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SEC. 547. LAUNDERING OF MONETARY INSTRUMENTS.
Section 1956(c)(7) of title 18, United States Code, is
amended by adding at the end the following new subpara-
graph:
‘‘(F) Any act or activity constituting an of-
fense involving a Federal health care offense as
that term is defined in section 982(a)(6)(B) of
this title.’’.
SEC. 548. AUTHORIZED INVESTIGATIVE DEMAND PROCE-
DURES.
(a) IN GENERAL.—Chapter 233 of title 18, United
States Code, is amended by adding after section 3485 the
following new section:
‘‘§ 3486. Authorized investigative demand procedures
‘‘(a)(1)(A) In any investigation relating to functions
set forth in paragraph (2), the Attorney General or designee
may issue in writing and cause to be served a subpoena
compelling production of any records (including any books,
papers, documents, electronic media, or other objects or tan-
gible things), which may be relevant to an authorized law
enforcement inquiry, that a person or legal entity may pos-
sess or have care, custody, or control.
‘‘(B) A custodian of records may be required to give
testimony concerning the production and authentication of
such records.
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‘‘(C) The production of records may be required from
any place in any State or in any territory or other place
subject to the jurisdiction of the United States at any des-
ignated place; except that such production shall not be re-
quired more than 500 miles distant from the place where
the subpoena is served.
‘‘(D) Witnesses summoned under this section shall be
paid the same fees and mileage that are paid witnesses in
the courts of the United States.
‘‘(E) A subpoena requiring the production of records
shall describe the objects required to be produced and pre-
scribe a return date within a reasonable period of time
within which the objects can be assembled and made avail-
able.
‘‘(2) Investigative demands utilizing an administra-
tive subpoena are authorized for any investigation with re-
spect to any act or activity constituting or involving health
care fraud, including a scheme or artifice—
‘‘(A) to defraud any health care program, in
connection with the delivery of or payment for health
care benefits, items, or services; or
‘‘(B) to obtain, by means of false or fraudulent
pretenses, representations, or promises, any of the
money or property owned by, or under the custody or
control of, any health care program in connection
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with the delivery of or payment for health care bene-
fits, items, or services.
‘‘(b)(1) A subpoena issued under this section may be
served by any person designated in the subpoena to serve
it.
‘‘(2) Service upon a natural person may be made by
personal delivery of the subpoena to such person.
‘‘(3) Service may be made upon a domestic or foreign
association which is subject to suit under a common name,
by delivering the subpoena to an officer, to a managing or
general agent, or to any other agent authorized by appoint-
ment or by law to receive service of process.
‘‘(4) The affidavit of the person serving the subpoena
entered on a true copy thereof by the person serving it shall
be proof of service.
‘‘(c)(1) In the case of contumacy by or refusal to obey
a subpoena issued to any person, the Attorney General may
invoke the aid of any court of the United States within the
jurisdiction of which the investigation is carried on or of
which the subpoenaed person is an inhabitant, or in which
such person carries on business or may be found, to compel
compliance with the subpoena.
‘‘(2) The court may issue an order requiring the sub-
poenaed person to appear before the Attorney General to
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produce records, if so ordered, or to give testimony required
under subsection (a)(1)(B).
‘‘(3) Any failure to obey the order of the court may
be punished by the court as a contempt thereof.
‘‘(4) All process in any such case may be served in
any judicial district in which such person may be found.
‘‘(d) Notwithstanding any Federal, State, or local law,
any person, including officers, agents, and employees, re-
ceiving a subpoena under this section, who complies in good
faith with the subpoena and thus produces the materials
sought, shall not be liable in any court of any State or the
United States to any customer or other person for such pro-
duction or for nondisclosure of that production to the cus-
tomer.
‘‘(e)(1) Health information about an individual that
is disclosed under this section may not be used in, or dis-
closed to any person for use in, any administrative, civil,
or criminal action or investigation directed against the in-
dividual who is the subject of the information unless the
action or investigation arises out of and is directly related
to receipt of health care or payment for health care or action
involving a fraudulent claim related to health; or if author-
ized by an appropriate order of a court of competent juris-
diction, granted after application showing good cause there-
for.
