.— 
‘‘(1) IN GENERAL.—If there is repatriated for-
eign income for a taxable year, the portion of the 
previously deferred deductions allocated to the repa-
triated foreign income shall be taken into account 
for the taxable year as a deduction allocated to in-
come from sources outside the United States. Any 
such amount shall not be included in foreign-related 
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deductions for purposes of applying subsection (a) to 
such taxable year. 
‘‘(2) PORTION OF PREVIOUSLY DEFERRED DE-
DUCTIONS.—For purposes of paragraph (1), the por-
tion of the previously deferred deductions allocated 
to repatriated foreign income is— 
‘‘(A) the amount which bears the same 
proportion to such deductions, as 
‘‘(B) the repatriated income bears to the 
previously deferred foreign income. 
‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur-
poses of this section— 
‘‘(1) FOREIGN-RELATED
DEDUCTIONS.—The 
term ‘foreign-related deductions’ means the total 
amount of deductions and expenses which would be 
allocated or apportioned to gross income from 
sources without the United States for the taxable 
year if both the currently-taxed foreign income and 
deferred foreign income were taken into account. 
‘‘(2) CURRENTLY-TAXED
FOREIGN
INCOME.— 
The term ‘currently-taxed foreign income’ means the 
amount of gross income from sources without the 
United States for the taxable year (determined with-
out regard to repatriated foreign income for such 
year). 
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‘‘(5) REPATRIATED
FOREIGN
INCOME.—The 
term ‘repatriated foreign income’ means the amount 
included in gross income on account of distributions 
out of previously deferred foreign income. 
‘‘(6) PREVIOUSLY
DEFERRED
DEDUCTIONS.— 
The term ‘previously deferred deductions’ means the 
aggregate amount of foreign-related deductions not 
taken into account under subsection (a) for all prior 
taxable years (determined as of the beginning of the 
taxable year), reduced by any amounts taken into 
account under subsection (b) for such prior taxable 
years. 
‘‘(7) 
TREATMENT
OF
CERTAIN
FOREIGN 
TAXES.— 
‘‘(A) PAID BY CONTROLLED FOREIGN COR-
PORATION.—Section 78 shall not apply for pur-
poses of determining currently-taxed foreign in-
come and deferred foreign income. 
‘‘(B) PAID BY TAXPAYER.—For purposes 
of determining currently-taxed foreign income, 
gross income from sources without the United 
States shall be reduced by the aggregate 
amount of taxes described in the applicable 
paragraph of section 901(b) which are paid by 
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the taxpayer (without regard to sections 902 
and 960) during the taxable year. 
‘‘(8) COORDINATION
WITH
SECTION
976.—In 
determining currently-taxed foreign income and de-
ferred foreign income, the amount of deemed foreign 
tax credits shall be determined with regard to sec-
tion 976. 
‘‘SEC. 976. AMOUNT OF FOREIGN TAXES COMPUTED ON 
OVERALL BASIS. 
‘‘(a) CURRENT YEAR ALLOWANCE.—For purposes of 
this chapter, the amount taken into account as foreign in-
come taxes for any taxable year shall be an amount which 
bears the same ratio to the total foreign income taxes for 
that taxable year as— 
‘‘(1) the currently-taxed foreign income for such 
taxable year, bears to 
‘‘(2) the sum of the currently-taxed foreign in-
come and deferred foreign income for such year. 
The portion of the total foreign income taxes for any tax-
able year not taken into account under the preceding sen-
tence for a taxable year shall only be taken into account 
as provided in subsection (b) (and shall not be taken into 
account for purposes of applying sections 902 and 960). 
‘‘(b) ALLOWANCE RELATED TO REPATRIATED DE-
FERRED FOREIGN INCOME.— 
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‘‘(1) IN GENERAL.—If there is repatriated for-
eign income for any taxable year, the portion of the 
previously deferred foreign income taxes paid or ac-
crued during such taxable year shall be taken into 
account for the taxable year as foreign taxes paid or 
accrued. Any such taxes so taken into account shall 
not be included in foreign income taxes for purposes 
of applying subsection (a) to such taxable year. 
‘‘(2) PORTION OF PREVIOUSLY DEFERRED FOR-
EIGN INCOME TAXES.—For purposes of paragraph 
(1), the portion of the previously deferred foreign in-
come taxes allocated to repatriated deferred foreign 
income is— 
‘‘(A) the amount which bears the same 
proportion to such taxes, as 
‘‘(B) the repatriated deferred income bears 
to the previously deferred foreign income. 
