		I
		112th CONGRESS
		1st Session
		H. R. 2669
		IN THE HOUSE OF REPRESENTATIVES

			July 27, 2011
			Mr. Doggett (for
			 himself, Mr. Levin,
			 Mr. Larson of Connecticut,
			 Ms. DeLauro,
			 Mr. Van Hollen,
			 Mr. George Miller of California,
			 Mr. Blumenauer,
			 Mr. McDermott,
			 Mr. Lewis of Georgia,
			 Ms. Berkley,
			 Mr. Stark,
			 Mr. Pascrell,
			 Mr. Welch,
			 Ms. Slaughter,
			 Mr. Dingell,
			 Mr. Yarmuth,
			 Ms. Linda T. Sánchez of California,
			 Mr. Conyers,
			 Ms. Schakowsky,
			 Mr. Davis of Illinois,
			 Mr. McGovern,
			 Mr. Filner,
			 Mr. Gene Green of Texas,
			 Mr. Hinchey,
			 Mr. Grijalva,
			 Ms. Hirono,
			 Mr. Johnson of Georgia,
			 Ms. Lee of California,
			 Ms. Moore,
			 Mr. Tierney,
			 Ms. Kaptur,
			 Ms. Eddie Bernice Johnson of Texas,
			 Mr. DeFazio,
			 Mr. Tonko,
			 Mr. Sherman,
			 Ms. Jackson Lee of Texas,
			 Mr. Peters,
			 Mr. Rush, Mr. Farr, Mr.
			 Moran, Ms. Baldwin,
			 Ms. Edwards,
			 Mr. Markey,
			 Mr. Holt, Mr. Fattah, Mr.
			 Cleaver, Mr. Cummings,
			 Mr. Al Green of Texas,
			 Mr. Nadler,
			 Mr. Payne,
			 Ms. Bass of California,
			 Ms. Sutton,
			 Mr. Ellison, and
			 Mr. Andrews) introduced the following
			 bill; which was referred to the Committee
			 on Ways and Means, and in addition to the Committee on
			 Financial Services, for a
			 period to be subsequently determined by the Speaker, in each case for
			 consideration of such provisions as fall within the jurisdiction of the
			 committee concerned

		A BILL
		To restrict the use of offshore tax havens and abusive
		  tax shelters to inappropriately avoid Federal taxation, and for other
		  purposes.

		1.Short title; etc
			(a)Short
			 titleThis Act may be cited
			 as the Stop Tax Haven Abuse
			 Act.
			(b)Amendment of
			 1986 codeExcept as otherwise
			 expressly provided, whenever in this Act 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.
			(c)Table of
			 contentsThe 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 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. Credit default swap payments made from the United
				States to persons offshore.
					Sec. 106. Tax on income of controlled foreign corporation
				deposited in financial account located in the United States.
					Title II—Other measures to combat tax haven and tax shelter
				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 hedge
				funds and private equity funds.
					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—Combating tax shelter promoters
					Sec. 301. Penalty for promoting abusive tax
				shelters.
					Sec. 302. Penalty for aiding and abetting the understatement of
				tax liability.
					Sec. 303. Prohibited fee arrangement.
					Sec. 304. Preventing tax shelter activities by financial
				institutions.
					Sec. 305. Information sharing for enforcement
				purposes.
					Sec. 306. Disclosure of information to Congress.
					Sec. 307. Tax opinion standards for tax
				practitioners.

			IDeterring the use of tax havens for tax
			 evasion
			101.Authorizing
			 special measures against foreign jurisdictions, financial institutions, and
			 others that impede United States tax enforcement
				(a)In
			 generalSection 5318A of
			 title 31, United States Code, is amended—
					(1)by striking the
			 section heading and inserting the following new heading:

							5318A.Special
				measures for jurisdictions, financial institutions, or international
				transactions that are of primary money laundering concern or impede United
				States tax
				enforcement
							;
					(2)in subsection (a),
			 by striking all before paragraph (1) and inserting the following:

							(a)Special measures
				To counter money laundering and efforts To impede United States tax
				enforcement
							;
					(3)in subsection (c),
			 by striking all before paragraph (1) and inserting the following:

							(c)Consultations
				and information To be considered in finding jurisdictions, institutions, types
				of accounts, or transactions To be of primary money laundering concern or To be
				impeding United States tax
				enforcement
							;
					(4)in subsection
			 (a)(1), by inserting or is 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
							(ii)by
			 striking and at the end;
							(B)by redesignating
			 subparagraph (B) as subparagraph (C); and
						(C)by inserting after
			 subparagraph (A) the following new subparagraph:

								(B)in matters
				involving United States tax enforcement, shall consult with the Commissioner of
				the Internal Revenue Service, the Secretary of State, the Attorney General of
				the United States, and in the sole discretion of the Secretary, such other
				agencies and interested parties as the Secretary may find to be appropriate;
				and
								;
						(6)in each of
			 paragraphs (1)(A), (2), (3), and (4) of subsection (b), by inserting or
			 to be 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 new paragraph:

							(5)Prohibitions or
				conditions on opening or maintaining certain correspondent or payable-through
				accounts or authorizing certain payment cardsIf the Secretary
				finds a jurisdiction outside of the United States, 1 or more 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 impeding United States tax
				enforcement, 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 prohibit, 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
				institution, financial agency, or credit card company or association, for or on
				behalf of a foreign banking institution, if such correspondent account,
				payable-through account, credit card, charge card, debit card, or similar
				credit or debit financial instrument, involves any such jurisdiction or
				institution, or if any such transaction may be conducted through such
				correspondent 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 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 secrecy; and
						(D)in clause (vi), by
			 inserting , tax treaty, or tax information exchange agreement
			 after treaty;
						(10)in subsection
			 (c)(2)(B)—
						(A)in clause (i), by
			 inserting or tax evasion after money laundering;
			 and
						(B)in clause (iii),
			 by inserting , tax evasion, 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 Committee on Ways and
			 Means of the House of Representatives of any such action involving United
			 States tax enforcement after such action.
					(b)Effective
			 dateThe amendments made by this section shall take effect on the
			 date of the enactment of this Act.
				102.Strengthening
			 the Foreign Account Tax Compliance Act (FATCA)
				(a)Reporting
			 activities with respect to passive foreign investment companiesSection 1298(f) is amended by inserting
			 , or who directly or indirectly 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 financial institutionsSection 1471(d) is amended—
					(1)by inserting or transaction
			 after any depository in paragraph (2)(A), and
					(2)by striking or any interest
			 and all that follows in paragraph (5)(C) and inserting derivatives, or
			 any interest (including a futures or forward contract, swap, or option) in such
			 securities, partnership interests, commodities, or derivatives..
					(c)Withholdable
			 payments to other foreign financial institutionsSection 1472 is amended—
					(1)by inserting as a result of any
			 customer identification, anti-money laundering, anti-corruption, or similar
			 obligation to identify account holders, 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)DefinitionsClauses (i) and (ii) of section 1473(2)(A)
			 are each amended by inserting or as a beneficial owner after
			 indirectly.
				(e)Special
			 rulesSection 1474(c) is
			 amended—
					(1)by inserting , except that
			 information provided under sections 1471(c) or 1472(b) may be disclosed to any
			 Federal law enforcement agency, upon request or upon the initiation of the
			 Secretary, to investigate 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).
					(f)Information with
			 respect to foreign financial assetsSection 6038D(a) is amended by inserting
			 ownership or beneficial ownership after holds
			 any.
				(g)Establishing
			 presumptions for entities and transactions involving non-FATCA
			 institutions
					(1)Presumptions for
			 tax purposes
						(A)In
			 generalChapter 76 is amended by inserting after section 7491 the
			 following new subchapter:

								FPresumptions for
				certain legal proceedings

										Sec. 7492. Presumptions pertaining to entities and transactions
				  involving non-FATCA institutions.

									7492.Presumptions
				pertaining to entities and transactions involving non-FATCA
				institutions
										(a)ControlFor
				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 (other than an entity with shares regularly traded on an
				established securities market) 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, partnership, or foundation (other than
				an entity with shares regularly traded on an established securities market),
				that holds 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
				incomeFor purposes of any United States civil judicial or
				administrative proceeding to determine or collect tax, there shall be a
				rebuttable presumption that any amount or thing of value received by a United
				States person (other than an entity with shares regularly traded on an
				established securities market) directly or indirectly from an account or from
				an entity (other than an entity with shares regularly traded on an established
				securities market) 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 transferred by or on
				behalf of a United States person (other than an entity with shares regularly
				traded on an established securities market) directly or indirectly to an
				account, or entity (other than an entity with shares regularly traded on an
				established securities market) that holds an account, or in any other manner
				has assets, in a non-FATCA institution, represents previously unreported income
				of such person taxable in the year of the transfer.
										(c)Rebutting the
				presumptionsThe presumptions established in this section may be
				rebutted only by clear and convincing evidence, including detailed documentary,
				testimonial, and transactional evidence, establishing that—
											(1)in subsection (a),
				such taxpayer exercised no control, directly or indirectly, over account or
				entity 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
				transferred is an issue shall prohibit the introduction by the taxpayer of any
				foreign based document that is not authenticated 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 relating to
			 subchapter E the following new item:

									SUBCHAPTER F—Presumptions for certain legal
				proceedings

								.
						(2)Definition of
			 non-fatca institutionSection 7701(a) is amended by adding at the
			 end the following new paragraph:

							(51)Non-fatca
				institutionThe term non-FATCA institution means any
				financial institution that does not meet the reporting requirements of section
				1471(b).
							.
					(3)Presumptions for
			 securities law purposesSection 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)ControlFor
				purposes of any civil judicial or administrative proceeding under this title,
				there shall be a rebuttable presumption that a United States person (other than
				an entity with shares regularly traded on an established securities market)
				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, partnership, or foundation (other than an entity with shares regularly
				traded on an established securities market), that holds an account, or in any
				other manner has assets, in a non-FATCA institution (as defined in section
				7701(a)(51) of the Internal 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 absence of
				control.
								(2)Beneficial
				ownershipFor purposes of any civil judicial or administrative
				proceeding under this title, there shall be a rebuttable presumption that
				securities that are nominally owned by an 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 that are held in a non-FATCA institution (as so defined), are beneficially
				owned by any United States person (other than an entity with shares regularly
				traded on an established securities market) who directly or indirectly
				exercised control over such entity. The presumption of beneficial ownership
				created by this paragraph shall not be applied to prevent the Commission from
				determining or arguing the absence of beneficial
				ownership.
								.
					(4)Presumption for
			 reporting purposes relating to foreign financial accountsSection
			 5314 of title 31, United States Code, is amended by adding at the end the
			 following new subsection:

							(d)Rebuttable
				presumptionFor 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 sufficient to require a report prescribed
				by regulations under this
				section.
							.
					(5)Regulatory
			 authorityNot later than 180 days after the date of the enactment
			 of this Act, the Secretary of the Treasury and the Chairman of the Securities
			 and Exchange Commission shall each adopt regulations or other guidance
			 necessary to implement 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 determines that applying such amendments to such transactions is not
			 necessary to carry out the purposes of such amendments.
					(h)Effective
			 dateThe amendments made by this section shall take effect on the
			 date which is 180 days after the date of the enactment of this Act, whether or
			 not regulations are issued under subsection (g)(5).
				103.Treatment of
			 foreign corporations managed and controlled in the United States as domestic
			 corporations
				(a)In
			 generalSection 7701 is amended by redesignating subsection (p)
			 as subsection (q) and by inserting after subsection (o) the following new
			 subsection:

						(p)Certain
				corporations managed and controlled in the United States treated as domestic
				for income tax
							(1)In
				generalNotwithstanding 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 purposes of this
				title, but
								(B)the management and
				control of the corporation occurs, directly or indirectly, primarily within the
				United States,
								then,
				solely for purposes of chapter 1 (and any other provision of this title
				relating to chapter 1), the corporation shall be treated as a domestic
				corporation.(2)Corporation
				described
								(A)In
				generalA corporation is described in this paragraph if—
									(i)the stock of such
				corporation is regularly traded on an established securities market, or
									(ii)the aggregate
				gross assets of such corporation (or any predecessor thereof), including assets
				under management for investors, whether held directly or indirectly, at any
				time during the taxable year or any preceding taxable year is $50,000,000 or
				more.
									(B)General
				exceptionA corporation 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 expected 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.
									(C)Exception from
				gross assets testSubparagraph (A)(ii) shall not apply to a
				corporation which is a controlled foreign corporation (as defined in section
				957) and which is a member of an affiliated group (as defined section 1504, but
				determined without regard to section 1504(b)(3)) the common parent of
				which—
									(i)is
				a domestic corporation (determined without regard to this subsection),
				and
									(ii)has substantial
				assets (other than cash and cash equivalents and other than stock of foreign
				subsidiaries) held for use in the active conduct of a trade or business in the
				United States.
									(3)Management and
				control
								(A)In
				generalThe Secretary shall prescribe regulations for purposes of
				determining cases in which the management and control of a corporation is to be
				treated as occurring primarily within the United States.
								(B)Executive
				officers and senior managementSuch regulations shall provide
				that—
									(i)the management and
				control of a corporation shall be treated as occurring primarily within the
				United States if substantially all of the executive officers and senior
				management of the corporation who exercise day-to-day responsibility for making
				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 corporation (including
				individuals who are officers or employees of other corporations in the same
				chain of corporations as the corporation) shall be treated as executive
				officers and senior management if such individuals exercise the day-to-day
				responsibilities of the corporation described in clause (i).
									(C)Corporations
				primarily holding investment assetsSuch regulations shall 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 (directly or indirectly) consist primarily of assets being managed
				on behalf of investors, and
									(ii)decisions about
				how to invest the assets are made in the United
				States.
									.
				(b)Effective
			 dateThe 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
			 enactment 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.
				104.Reporting
			 United States beneficial owners of foreign owned financial accounts
				(a)In
			 generalSubpart B of part III of subchapter A of chapter 61 is
			 amended by inserting after section 6045B the following new sections:

						6045C.Returns
				regarding United States beneficial owners of financial accounts located in the
				United States and held in the name of a foreign entity
							(a)Requirement of
				returnIf—
								(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 purposes 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
				informationFor purposes of subsection (a) the information
				required to be included on the return shall include—
								(1)the name, address,
				and, if known, the taxpayer identification number of the United States
				beneficial owner,
								(2)the known facts
				pertaining to the relationship 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 beneficial owners with respect to whom information is required To
				Be reportedA withholding agent required to make a return under
				subsection (a) shall furnish 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
				beneficial owner.
								The
				written statement required under the preceding sentence 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.6045D.Returns by
				financial institutions regarding establishment of accounts in non-FATCA
				institutions
							(a)Requirement of
				returnAny financial institution 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 company, partnership,
				or foundation (other than an entity with shares regularly traded on an
				established securities market), in a non-FATCA institution (as defined in
				section 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
				informationFor purposes of subsection (a) the information
				required to be included on the return shall include—
								(1)the name, address,
				and taxpayer identification number of such United States person,
								(2)the name and
				address of the financial institution 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 information is required
				To be reportedA financial institution 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
								(2)the information
				required to be shown on such return with respect to such United States
				person.
								The
				written statement required under the preceding sentence 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 required to be
				made.(d)ExemptionThe
				Secretary may by regulations 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 section to such persons, accounts, or
				entities is not necessary to carry out the purposes of this
				section.
							.
				(b)Penalties
					(1)ReturnsSection
			 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
							(xxvii)section
				6045D(a) (relating to returns by financial institutions regarding establishment
				of accounts at non-FATCA institutions),
				and
							.
					(2)Payee
			 statementsSection 6724(d)(2) is amended by striking
			 or at the end of subparagraph (GG), by striking the period at
			 the end of subparagraph (HH), and by inserting after subparagraph (HH) the
			 following new subparagraphs:

							(II)section 6045C(c)
				(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),
							(JJ)section 6045D(c)
				(relating to returns by financial institutions regarding establishment of
				accounts at non-FATCA
				institutions).
							.
					(c)Clerical
			 amendmentThe 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 accounts at non-FATCA
				institutions.