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‘‘(2) In assessing good cause, the court shall weigh the
public interest and the need for disclosure against the in-
jury to the patient, to the physician-patient relationship,
and to the treatment services.
‘‘(3) Upon the granting of such order, the court, in
determining the extent to which any disclosure of all or any
part of any record is necessary, shall impose appropriate
safeguards against unauthorized disclosure.’’.
(b) CLERICAL AMENDMENT.—The table of sections for
chapter 223 of title 18, United States Code, is amended by
inserting after the item relating to section 3405 the follow-
ing new item:
‘‘3486. Authorized investigative demand procedures.’’.
(c) 
CONFORMING
AMENDMENT.—Section
1510(b)(3)(B) of title 18, United States Code, is amended
by inserting ‘‘or a Department of Justice subpoena (issued
under section 3486),’’ after ‘‘subpoena’’.
TITLE VI—INTERNAL REVENUE
CODE AND OTHER PROVISIONS
SEC. 600. REFERENCES.
Except as otherwise expressly provided, whenever in
this title an amendment or repeal is expressed in terms of
an amendment to, or repeal of, a section or other provision,
the reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.
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Subtitle A—Foreign Trust Tax
Compliance
SEC. 601. IMPROVED INFORMATION REPORTING ON FOR-
EIGN TRUSTS.
(a) IN GENERAL.—Section 6048 (relating to returns
as to certain foreign trusts) is amended to read as follows:
‘‘SEC. 6048. INFORMATION WITH RESPECT TO CERTAIN FOR-
EIGN TRUSTS.
‘‘(a) NOTICE OF CERTAIN EVENTS.—
‘‘(1) GENERAL RULE.—On or before the 90th day
(or such later day as the Secretary may prescribe)
after any reportable event, the responsible party shall
provide written notice of such event to the Secretary
in accordance with paragraph (2).
‘‘(2) CONTENTS OF NOTICE.—The notice required
by paragraph (1) shall contain such information as
the Secretary may prescribe, including—
‘‘(A) the amount of money or other property
(if any) transferred to the trust in connection
with the reportable event, and
‘‘(B) the identity of the trust and of each
trustee and beneficiary (or class of beneficiaries)
of the trust.
‘‘(3) REPORTABLE EVENT.—For purposes of this
subsection—
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‘‘(A) IN
GENERAL.—The term ‘reportable
event’ means—
‘‘(i) the creation of any foreign trust
by a United States person,
‘‘(ii) the transfer of any money or
property (directly or indirectly) to a foreign
trust by a United States person, including
a transfer by reason of death, and
‘‘(iii) the death of a citizen or resident
of the United States if—
‘‘(I) the decedent was treated as
the owner of any portion of a foreign
trust under the rules of subpart E of
part I of subchapter J of chapter 1, or
‘‘(II) any portion of a foreign
trust was included in the gross estate
of the decedent.
‘‘(B) EXCEPTIONS.—
‘‘(i) FAIR
MARKET
VALUE
SALES.—
Subparagraph (A)(ii) shall not apply to
any transfer of property to a trust in ex-
change for consideration of at least the fair
market value of the transferred property.
For purposes of the preceding sentence, con-
sideration other than cash shall be taken
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into account at its fair market value and
the rules of section 679(a)(3) shall apply.
‘‘(ii) DEFERRED
COMPENSATION
AND
CHARITABLE
TRUSTS.—Subparagraph (A)
shall not apply with respect to a trust
which is—
‘‘(I) described in section 402(b),
404(a)(4), or 404A, or
‘‘(II) determined by the Secretary
to be described in section 501(c)(3).
‘‘(4) RESPONSIBLE PARTY.—For purposes of this
subsection, the term ‘responsible party’ means—
‘‘(A) the grantor in the case of the creation
of an inter vivos trust,
‘‘(B) the transferor in the case of a report-
able event described in paragraph (3)(A)(ii)
other than a transfer by reason of death, and
‘‘(C) the executor of the decedent’s estate in
any other case.