‘‘(c) DEFINITIONS AND SPECIAL RULE.—For pur-
poses of this section— 
‘‘(1) PREVIOUSLY DEFERRED FOREIGN INCOME 
TAXES.—The term ‘previously deferred foreign in-
come taxes’ means the aggregate amount of total 
foreign income taxes not taken into account under 
subsection (a) for all prior taxable years (determined 
as of the beginning of the taxable year), reduced by 
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any amounts taken into account under subsection 
(b) for such prior taxable years. 
‘‘(2) TOTAL
FOREIGN
INCOME
TAXES.—The 
term ‘total foreign income taxes’ means the sum of 
foreign income taxes paid or accrued during the tax-
able year (determined without regard to section 
904(c)) plus the increase in foreign income taxes 
that would be paid or accrued during the taxable 
year under sections 902 and 960 if— 
‘‘(A) all controlled foreign corporations 
were treated as one controlled foreign corpora-
tion, and 
‘‘(B) all earnings and profits of all con-
trolled foreign corporations were subpart F in-
come (as defined in section 952). 
‘‘(3) FOREIGN INCOME TAXES.—The term ‘for-
eign income taxes’ means any income, war profits, or 
excess profits taxes paid by the taxpayer to any for-
eign country or possession of the United States. 
‘‘(4) CURRENTLY-TAXED FOREIGN INCOME AND 
DEFERRED
FOREIGN
INCOME.—The terms ‘cur-
rently-taxed foreign income’ and ‘deferred foreign in-
come’ have the meanings given such terms by sec-
tion 975(c)). 
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‘‘SEC. 977. APPLICATION OF SUBPART. 
‘‘This subpart— 
‘‘(1) shall be applied before subpart A, and 
‘‘(2) shall be applied separately with respect to 
the categories of income specified in section 
904(d)(1).’’. 
(b) CLERICAL AMENDMENT.—The table of subparts 
for part III of subpart N of chapter 1 is amended by in-
serting after the item relating to subpart G the following 
new item: 
‘‘SUBPART H. SPECIAL RULES FOR ALLOCATION OF FOREIGN-RELATED 
DEDUCTIONS AND FOREIGN TAX CREDITS’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 302. EXCESS INCOME FROM TRANSFERS OF INTANGI-
BLES TO LOW-TAXED AFFILIATES TREATED 
AS SUBPART F INCOME. 
(a) IN GENERAL.—Subsection (a) of section 954 is 
amended by inserting after paragraph (3) the following 
new paragraph: 
‘‘(4) the foreign base company excess intangible 
income for the taxable year (determined under sub-
section (f) and reduced as provided in subsection 
(b)(5)), and’’. 
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(b) FOREIGN BASE COMPANY EXCESS INTANGIBLE 
INCOME.—Section 954 is amended by inserting after sub-
section (e) the following new subsection: 
‘‘(f) FOREIGN BASE COMPANY EXCESS INTANGIBLE 
INCOME.—For purposes of subsection (a)(4) and this sub-
section: 
‘‘(1) FOREIGN BASE COMPANY EXCESS INTAN-
GIBLE INCOME DEFINED.— 
‘‘(A) IN
GENERAL.—The term ‘foreign 
base company excess intangible income’ means, 
with respect to any covered intangible, the ex-
cess of— 
‘‘(i) the sum of— 
‘‘(I) gross income from the sale, 
lease, license, or other disposition of 
property in which such covered intan-
gible is used directly or indirectly, and 
‘‘(II) gross income from the pro-
vision of services related to such cov-
ered intangible or in connection with 
property in which such covered intan-
gible is used directly or indirectly, 
over 
‘‘(ii) 150 percent of the costs properly 
allocated and apportioned to the gross in-
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come taken into account under clause (i) 
other than expenses for interest and taxes 
and any expenses which are not directly al-
locable to such gross income. 
‘‘(B) SAME COUNTRY INCOME NOT TAKEN 
INTO ACCOUNT.—If— 
‘‘(i) the sale, lease, license, or other 
disposition of the property referred to in 
subparagraph (A)(i)(I) is for use, con-
sumption, or disposition in the country 
under the laws of which the controlled for-
eign corporation is created or organized, or 
‘‘(ii) the services referred to in sub-
paragraph (A)(i)(II) are performed in such 
country, 
the gross income from such sale, lease, license, 
or other disposition, or provision of services, 
shall not be taken into account under subpara-
graph (A)(i). 