						.
				(d)Additional
			 penalties
					(1)Additional
			 penalties on banksSection 5239(b)(1) of the Revised Statutes (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 firmsSection 21(d)(3)(A) of the
			 Securities Exchange Act of 1934 (15 U.S.C. 78u(d)(3)(A)) is amended by
			 inserting any of the provisions of section 6045D of the Internal Revenue
			 Code of 1986, after the rules or regulations
			 thereunder,.
					(e)Regulatory
			 authority and effective date
					(1)Regulatory
			 AuthorityNot later than 180 days after the date of the enactment
			 of this Act, the Secretary of the Treasury shall adopt regulations, forms, or
			 other guidance necessary to implement this section.
					(2)Effective
			 DateSection 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 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 accounts opened after December 31 of
			 the year of the date of the enactment of this Act.
					105.Credit default
			 swap payments made from the United States to persons offshore
				(a)Tax on credit
			 default swap payments received by foreign personsSection
			 871(a)(1) is amended—
					(1)by inserting
			 credit default swap payments, after annuities, in
			 subparagraph (A), and
					(2)by adding at the
			 end the following new sentence: In the case of credit default swap
			 payments, the source of a credit default swap payment is determined by
			 reference to the location of the payor..
					(b)Tax on credit
			 default swap payments received by foreign corporationsSection
			 881(a) is amended—
					(1)by inserting
			 credit default swap payments, after annuities, in
			 paragraph (1), and
					(2)by adding at the
			 end the following new sentence: In the case of credit default swap
			 payments, the source of a credit default swap payment is determined by
			 reference to the location of the payor..
					106.Tax on income
			 of controlled foreign corporation deposited in financial account located in the
			 United StatesSection 952(a)
			 is amended by adding at the end the following new sentence:
			 Notwithstanding section 956(c)(2)(A), any property (as defined in
			 section 317(a)) of such controlled foreign corporation that is deposited and
			 maintained, directly or indirectly, for or on behalf of such corporation in a
			 financial account located in the United States, including in a correspondent
			 account of a financial institution, is a constructive distribution with respect
			 to the stock which such United States shareholder owns..
			IIOther measures to
			 combat tax haven and tax shelter abuses
			201.Country-by-country
			 reporting
				(a)In
			 generalSection 13 of the Securities Exchange Act of 1934 (15
			 U.S.C. 78m) is amended by adding at the end the following new
			 subsection:

						(r)Disclosure of
				financial performance on a country-by-Country basis
							(1)DefinitionsIn
				this subsection—
								(A)the term
				issuer group shall mean the issuer, each subsidiary of the issuer,
				and each entity under the control of the issuer;
								(B)the term
				country of operation shall mean each country in which a member of
				the issuer group is incorporated or organized, or maintains employees or
				conducts business activities; and
								(C)the term
				world-wide allocation of group members shall mean each member of
				the issuer group listed according to their country of operation.
								(2)Country-by-country
				reportingThe Commission shall issue rules that require each
				issuer to include in an annual report filed by the issuer with the Commission
				information indicative of financial performance on a country-by-country basis
				during the covered period, including—
								(A)a list of each
				country of operation;
								(B)the world-wide
				allocation of group members;
								(C)the financial
				performance of each member of the issuer group in each country of operation,
				without exception, including, and set forth according to—
									(i)total number of
				employees physically working in the country of operation;
									(ii)total sales by
				the member of the issuer group to third parties;
									(iii)total sales by
				the member of the issuer group to other members of the issuer group and total
				sales to each such member;
									(iv)total purchases
				by the member of the issuer group from third parties;
									(v)total purchases by
				the member of the issuer group from other members of the issuer group and total
				purchases from each such member;
									(vi)total financing
				payments made by the member of the issuer group to third parties;
									(vii)total financing
				payments made by the member of the issuer group to other members of the issuer
				group and total financing payments made to each such member;
									(viii)pre-tax gross
				revenues of the member of the issuer group;
									(ix)pre-tax net
				revenues of the member of the issuer group; and
									(x)such other
				financial information as the Commission may determine is indicative of the
				financial performance of the issuer;
									(D)the tax paid by
				each member of the issuer group in each country of operation, without
				exception, including, and set forth according to—
									(i)total Federal,
				regional, local, and other tax assessed against each member of the issuer group
				with respect to each country of operation during the covered period;
									(ii)after taking into
				account any tax deductions, tax credits, tax forgiveness, or other tax benefits
				or waivers, total amount of tax paid from the treasury of the member of the
				issuer group to the government of each country of operation during the covered
				period; and
									(iii)such other
				financial information as the Commission may determine is necessary or
				appropriate to inform the public of the tax obligations of and payments by each
				member of the issuer group; and
									(E)such other
				financial information as the Commission may determine is necessary or
				appropriate in the public interest or for the protection of
				investors.
								.
				(b)Rulemaking
					(1)DeadlinesNot
			 later than 180 days after the date of the enactment of this Act, the Commission
			 shall issue a proposed rule to carry out this section and, not later than 270
			 days after the date of the enactment of this Act, shall issue a final rule to
			 carry out this section.
					(2)ConsultationIn
			 issuing the rules under this section, the Commission shall consult with the
			 Secretary of the Treasury and the Commissioner of Internal Revenue and, to the
			 extent practicable and in furtherance of its obligation to protect investors,
			 shall issue rules that support Federal efforts to reduce offshore tax evasion
			 and abuses.
					(3)Interactive data
			 formatThe rules issued under this section shall require that the
			 information provided by issuers in their annual reports be submitted in an
			 interactive data format as provided in section 13(q)(2)(D) of the Securities
			 Exchange Act of 1934 (15 U.S.C. 78m(q)(2)(D)), and to the extent practicable,
			 the Commission shall make available online, to the public, a compilation of
			 such information.
					(4)Aggregate
			 dataThe rules may allow issuers to provide the financial
			 information required under section 13(r) of the Securities Exchange Act of 1934
			 (15 U.S.C. 78m(r)), as added by this section, aggregated at the level of each
			 country of operation instead of with respect to each member of the issuer group
			 individually, provided that the Commission retains the authority, at its
			 discretion, to require further disaggregation.
					(5)Effective
			 dateEach issuer shall be required to comply with the
			 requirements of section 13(r) of the Securities Exchange Act of 1934 (15 U.S.C.
			 78m(r)), as added by this section, not later than the date on which the issuer
			 must file with the Commission its first annual report that is due not later
			 than 1 year after the date on which the Commission issues a final rule under
			 this section.
					202.Penalty for
			 failing to disclose offshore holdings
				(a)Securities
			 Exchange Act of 1934Section
			 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 tierNotwithstanding clauses (i), (ii), and
				(iii), the amount of the penalty for each such violation shall not exceed
				$1,000,000 for any person if the violation described in subparagraph (A)
				involved a knowing failure to disclose any holding or transaction involving
				equity or debt instruments of an issuer and known by such person to involve a
				foreign entity, including any trust, corporation, limited liability company,
				partnership, or foundation that is directly or indirectly controlled by such
				person, and which would have been otherwise subject to disclosure by such
				person under this
				title.
						.
				(b)Securities Act
			 of 1933Section 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
				tierNotwithstanding subparagraphs (A), (B), and (C), the amount
				of penalty for each such violation shall not exceed $1,000,000 for any person,
				if the violation described in paragraph (1) involved a knowing failure to
				disclose any holding or transaction involving equity or debt instruments of an
				issuer and known by such person to involve a foreign entity, including any
				trust, corporation, limited liability company, partnership, or foundation,
				directly or indirectly controlled by such person, and which would have been
				otherwise subject to disclosure by such person under this
				title.
						.
				(c)Investment
			 Company Act of 1940Section 9(d)(2) of the Investment Company Act
			 of 1940 (15 U.S.C. 80a–9(d)(2)) is amended by adding at the end the
			 following:

						(D)Fourth
				tierNotwithstanding subparagraphs (A), (B), and (C), the amount
				of penalty for each such violation shall not exceed $1,000,000 for any person,
				if the violation described in paragraph (1) involved a knowing failure to
				disclose any holding or transaction involving equity or debt instruments of an
				issuer and known by such person to involve a foreign entity, including any
				trust, corporation, limited liability company, partnership, or foundation,
				directly or indirectly controlled by such person, and which would have been
				otherwise subject to disclosure by such person under this
				title.
						.
				(d)Investment
			 Advisers Act of 1940Section 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
				tierNotwithstanding subparagraphs (A), (B), and (C), the amount
				of penalty for each such violation shall not exceed $1,000,000 for any person,
				if the violation described in paragraph (1) involved a knowing failure to
				disclose any holding or transaction involving equity or debt instruments of an
				issuer and known by such person to involve a foreign entity, including any
				trust, corporation, limited liability company, partnership, or foundation,
				directly or indirectly controlled by such person, and which would have been
				otherwise subject to disclosure by such person under this
				title.
						.
				203.Deadline for
			 anti-money laundering rule for hedge funds and private equity funds
				(a)In
			 general
					(1)Proposed
			 ruleNot later than 90 days after the date of the enactment of
			 this Act, the Secretary of the Treasury, in consultation with the Chairman of
			 the Securities and Exchange Commission and the Chairman of the Commodity
			 Futures Trading Commission, shall 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 under subsections (g) and (h) of section 5318 of
			 title 31, United States Code.
					(2)Final
			 ruleNot later than 180 days after the date of the enactment of
			 this Act, the Secretary of the Treasury shall publish a final rule in the
			 Federal Register on the matter described in paragraph (1).
					(b)ContentsThe
			 final rule published under this section—
					(1)shall require, at
			 a minimum, that to safeguard against terrorist financing and money laundering,
			 all unregistered investment companies shall—
						(A)use risk-based due
			 diligence policies, procedures, and controls that are reasonably designed to
			 ascertain the identity of any foreign person (including the nominal and
			 beneficial owner or beneficiary of a foreign corporation, partnership, trust,
			 or other foreign entity) planning to supply or supplying funds to be invested
			 with the advice or assistance of that unregistered investment company;
			 and
						(B)be subject to
			 section 5318(k)(2) of title 31, United States Code; and
						(2)may incorporate
			 aspects of the proposed rule for unregistered investment companies published in
			 the Federal Register on September 26, 2002 (67 Fed. Reg. 60617) (relating to
			 anti-money laundering programs).
					(c)DefinitionsIn
			 this section—
					(1)the terms
			 investment company and issuer have the same meanings
			 as in section 2 of the Investment Company Act of 1940 (15 U.S.C. 80a–2);
			 and
					(2)the term
			 unregistered investment company means an issuer that would be an
			 investment company, but for the exclusion under paragraph (1) or (7) of section
			 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)).
					204.Anti-money
			 laundering requirements for formation agents
				(a)Anti-Money
			 laundering obligations for formation agentsSection 5312(a)(2) of
			 title 31, United States Code, is amended, by—
					(1)in subparagraph
			 (Y), by striking or at the end;
					(2)by redesignating
			 subparagraph (Z) as subparagraph (AA); and
					(3)by inserting after
			 subparagraph (Y) the following:

							(Z)persons 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
			 ruleNot later than 120 days after the date of the enactment of
			 this Act, the Secretary of the Treasury, in consultation with the Attorney
			 General of the United States, the Secretary of Homeland Security, and the
			 Commissioner of Internal Revenue, shall publish a proposed rule in the Federal
			 Register requiring persons described in section 5312(a)(2)(Z) of title 31,
			 United States Code, as added by this section, to establish anti-money
			 laundering programs under subsections (g) and (h) of section 5318 of that
			 title.
					(2)Final
			 ruleNot later than 270 days after such date of enactment, the
			 Secretary of the Treasury shall publish a final rule in the Federal Register on
			 the matter described in paragraph (1).
					(3)ExclusionsAny
			 rule promulgated under this subsection shall exclude from the category of
			 persons engaged in the business of forming new corporations 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.
						205.Strengthening
			 John Doe summons proceedings
				(a)In
			 generalSubsection (f) of section 7609 is amended to read as
			 follows:

						(f)Additional
				requirement in the case of a John Doe summons
							(1)General
				RuleAny summons described in subsection (c)(1) which does not
				identify the person with respect to whose liability the summons is issued may
				be served only after a court proceeding in which the Secretary establishes
				that—
								(A)the summons
				relates to the investigation of a particular person or ascertainable group or
				class of persons,
								(B)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 any provision of any internal
				revenue law, and
								(C)the information
				sought to be obtained from the examination of the records or testimony (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)ExceptionParagraph
				(1) shall not apply to any summons which specifies that it is limited to
				information regarding a United States correspondent 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 financial institution that is held at a non-FATCA institution (as defined in
				section 7701(a)(51)).
							(3)Presumption in
				cases involving non-fatca institutionsFor purposes of this
				section, in any case in which the particular person or ascertainable group or
				class of persons have financial accounts 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
				generalNotwithstanding 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 approved 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
				projectsA project may only be approved under this subparagraph
				after a court proceeding in which the Secretary establishes that—
									(i)any summons issues
				with respect to the project will be issued to a member of an ascertainable
				group or class of persons, and
									(ii)any summons
				issued with respect to such project will meet the requirements of paragraph
				(1).
									(C)ExtensionUpon
				application of the Secretary, the court may extend the time for issuing such
				summonses under subparagraph (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
				oversightDuring any period in which the Secretary is authorized
				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
					(1)In
			 generalParagraph (1) of section 7609(h) is amended by inserting
			 after the first sentence 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 determine the
			 approval of a project under subsection (f)(2)(B)..
					(2)Conforming
			 amendmentThe first sentence of section 7609(h)(1) is amended by
			 striking (f) and inserting (f)(1).
					(c)Effective
			 dateThe amendments made by this section shall apply to summonses
			 issued after the date of the enactment of this Act.
				(d)GAO
			 reportNot later than the date which is 5 years after the date of
			 the enactment of this Act, the Comptroller General of the United States shall
			 issue a report on the implementation of section 7609(f)(2) of the Internal
			 Revenue Code of 1986, as added by this section.
				206.Improving
			 enforcement of foreign financial account reporting
				(a)Clarifying the
			 connection of foreign financial account reporting to tax
			 administrationParagraph (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
				statutes..
				(b)Simplifying the
			 calculation of foreign financial account reporting
			 penaltiesSection 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
			 enforcementSection 5319 of title 31, United States Code, is
			 amended by inserting the civil and criminal enforcement divisions of the
			 Internal Revenue Service, after including.
				IIICombating tax
			 shelter promoters
			301.Penalty for
			 promoting abusive tax shelters
				(a)Penalty for
			 promoting abusive tax sheltersSection 6700 is amended—
					(1)by redesignating subsections (b) and (c) as
			 subsections (d) and (e), respectively,
					(2)by striking a penalty and
			 all that follows through the period in the first sentence of subsection (a) and
			 inserting a penalty determined under subsection (b), and
					(3)by inserting after subsection (a) the
			 following new subsections:

							(b)Amount of
				penalty; calculation of penalty; liability for penalty
								(1)Amount of
				penaltyThe amount of the
				penalty imposed by subsection (a) shall not exceed 150 percent of the gross
				income derived (or to be derived) from such activity by the person or persons
				subject to such penalty.
								(2)Calculation of
				penaltyThe penalty amount
				determined under paragraph (1) shall be calculated with respect to each
				instance of an activity described in subsection (a), each instance in which
				income was derived by the person or persons subject to such penalty, and each
				person who participated in such an activity.
								(3)Liability for
				penaltyIf more than 1 person
				is liable under subsection (a) with respect to such activity, all such persons
				shall be jointly and severally liable for the penalty under such
				subsection.
								(c)Penalty not
				deductibleThe payment of any
				penalty imposed under this section or the payment of any amount to settle or
				avoid the imposition of such penalty shall not be considered an ordinary and
				necessary expense in carrying on a trade or business for purposes of this title
				and shall not be deductible by the person who is subject to such penalty or who
				makes such
				payment.
							.
					(b)Conforming
			 amendmentSection 6700(a) is
			 amended by striking the last sentence.
				(c)Effective
			 dateThe amendments made by
			 this section shall apply to activities after the date of the enactment of this
			 Act.
				302.Penalty for aiding
			 and abetting the understatement of tax liability
				(a)In
			 generalSection 6701(a) is
			 amended—
					(1)by inserting the tax liability
			 or after respect to, in paragraph (1),
					(2)by inserting aid, assistance,
			 procurement, or advice with respect to such before
			 portion both places it appears in paragraphs (2) and (3),
			 and
					(3)by inserting instance of aid,
			 assistance, procurement, or advice or each such before
			 document in the matter following paragraph (3).
					(b)Amount of
			 penaltySubsection (b) of
			 section 6701 is amended to read as follows:

						(b)Amount of
				penalty; calculation of penalty; liability for penalty
							(1)Amount of
				penaltyThe amount of the
				penalty imposed by subsection (a) shall not exceed 150 percent of the gross
				income derived (or to be derived) from such aid, assistance, procurement, or
				advice provided by the person or persons subject to such penalty.
							(2)Calculation of
				penaltyThe penalty amount
				determined under paragraph (1) shall be calculated with respect to each
				instance of aid, assistance, procurement, or advice described in subsection
				(a), each instance in which income was derived by the person or persons subject
				to such penalty, and each person who made such an understatement of the
				liability for tax.
							(3)Liability for
				penaltyIf more than 1 person
				is liable under subsection (a) with respect to providing such aid, assistance,
				procurement, or advice, all such persons shall be jointly and severally liable
				for the penalty under such
				subsection.
							.
				(c)Penalty not
			 deductibleSection 6701 is
			 amended by adding at the end the following new subsection:

						(g)Penalty not
				deductibleThe payment of any
				penalty imposed under this section or the payment of any amount to settle or
				avoid the imposition of such penalty shall not be considered an ordinary and
				necessary expense in carrying on a trade or business for purposes of this title
				and shall not be deductible by the person who is subject to such penalty or who
				makes such
				payment.
						.
				(d)Effective
			 dateThe amendments made by
			 this section shall apply to activities after the date of the enactment of this
			 Act.
				303.Prohibited fee
			 arrangement
				(a)In
			 generalSection 6701, as
			 amended by this Act, is amended—
					(1)by redesignating subsections (f) and (g) as
			 subsections (g) and (h), respectively,
					(2)by striking subsection (a).
			 in paragraphs (2) and (3) of subsection (g) (as redesignated by paragraph (1))
			 and inserting subsection (a) or (f)., and
					(3)by inserting after subsection (e) the
			 following new subsection:

							(f)Prohibited fee
				arrangement
								(1)In
				generalAny person who makes
				an agreement for, charges, or collects a fee which is for services provided in
				connection with the internal revenue laws, and the amount of which is
				calculated according to, or is dependent upon, a projected or actual amount
				of—
									(A)tax savings or benefits, or
									(B)losses which can be used to offset other
				taxable income,
									shall pay a penalty with respect to
				each such fee activity in the amount determined under subsection (b).(2)RulesThe Secretary may issue rules to carry out
				the purposes of this subsection and may provide exceptions for fee arrangements
				that are in the public
				interest.
								.
					(b)Effective
			 dateThe amendments made by
			 this section shall apply to fee agreements, charges, and collections made after
			 the date of the enactment of this Act.
				304.Preventing tax
			 shelter activities by financial institutions
				(a)Examinations
					(1)Development of
			 examination techniquesEach
			 of the Federal banking agencies and the Commission shall, in consultation with
			 the Internal Revenue Service, develop examination techniques to detect
			 potential violations of section 6700 or 6701 of the Internal Revenue Code of
			 1986, by depository institutions, brokers, dealers, and investment advisers, as
			 appropriate.
					(2)ImplementationEach of the Federal banking agencies and
			 the Commission shall implement the examination techniques developed under
			 paragraph (1) with respect to each of the depository institutions, brokers,
			 dealers, or investment advisers subject to their enforcement authority. Such
			 examination shall, to the extent possible, be combined with any examination by
			 such agency otherwise required or authorized by Federal law.
					(b)Report to
			 internal revenue serviceIn
			 any case in which an examination conducted under this section with respect to a
			 financial institution or other entity reveals a potential violation, such
			 agency shall promptly notify the Internal Revenue Service of such potential
			 violation for investigation and enforcement by the Internal Revenue Service, in
			 accordance with applicable provisions of law.
				(c)Report to
			 congressThe Federal banking
			 agencies and the Commission shall submit a joint written report to Congress in
			 2013 on their progress in preventing violations of sections 6700 and 6701 of
			 the Internal Revenue Code of 1986, by depository institutions, brokers,
			 dealers, and investment advisers, as appropriate.
				(d)DefinitionsFor purposes of this section—
					(1)the terms broker,
			 dealer, and investment adviser have the same meanings
			 as in section 3 of the Securities Exchange Act of 1934 (15 U.S.C. 78c);
					(2)the term Commission means the
			 Securities and Exchange Commission;
					(3)the term depository
			 institution has the same meaning as in section 3(c) of the Federal
			 Deposit Insurance Act (12 U.S.C. 1813(c));
					(4)the term Federal banking
			 agencies has the same meaning as in section 3(q) of the Federal Deposit
			 Insurance Act (12 U.S.C. 1813(q)); and
					(5)the term Secretary means the
			 Secretary of the Treasury.
					305.Information sharing
			 for enforcement purposes
				(a)Promotion of
			 prohibited tax shelters or tax avoidance schemesSection 6103(h) is amended by adding at the
			 end the following new paragraph:

						(7)Disclosure of
				returns and return information related to promotion of prohibited tax shelters
				or tax avoidance schemes
							(A)Written
				requestUpon receipt by the
				Secretary of a written request which meets the requirements of subparagraph (B)
				from the head of the United States Securities and Exchange Commission, an
				appropriate Federal banking agency as defined under section 1813(q) of title
				12, United States Code, or the Public Company Accounting Oversight Board, a
				return or return information shall be disclosed to such requestor’s officers
				and employees who are personally and directly engaged in an investigation,
				examination, or proceeding by such requestor to evaluate, determine, penalize,
				or deter conduct by a financial institution, issuer, or public accounting firm,
				or associated person, in connection with a potential or actual violation of
				section 6700 (promotion of abusive tax shelters), 6701 (aiding and abetting
				understatement of tax liability), or activities related to promoting or
				facilitating inappropriate tax avoidance or tax evasion. Such disclosure shall
				be solely for use by such officers and employees in such investigation,
				examination, or proceeding. In the discretion of the Secretary, such disclosure
				may take the form of the participation of Internal Revenue Service employees in
				a joint investigation, examination, or proceeding with the Securities Exchange
				Commission, Federal banking agency, or Public Company Accounting Oversight
				Board.
							(B)RequirementsA request meets the requirements of this
				subparagraph if it sets forth—
								(i)the nature of the investigation,
				examination, or proceeding,
								(ii)the statutory authority under which such
				investigation, examination, or proceeding is being conducted,
								(iii)the name or names of the financial
				institution, issuer, or public accounting firm to which such return information
				relates,
								(iv)the taxable period or periods to which such
				return information relates, and
								(v)the specific reason or reasons why such
				disclosure is, or may be, relevant to such investigation, examination or
				proceeding.
								(C)Financial
				institutionFor the purposes
				of this paragraph, the term financial institution means a
				depository institution, foreign bank, insured institution, industrial loan
				company, broker, dealer, investment company, investment advisor, or other
				entity subject to regulation or oversight by the United States Securities and
				Exchange Commission or an appropriate Federal banking
				agency.
							.
				(b)Financial and
			 accounting fraud investigationsSection 6103(i) is amended by adding at the
			 end the following new paragraph:

						(9)Disclosure of
				returns and return information for use in financial and accounting fraud
				investigations
							(A)Written
				requestUpon receipt by the
				Secretary of a written request which meets the requirements of subparagraph (B)
				from the head of the United States Securities and Exchange Commission or the
				Public Company Accounting Oversight Board, a return or return information shall
				be disclosed to such requestor’s officers and employees who are personally and
				directly engaged in an investigation, examination, or proceeding by such
				requester to evaluate the accuracy of a financial statement or report, or to
				determine whether to require a restatement, penalize, or deter conduct by an
				issuer, investment company, or public accounting firm, or associated person, in
				connection with a potential or actual violation of auditing standards or
				prohibitions against false or misleading statements or omissions in financial
				statements or reports. Such disclosure shall be solely for use by such officers
				and employees in such investigation, examination, or proceeding.
							(B)RequirementsA request meets the requirements of this
				subparagraph if it sets forth—
								(i)the nature of the investigation,
				examination, or proceeding,
								(ii)the statutory authority under which such
				investigation, examination, or proceeding is being conducted,
								(iii)the name or names of the issuer, investment
				company, or public accounting firm to which such return information
				relates,
								(iv)the taxable period or periods to which such
				return information relates, and
								(v)the specific reason or reasons why such
				disclosure is, or may be, relevant to such investigation, examination or
				proceeding.
								.
				(c)Effective
			 dateThe amendments made by
			 this section shall apply to disclosures and to information and document
			 requests made after the date of the enactment of this Act.
				306.Disclosure of
			 information to Congress
				(a)Disclosure by
			 tax return preparer
					(1)In
			 generalSubparagraph (B) of
			 section 7216(b)(1) is amended to read as follows:

							(B)pursuant to any one of the following
				documents, if clearly identified:
								(i)The order of any Federal, State, or local
				court of record.
								(ii)A subpoena issued by a Federal or State
				grand jury.
								(iii)An administrative order, summons, or
				subpoena which is issued in the performance of its duties by—
									(I)any Federal agency, including Congress or
				any committee or subcommittee thereof, or
									(II)any State agency, body, or commission
				charged under the laws of the State or a political subdivision of the State
				with the licensing, registration, or regulation of tax return
				preparers.
									.
					(2)Effective
			 dateThe amendment made by
			 this subsection shall apply to disclosures made after the date of the enactment
			 of this Act pursuant to any document in effect on or after such date.
					(b)Disclosure by
			 SecretaryParagraph (2) of
			 section 6104(a) is amended to read as follows:

						(2)Inspection by
				Congress
							(A)In
				generalUpon receipt of a
				written request from a committee or subcommittee of Congress, copies of
				documents related to a determination by the Secretary to grant, deny, revoke,
				or restore an organization’s exemption from taxation under section 501 shall be
				provided to such committee or subcommittee, including any application, notice
				of status, or supporting information provided by such organization to the
				Internal Revenue Service; any letter, analysis, or other document produced by
				or for the Internal Revenue Service evaluating, determining, explaining, or
				relating to the tax exempt status of such organization (other than returns,
				unless such returns are available to the public under this section or section
				6103 or 6110); and any communication between the Internal Revenue Service and
				any other party relating to the tax exempt status of such organization.
							(B)Additional
				informationSection 6103(f)
				shall apply with respect to—
								(i)the application for exemption of any
				organization described in subsection (c) or (d) of section 501 which is exempt
				from taxation under section 501(a) for any taxable year and any application
				referred to in subparagraph (B) of subsection (a)(1) of this section,
				and
								(ii)any other papers which are in the
				possession of the Secretary and which relate to such application,
								as if such papers constituted
				returns..
				(c)Effective
			 dateThe amendments made by
			 this section shall apply to disclosures and to information and document
			 requests made after the date of the enactment of this Act.
				307.Tax opinion
			 standards for tax practitionersSection 330(d) of title 31, United States
			 Code, is amended to read as follows:

					(d)The Secretary of the Treasury shall impose
				standards applicable to the rendering of written advice with respect to any
				listed transaction or any entity, plan, arrangement, or other transaction which
				has a potential for tax avoidance or evasion. Such standards shall address, but
				not be limited to, the following issues:
						(1)Independence of the practitioner issuing
				such written advice from persons promoting, marketing, or recommending the
				subject of the advice.
						(2)Collaboration among practitioners, or
				between a practitioner and other party, which could result in such
				collaborating parties having a joint financial interest in the subject of the
				advice.
						(3)Avoidance of conflicts of interest which
				would impair auditor independence.
						(4)For written advice issued by a firm,
				standards for reviewing the advice and ensuring the consensus support of the
				firm for positions taken.
						(5)Reliance on reasonable factual
				representations by the taxpayer and other parties.
						(6)Appropriateness of the fees charged by the
				practitioner for the written advice.
						(7)Preventing practitioners and firms from
				aiding or abetting the understatement of tax liability by clients.
						(8)Banning the promotion of potentially
				abusive or illegal tax
				shelters.
						.