‘‘(b) UNITED STATES GRANTOR OF FOREIGN TRUST.—
‘‘(1) IN GENERAL.—If, at any time during any
taxable year of a United States person, such person
is treated as the owner of any portion of a foreign
trust under the rules of subpart E of part I of sub-
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chapter J of chapter 1, such person shall be respon-
sible to ensure that—
‘‘(A) such trust makes a return for such
year which sets forth a full and complete ac-
counting of all trust activities and operations for
the year, the name of the United States agent for
such trust, and such other information as the
Secretary may prescribe, and
‘‘(B) such trust furnishes such information
as the Secretary may prescribe to each United
States person (i) who is treated as the owner of
any portion of such trust or (ii) who receives
(directly or indirectly) any distribution from the
trust.
‘‘(2) TRUSTS
NOT
HAVING
UNITED
STATES
AGENT.—
‘‘(A) IN
GENERAL.—If the rules of this
paragraph apply to any foreign trust, the deter-
mination of amounts required to be taken into
account with respect to such trust by a United
States person under the rules of subpart E of
part I of subchapter J of chapter 1 shall be de-
termined by the Secretary.
‘‘(B) UNITED STATES AGENT REQUIRED.—
The rules of this paragraph shall apply to any
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foreign trust to which paragraph (1) applies un-
less such trust agrees (in such manner, subject to
such conditions, and at such time as the Sec-
retary shall prescribe) to authorize a United
States person to act as such trust’s limited agent
solely for purposes of applying sections 7602,
7603, and 7604 with respect to—
‘‘(i) any request by the Secretary to ex-
amine records or produce testimony related
to the proper treatment of amounts required
to be taken into account under the rules re-
ferred to in subparagraph (A), or
‘‘(ii) any summons by the Secretary
for such records or testimony.
The appearance of persons or production of
records by reason of a United States person
being such an agent shall not subject such per-
sons or records to legal process for any purpose
other than determining the correct treatment
under this title of the amounts required to be
taken into account under the rules referred to in
subparagraph (A). A foreign trust which ap-
points an agent described in this subparagraph
shall not be considered to have an office or a per-
manent establishment in the United States, or to
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be engaged in a trade or business in the United
States, solely because of the activities of such
agent pursuant to this subsection.
‘‘(C) OTHER RULES TO APPLY.—Rules simi-
lar to the rules of paragraphs (2) and (4) of sec-
tion 6038A(e) shall apply for purposes of this
paragraph.
‘‘(c) REPORTING BY UNITED STATES BENEFICIARIES
OF FOREIGN TRUSTS.—
‘‘(1) IN GENERAL.—If any United States person
receives (directly or indirectly) during any taxable
year of such person any distribution from a foreign
trust, such person shall make a return with respect to
such trust for such year which includes—
‘‘(A) the name of such trust,
‘‘(B) the aggregate amount of the distribu-
tions so received from such trust during such
taxable year, and
‘‘(C) such other information as the Sec-
retary may prescribe.
‘‘(2) INCLUSION
IN
INCOME
IF
RECORDS
NOT
PROVIDED.—
‘‘(A) IN GENERAL.—If adequate records are
not provided to the Secretary to determine the
proper treatment of any distribution from a for-
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eign trust, such distribution shall be treated as
an accumulation distribution includible in the
gross income of the distributee under chapter 1.
To the extent provided in regulations, the preced-
ing sentence shall not apply if the foreign trust
elects to be subject to rules similar to the rules
of subsection (b)(2)(B).
‘‘(B) APPLICATION OF ACCUMULATION DIS-
TRIBUTION
RULES.—For purposes of applying
section 668 in a case to which subparagraph (A)
applies, the applicable number of years for pur-
poses of section 668(a) shall be 1⁄2 of the number
of years the trust has been in existence.
‘‘(d) SPECIAL RULES.—
‘‘(1) DETERMINATION
OF
WHETHER
UNITED
STATES PERSON RECEIVES DISTRIBUTION.—For pur-
poses of this section, in determining whether a United
States person receives a distribution from a foreign
trust, the fact that a portion of such trust is treated
as owned by another person under the rules of sub-
part E of part I of subchapter J of chapter 1 shall
be disregarded.
‘‘(2) DOMESTIC TRUSTS WITH FOREIGN ACTIVI-
TIES.—To the extent provided in regulations, a trust
which is a United States person shall be treated as