‘‘(2) EXCEPTION BASED ON EFFECTIVE FOR-
EIGN INCOME TAX RATE.— 
‘‘(A) IN GENERAL.—Foreign base company 
excess intangible income shall not include the 
applicable percentage of any item of income re-
ceived by a controlled foreign corporation if the 
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taxpayer establishes to the satisfaction of the 
Secretary that such income was subject to an 
effective rate of income tax imposed by a for-
eign country in excess of 5 percent. 
‘‘(B) 
APPLICABLE
PERCENTAGE.—For 
purposes of subparagraph (A), the term ‘appli-
cable percentage’ means the ratio (expressed as 
a percentage), not greater than 100 percent, 
of— 
‘‘(i) the number of percentage points 
by which the effective rate of income tax 
referred to in subparagraph (A) exceeds 5 
percentage points, over 
‘‘(ii) 10 percentage points. 
‘‘(C) TREATMENT OF LOSSES IN DETER-
MINING EFFECTIVE RATE OF FOREIGN INCOME 
TAX.—For purposes of determining the effective 
rate of income tax imposed by any foreign 
country— 
‘‘(i) such effective rate shall be deter-
mined without regard to any losses carried 
to the relevant taxable year, and 
‘‘(ii) to the extent the income with re-
spect to such intangible reduces losses in 
the relevant taxable year, such effective 
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rate shall be treated as being the effective 
rate which would have been imposed on 
such income without regard to such losses. 
‘‘(3) COVERED
INTANGIBLE.—The term ‘cov-
ered intangible’ means, with respect to any con-
trolled foreign corporation, any intangible property 
(as defined in section 936(h)(3)(B))— 
‘‘(A) which is sold, leased, licensed, or oth-
erwise transferred (directly or indirectly) to 
such controlled foreign corporation from a re-
lated person, or 
‘‘(B) with respect to which such controlled 
foreign corporation and one or more related 
persons has (directly or indirectly) entered into 
any shared risk or development agreement (in-
cluding any cost sharing agreement). 
‘‘(4) RELATED
PERSON.—The term ‘related 
person’ has the meaning given such term in sub-
section (d)(3).’’. 
(c) SEPARATE BASKET FOR FOREIGN TAX CRED-
IT.—Subsection (d) of section 904 is amended by redesig-
nating paragraph (7) as paragraph (8) and by inserting 
after paragraph (6) the following new paragraph: 
‘‘(7) SEPARATE
APPLICATION
TO
FOREIGN 
BASE COMPANY EXCESS INTANGIBLE INCOME.— 
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‘‘(A) IN GENERAL.—Subsections (a), (b), 
and (c) of this section and sections 902, 907, 
and 960 shall be applied separately with respect 
to each item of income which is taken into ac-
count under section 954(a)(4) as foreign base 
company excess intangible income. 
‘‘(B) REGULATIONS.—The Secretary may 
issue such regulations or other guidance as is 
necessary or appropriate to carry out the pur-
poses of this subsection, including regulations 
or other guidance which provides that related 
items of income may be aggregated for pur-
poses of this paragraph.’’. 
(d) CONFORMING AMENDMENTS.— 
(1) Paragraph (4) of section 954(b) is amended 
by inserting ‘‘foreign base company excess intangible 
income described in subsection (a)(4) or’’ before 
‘‘foreign base company oil-related income’’ in the 
last sentence thereof. 
(2) Subsection (b) of section 954 is amended by 
adding at the end the following new paragraph: 
‘‘(7) FOREIGN BASE COMPANY EXCESS INTAN-
GIBLE INCOME NOT TREATED AS ANOTHER KIND OF 
BASE COMPANY INCOME.—Income of a corporation 
which is foreign base company excess intangible in-
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come shall not be considered foreign base company 
income of such corporation under paragraph (2), 
(3), or (5) of subsection (a).’’. 
(e) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
the date of the enactment of this Act. 
SEC. 303. LIMITATIONS ON INCOME SHIFTING THROUGH IN-
TANGIBLE PROPERTY TRANSFERS. 
(a) CLARIFICATION OF DEFINITION OF INTANGIBLE 
ASSET.—Clause (vi) of section 936(h)(3)(B) is amended 
by inserting ‘‘(including any section 197 intangible de-
scribed in subparagraph (A), (B), or (C)(i) of subsection 
(d)(1) of such section)’’ after ‘‘item’’. 
