CLAMP Act

Bill: 114-s-3268
Sponsor: full_name: Sen. Carper, Thomas R. [D-DE]
Introduced: 2016-07-14
Policy area: Taxation
Latest action: action_date: 2016-07-14
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2016-07-14
action_desc: Introduced in Senate
text: <p><b>Closing Loopholes Against Money-Laundering Practices Act or the CLAMP Act </b></p> <p>This bill amends the Internal Revenue Code to require U.S. entities to obtain and have an employer identification number (EIN) assigned by the Internal Revenue Service (IRS). </p> <p>The bill defines a &quot;U.S. entity&quot; as any business entity created or organized in the United States or under the laws of the United States or of a U.S. state, possession, or territory. The term excludes tax-exempt organizations. </p> <p>The bill establishes: (1) civil penalties for the failure to have an EIN or provide required information, and (2) a criminal penalty for the willful failure to obtain an EIN. </p> <p>The IRS may disclose to federal law enforcement officials taxpayer identify information, including an EIN and information from an application for an EIN, for use in investigations and prosecutions of specified offenses related to money laundering and supporting or financing terrorism.</p> <p>Prior to disclosing the information, the IRS must determine that the disclosure would not seriously impair federal tax administration and consider whether the information requested: (1) is being sought exclusively for use in a federal criminal investigation or proceeding pertaining to the specified offense, (2) is or may be relevant to a matter relating to the offense, and (3) cannot be reasonably obtained from any other source. </p>

tv_txt: II 114th CONGRESS 2d Session S. 3268 IN THE SENATE OF THE UNITED STATES July 14, 2016 Mr. Carper (for himself, Mr. Coons , and Mr. Heller ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to require all United States entities to have an employer identification number issued by the Secretary of the Treasury, and for other purposes.

