Stop Tax Haven Abuse Act

Bill: 112-s-1346
Sponsor: Sen. Levin, Carl [D-MI]
Introduced: 2011-07-12 in the Senate
Policy area: Taxation
Subjects: Accounting and auditing
Administrative law and regulatory procedures
Administrative remedies
Bank accounts, deposits, capital
Banking and financial institutions regulation
Civil actions and liability
Congressional oversight
Corporate finance and management
Credit and credit markets
Department of the Treasury
Evidence and witnesses
Financial services and investments
Foreign and international banking
Foreign and international corporations
Fraud offenses and financial crimes
Jurisdiction and venue
Lawyers and legal services
Legal fees and court costs
Securities
Securities and Exchange Commission (SEC)
Tax administration and collection, taxpayers
Taxation of foreign income

Summary:
action_date: 2011-07-12
text: 
Stop Tax Haven Abuse Act - Authorizes the Secretary of the Treasury to impose restrictions on foreign jurisdictions or financial institutions operating in the United States that are of prime money laundering concern or that impede U.S. tax enforcement. 
 
Amends the Internal Revenue Code to: (1) establish a rebuttable presumption against the validity of transactions by institutions that do not comply with reporting requirements under the Foreign Account Tax Compliance Act (FATCA), (2) treat certain foreign corporations managed and controlled primarily in the United States as domestic corporations for tax purposes, (3) require tax withholding agents and financial institutions to report certain information about beneficial owners of foreign-owned financial accounts, (4) treat credit default swap payments sent offshore as taxable U.S. source income, (5) allow the use of tax return information to evaluate foreign financial account reports, (6) increase penalties for promoting abusive tax shelters and for aiding and abetting the understatement of tax liability, (7) prohibit tax advisor contingent fee agreements for obtaining a tax savings or benefit, and (8) impose additional requirements for third party summonses used to obtain information in tax investigations that do not identify the person with respect to whose liability the summons is issued (i.e., John Doe summons). 
 
Amends the Securities Exchange Act of 1934 to: (1) require corporations registered with the Securities and Exchange Commission (SEC) to report annually, on a country-by country basis, on employees, sales, financing, tax obligations, and tax payments; and (2) authorize a fine of up to $1 million for failure to disclose any holding or transaction involving equity or debt instruments known to involve a foreign entity that would otherwise be subject to disclosure requirements. 
 
Requires the Secretary to publish a proposed rule in the Federal Register requiring unregistered investment companies, including hedge funds or private equity funds, to establish anti-money laundering programs and submit suspicious activity reports. 
 
Extends anti-money laundering requirements to persons engaged in the business of forming new businesses or other legal entities.
 
Requires federal banking agencies and the SEC to develop examination techniques to detect and prevent abusive tax shelter activities or the aiding or abetting of tax evasion by financial institutions. 
 
Requires the Secretary to: (1) disclose tax return information to federal financial regulators for purposes of tax shelter investigations; (2) disclose to Congress documents relating to a determination to grant, deny, revoke, or restore the tax-exempt status of an organization; and (3) expand the standards applicable to tax practitioners for issuing written advice on transactions which have a potential for tax avoidance or evasion. 


Legislative actions:
action_date: 2011-07-12
text: Read twice and referred to the Committee on Finance.
action_date: 2011-07-12
text: Sponsor introductory remarks on measure. (CR S4518-4527)
action_date: 2011-07-12
text: Introduced in Senate