(b) CLARIFICATION
OF
ALLOWABLE
VALUATION 
METHODS.— 
(1) FOREIGN
CORPORATIONS.—Paragraph (2) 
of section 367(d) is amended by adding at the end 
the following new subparagraph: 
‘‘(D) REGULATORY AUTHORITY.—For pur-
poses of the last sentence of subparagraph (A), 
the Secretary may require— 
‘‘(i) the valuation of transfers of in-
tangible property on an aggregate basis, or 
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‘‘(ii) the valuation of such a transfer 
on the basis of the realistic alternatives to 
such a transfer, 
in any case in which the Secretary determines 
that such basis is the most reliable means of 
valuation of such transfers.’’. 
(2) ALLOCATION AMONG TAXPAYERS.—Section 
482 is amended by adding at the end the following: 
‘‘For purposes of the preceding sentence, the Sec-
retary may require the valuation of transfers of in-
tangible property on an aggregate basis or the valu-
ation of such a transfer on the basis of the realistic 
alternatives to such a transfer, in any case in which 
the Secretary determines that such basis is the most 
reliable means of valuation of such transfers.’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—The amendments made by 
this section shall apply to transfers in taxable years 
beginning after the date of the enactment of this 
Act. 
(2) NO INFERENCE.—Nothing in the amend-
ment made by subsection (a) shall be construed to 
create any inference with respect to the application 
of section 936(h)(3) of the Internal Revenue Code of 
1986, or the authority of the Secretary of the Treas-
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ury to provide regulations for such application, on or 
before the date of the enactment of such amend-
ment. 
SEC. 304. REPEAL OF CHECK-THE-BOX RULES FOR CERTAIN 
FOREIGN ENTITIES AND CFC LOOK-THRU 
RULES. 
(a) CHECK-THE-BOX RULES.—Paragraph (3) of sec-
tion 7701(a) is amended— 
(1) by striking ‘‘and’’, and 
(2) by inserting after ‘‘insurance companies’’ 
the following: ‘‘, and any foreign business entity 
that— 
‘‘(A) has a single owner that does not have 
limited liability, or 
‘‘(B) has one or more members all of 
which have limited liability’’. 
(b) LOOK-THRU RULE.—Subparagraph (C) of sec-
tion 954(c)(6) is amended to read as follows: 
‘‘(C) TERMINATION.—Subparagraph (A) 
shall not apply to dividends, interest, rents, and 
royalties received or accrued after the date of 
the enactment of the Stop Tax Haven Abuse 
Act.’’. 
(c) EFFECTIVE DATE.— 
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(1) The amendments made by subsection (a) 
shall take effect on the date of the enactment of this 
Act. 
(2) The amendment made by subsection (b) 
shall apply to payments received after the date of 
the enactment of this Act. 
SEC. 305. RESTRICTIONS ON DEDUCTION FOR INTEREST 
EXPENSE OF MEMBERS OF FINANCIAL RE-
PORTING GROUPS WITH EXCESS DOMESTIC 
INDEBTEDNESS. 
(a) IN GENERAL.—Section 163 is amended by redes-
ignating subsection (n) as subsection (o) and by inserting 
after subsection (m) the following new subsection: 
‘‘(n) RESTRICTION ON DEDUCTION FOR INTEREST 
EXPENSE
OF
MEMBERS
OF
FINANCIAL
REPORTING 
GROUPS WITH EXCESS DOMESTIC INDEBTEDNESS.— 
‘‘(1) IN GENERAL.—In the case of any corpora-
tion which is a member of an applicable financial re-
porting group the common parent of which is a for-
eign corporation, the deduction allowed under this 
chapter for interest paid or accrued by the corpora-
tion during the taxable year shall not exceed the ap-
plicable limitation for the taxable year. 
‘‘(2) CARRYFORWARD.—Any amount disallowed 
under paragraph (1) for any taxable year shall be 
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treated as interest paid or accrued in the succeeding 
taxable year. 
‘‘(3) APPLICABLE LIMITATION.—For purposes 
of this subsection— 
‘‘(A) IN GENERAL.—The applicable limita-
tion with respect to a taxpayer for any taxable 
year is the sum of— 
‘‘(i) the greater of— 
‘‘(I) 
the 
taxpayer’s 
allocable 
share of the applicable financial re-
porting group’s net interest expense 
for the taxable year, or 
‘‘(II) 10 percent of the taxpayer’s 
adjusted taxable income for the tax-
able year, plus 
‘‘(ii) the excess limitation carryfor-
wards to the taxable year from any pre-
ceding taxable year. 