1. Short title This Act may be cited as the Closing Loopholes Against Money-Laundering Practices Act or the CLAMP Act . 2. Requirement of EIN for United States entities (a) In general Section 6109 of the Internal Revenue Code of 1986 is amended by inserting after subsection (d) the following new subsection: (e) Requirement of EIN for United States entities (1) In general Except as otherwise determined by the Secretary, every United States entity shall obtain and have an employer identification number assigned by the Secretary. (2) Definitions For purposes of this subsection— (A) United States entity Except as may be provided by regulations, the term United States entity means any business entity created or organized in the United States or under the law of the United States or of a State, possession, or territory of the United States. (B) Exception The term United States entity does not include any organization which is exempt from taxation under section 501(a). (C) United States The term United States includes the States, the District of Columbia, and the possessions and territories of the United States. (3) Time and manner of application The Secretary shall set forth the time and manner for a United States entity that does not have an employer identification number to obtain such a number. . (b) Civil penalty (1) In general Part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 6720D. Penalty for failures relating to employer identification numbers (a) Failure To have an identifying number (1) In general Any United States entity (as defined in section 6109(e)(2)(A)) that fails to obtain an employer identification number in accordance with section 6109(e)(1) shall pay a penalty of $10,000. (2) Joint and several liability Notwithstanding section 6671(a), if a United States entity does not pay a penalty assessed under paragraph (1) within 60 days after the date of the notice and demand for payment, any person who is treated as a responsible party with respect to such entity at any time during the period beginning on the date the entity was required to obtain such number and ending on the date that is 60 days after the date of the notice and demand for payment shall be jointly and severally liable with the entity for such penalty. (b) Failure To provide required information (1) In general Any person who fails to provide information required by the Secretary under section 6109(c) (including updating previously submitted information as the Secretary may require by regulations) shall pay a penalty of $100 for each such failure. (2) Intentional failures In the case of a failure that the Secretary determines to be intentional, paragraph (1) shall be applied by substituting $1,000 for $100 . For purposes of the preceding sentence, a pattern of failing to provide or update information shall be treated as intentional failure. (3) Joint and several liability Notwithstanding section 6671(a), if any United States entity (as defined in section 6109(e)(2)(A)) does not pay a penalty assessed under paragraph (1) within 60 days after the date of the notice and demand for payment, any person who at any time during the period beginning on the date the entity was required to provide the information under paragraph (1) and ending on the date that is 60 days after the date of the notice and demand for payment is treated as a responsible party with respect to such entity shall be jointly and severally liable with such entity for such penalty. (4) Coordination with subsection (a) No penalty shall be imposed under this subsection for any taxable year with respect to which a penalty is imposed under subsection (a) on the same entity. (c) Reasonable cause No penalty shall apply under subsection (a) or (b) if it is shown that the failure to satisfy the requirements of section 6109(e) or 6109(c), as the case may be, is due to reasonable cause and not due to willful neglect. . (2) Clerical amendment The table of sections for part I of subchapter B of chapter 68 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 6720D. Penalty for failures relating to employer identification numbers. . (c) Criminal penalty (1) In general Part I of subchapter A of chapter 75 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section: 7218. Willful failure to obtain an employer identification number Any person who willfully attempts in any manner to evade or defeat the employer identification number requirement of section 6109(e) or any regulations thereunder for the purpose of hiding the existence of an entity or the identity of its responsible party shall, in addition to any other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution. . (2) Clerical amendment The table of sections for part I of subchapter A of chapter 75 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 7218. Willful failure to obtain an employer identification number. . (d) Effective date (1) In general Except as provided in paragraph (2), the amendment made by subsection (a) shall apply to United States entities (as defined in section 6109(e)(2)(A) of the Internal Revenue Code of 1986) formed on or after the date that is 180 days after the date of the enactment of this Act. (2) Application to existing United States entities With respect to United States entities (as so defined) in existence on the day before the date specified in paragraph (1), the amendment made by subsection (a) shall take effect on the date that is 3 years after the date of the enactment of this Act. (3) Issuance of identifying numbers with respect to existing entities Not later than the date that is 3 years after the date of the enactment of this Act, the Secretary of the Treasury shall provide a method for all United States entities (as so defined) to whom paragraph (1) does not apply to obtain an identifying number under section 6109(e) of such Code, and shall assign such an identifying number to each such entity. (4) Penalties With respect to a United States entity (as so defined), the amendments made by subsections (b) and (c) shall apply to failures after the date described in paragraph (1) or (2), whichever is applicable. 3. Disclosure of responsible party identity for use in anti-money laundering and counterterrorism investigations and prosecutions (a) In general Subsection (i) of section 6103 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph: (9) Disclosure upon request of responsible party identity for use in anti-money laundering and counterterrorism investigations and prosecutions (A) In general Except as provided in paragraph (6), after taking into consideration the factors described in subparagraph (B), the Secretary may disclose, upon written request, to the individuals described in subparagraph (C) taxpayer identity information consisting of— (i) the name and employer identification number of the specific entity to whom the request relates, (ii) the name and identifying number, and any available contact information, of the responsible party and any third-party designee reflected on the entity's application for an employer identification number, and (iii) any trade name, other addresses, entity type, or principal activity of the business reflected on such application, but only to the extent such information was included on the entity's application for an employer identification number pursuant to the requirements of section 6109(e) or any predecessor provision or program, and to the extent the Secretary determines such disclosure would not seriously impair Federal tax administration. (B) Factors for consideration The factors described in this subparagraph are whether the information requested in such written request— (i) is being sought exclusively for use in a Federal criminal investigation or proceeding pertaining to offenses described in clause (i) or (ii) of subparagraph (C), (ii) is or may be relevant to a matter relating to such an offense, and (iii) cannot be reasonably obtained, taking into account all relevant circumstances, from any other source. (C) Individuals described For purposes of subparagraph (A), the individuals described in this paragraph are officers and employees of any Federal law enforcement agency who are personally and directly engaged in the investigation, response, or analysis, or in any judicial, administrative, or grand jury proceedings, pertaining to offenses under— (i) section 1956, 1957, 1960, 2339A, 2339B, or 2339C of title 18, United States Code, or (ii) subchapter II of chapter 53 of title 31, United States Code. . (b) Conforming amendments (1) Paragraph (6) of section 6103 (i) of the Internal Revenue Code of 1986 is amended by striking or (8) and inserting (8), or (9) . (2) Paragraph (4) of section 6103(p) of such Code is amended— (A) by striking (5), or (7) and inserting (5), (7), or (9) , and (B) by striking (5) or (7) and inserting (5), (7), or (9) . (c) Effective date The amendments made by this section shall apply to disclosures made after the date of the enactment of this Act.