‘‘(B) LIMITATION
NOT
LESS
THAN
IN-
CLUDIBLE
INTEREST.—The applicable limita-
tion under subparagraph (A) for any taxable 
year shall not be less than the amount of inter-
est includible in the gross income of the tax-
payer for the taxable year. 
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‘‘(C) 
EXCESS
LIMITATION 
CARRYFORWARD.—If the applicable limitation 
of a taxpayer for any taxable year (determined 
without regard to carryforwards under subpara-
graph (A)(ii)) exceeds the interest paid or ac-
crued by the taxpayer during the taxable year, 
such excess shall be an excess limitation 
carryforward to the 1st succeeding taxable year 
and the 2nd and 3rd succeeding taxable years 
to the extent not previously taken into account 
under this paragraph. 
‘‘(4) ALLOCABLE SHARE OF NET INTEREST EX-
PENSE.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—A taxpayer’s allocable 
share of an applicable financial reporting 
group’s net interest expense for any taxable 
year shall be the amount (not less than zero) 
which bears the same ratio to such net interest 
expense as— 
‘‘(i) the net earnings of the taxpayer, 
bears to 
‘‘(ii) the aggregate net earnings of all 
members of the applicable financial report-
ing group. 
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‘‘(B) NET
EARNINGS.—The term ‘net 
earnings’ means, with respect to any taxpayer, 
the earnings of the taxpayer— 
‘‘(i) computed without regard to any 
reduction allowable for— 
‘‘(I) net interest expense, 
‘‘(II) taxes, or 
‘‘(III) depreciation, amortization, 
or depletion, and 
‘‘(ii) computed with such other adjust-
ments as the Secretary may by regulations 
prescribe. 
‘‘(C) BURDEN ON TAXPAYER.—If a tax-
payer elects not to compute its allocable share, 
or fails to establish to the satisfaction of the 
Secretary the amount of its allocable share, for 
any taxable year, the allocable share shall be 
zero. 
‘‘(5) NET INTEREST EXPENSE AND NET EARN-
INGS DETERMINATIONS.—For purposes of this sub-
section— 
‘‘(A) NET INTEREST EXPENSE.—Any de-
termination of net interest expense for any tax-
able year shall be made— 
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‘‘(i) on the basis of the applicable fi-
nancial statement of the applicable finan-
cial reporting group for the last financial 
reporting year ending with or within the 
taxable year, and 
‘‘(ii) under United States tax prin-
ciples. 
‘‘(B) NET EARNINGS.—Any determination 
of net earnings for any taxable year shall be 
made on the basis of the applicable financial 
statement of the applicable financial reporting 
group for the last financial reporting year end-
ing with or within the taxable year. 
‘‘(C) 
APPLICABLE
FINANCIAL
STATE-
MENT.—The term ‘applicable financial state-
ment’ means a statement for financial reporting 
purposes which is made on the basis of— 
‘‘(i) generally accepted accounting 
principles, 
‘‘(ii) international financial reporting 
standards, or 
‘‘(iii) any other method specified by 
the Secretary in regulations. 
A statement under clause (ii) or (iii) may be 
used as an applicable financial statement by a 
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group only if there is no statement of the group 
under any preceding clause. 
‘‘(6) 
APPLICABLE
FINANCIAL
REPORTING 
GROUP.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The term ‘applicable 
financial reporting group’ means, with respect 
to any corporation, a group of which such cor-
poration is a member and which files an appli-
cable financial statement. 
‘‘(B) EXCEPTION FOR GROUPS WITH MINI-
MAL
DOMESTIC
NET
INTEREST
EXPENSE.— 
Such term shall not include a group if the ag-
gregate net interest expense for which a deduc-
tion is allowable to all members of the group 
under this chapter (determined without regard 
to this subsection or any other limitation on de-
ductibility of interest under this chapter) is less 
than $5,000,000. 
‘‘(C) EXCEPTION FOR CERTAIN FINANCIAL 
ENTITIES.—A corporation which is described in 
section 864(f)(4)(B), or is treated as described 
in section 864(f)(4)(B) by reason of paragraph 
(4)(C) or (5)(A) of section 864(f) (without re-
gard to whether an election is made under such 
paragraph (5)(A)), shall not be treated as a 
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