Dokumentation: Foreign Account Tax Compliance

by mnockerl on 30. März 2010

Dieses am 18.3. verabschiedete US-Gesetz wird Finanzhäusern weltweit noch viel Freude bereiten. Es ist versteckt in einem umfassenden Gesetzespaket und hat interessanterweise bisher kaum Reaktionen hervorgerufen. Der Blick Log dokumentiert aus dem Gesetzblatt der USA vom 18.3.2010 (hier abrufbar) das:

Subtitle A—Foreign Account Tax Compliance
PART I—INCREASED DISCLOSURE OF BENEFICIAL OWNERS SEC. 501. REPORTING ON CERTAIN FOREIGN ACCOUNTS.
(a) IN GENERAL.—The Internal Revenue Code of 1986 is
amended by inserting after chapter 3 the following new chapter:
‘‘CHAPTER 4—TAXES TO ENFORCE REPORTING ON
CERTAIN FOREIGN ACCOUNTS
‘‘Sec. 1471. Withholdable payments to foreign financial institutions.
‘‘Sec. 1472. Withholdable payments to other foreign entities.
‘‘Sec. 1473. Definitions.
‘‘Sec. 1474. Special rules.
‘‘SEC. 1471. WITHHOLDABLE PAYMENTS TO FOREIGN FINANCIAL
INSTITUTIONS.

‘‘(a) IN GENERAL.—In the case of any withholdable payment
to a foreign financial institution which does not meet the requirements
of subsection (b), the withholding agent with respect to
such payment shall deduct and withhold from such payment a
tax equal to 30 percent of the amount of such payment.
‘‘(b) REPORTING REQUIREMENTS, ETC.—
‘‘(1) IN GENERAL.—The requirements of this subsection are
met with respect to any foreign financial institution if an agreement
is in effect between such institution and the Secretary
under which such institution agrees—
‘‘(A) to obtain such information regarding each holder
of each account maintained by such institution as is necessary
to determine which (if any) of such accounts are
United States accounts,
‘‘(B) to comply with such verification and due diligence
procedures as the Secretary may require with respect to
the identification of United States accounts,
‘‘(C) in the case of any United States account maintained
by such institution, to report on an annual basis
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124 STAT. 98 PUBLIC LAW 111–147—MAR. 18, 2010
the information described in subsection (c) with respect
to such account,
‘‘(D) to deduct and withhold a tax equal to 30 percent
of—
‘‘(i) any passthru payment which is made by such
institution to a recalcitrant account holder or another
foreign financial institution which does not meet the
requirements of this subsection, and
‘‘(ii) in the case of any passthru payment which
is made by such institution to a foreign financial
institution which has in effect an election under paragraph
(3) with respect to such payment, so much of
such payment as is allocable to accounts held by recalcitrant
account holders or foreign financial institutions
which do not meet the requirements of this subsection,
‘‘(E) to comply with requests by the Secretary for additional
information with respect to any United States
account maintained by such institution, and
‘‘(F) in any case in which any foreign law would (but
for a waiver described in clause (i)) prevent the reporting
of any information referred to in this subsection or subsection
(c) with respect to any United States account maintained
by such institution—
‘‘(i) to attempt to obtain a valid and effective
waiver of such law from each holder of such account,
and
‘‘(ii) if a waiver described in clause (i) is not
obtained from each such holder within a reasonable
period of time, to close such account.
Any agreement entered into under this subsection may be
terminated by the Secretary upon a determination by the Secretary
that the foreign financial institution is out of compliance
with such agreement.
‘‘(2) FINANCIAL INSTITUTIONS DEEMED TO MEET REQUIREMENTS
IN CERTAIN CASES.—A foreign financial institution may
be treated by the Secretary as meeting the requirements of
this subsection if—
‘‘(A) such institution—
‘‘(i) complies with such procedures as the Secretary
may prescribe to ensure that such institution does
not maintain United States accounts, and
‘‘(ii) meets such other requirements as the Secretary
may prescribe with respect to accounts of other
foreign financial institutions maintained by such
institution, or
‘‘(B) such institution is a member of a class of institutions
with respect to which the Secretary has determined
that the application of this section is not necessary to
carry out the purposes of this section.
‘‘(3) ELECTION TO BE WITHHELD UPON RATHER THAN WITHHOLD
ON PAYMENTS TO RECALCITRANT ACCOUNT HOLDERS AND
NONPARTICIPATING FOREIGN FINANCIAL INSTITUTIONS.—In the
case of a foreign financial institution which meets the requirements
of this subsection and such other requirements as the
Secretary may provide and which elects the application of this
paragraph—
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 99
‘‘(A) the requirements of paragraph (1)(D) shall not
apply,
‘‘(B) the withholding tax imposed under subsection (a)
shall apply with respect to any withholdable payment to
such institution to the extent such payment is allocable
to accounts held by recalcitrant account holders or foreign
financial institutions which do not meet the requirements
of this subsection, and
‘‘(C) the agreement described in paragraph (1) shall—
‘‘(i) require such institution to notify the withholding
agent with respect to each such payment of
the institution’s election under this paragraph and
such other information as may be necessary for the
withholding agent to determine the appropriate
amount to deduct and withhold from such payment,
and
‘‘(ii) include a waiver of any right under any treaty
of the United States with respect to any amount
deducted and withheld pursuant to an election under
this paragraph.
To the extent provided by the Secretary, the election under
this paragraph may be made with respect to certain classes
or types of accounts of the foreign financial institution.
‘‘(c) INFORMATION REQUIRED TO BE REPORTED ON UNITED
STATES ACCOUNTS.—
‘‘(1) IN GENERAL.—The agreement described in subsection
(b) shall require the foreign financial institution to report the
following with respect to each United States account maintained
by such institution:
‘‘(A) The name, address, and TIN of each account holder
which is a specified United States person and, in the case
of any account holder which is a United States owned
foreign entity, the name, address, and TIN of each substantial
United States owner of such entity.
‘‘(B) The account number.
‘‘(C) The account balance or value (determined at such
time and in such manner as the Secretary may provide).
‘‘(D) Except to the extent provided by the Secretary,
the gross receipts and gross withdrawals or payments from
the account (determined for such period and in such
manner as the Secretary may provide).
‘‘(2) ELECTION TO BE SUBJECT TO SAME REPORTING AS
UNITED STATES FINANCIAL INSTITUTIONS.—In the case of a foreign
financial institution which elects the application of this
paragraph—
‘‘(A) subparagraphs (C) and (D) of paragraph (1) shall
not apply, and
‘‘(B) the agreement described in subsection (b) shall
require such foreign financial institution to report such
information with respect to each United States account
maintained by such institution as such institution would
be required to report under sections 6041, 6042, 6045,
and 6049 if—
‘‘(i) such institution were a United States person,
and
Applicability.
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124 STAT. 100 PUBLIC LAW 111–147—MAR. 18, 2010
‘‘(ii) each holder of such account which is a specified
United States person or United States owned foreign
entity were a natural person and citizen of the
United States.
An election under this paragraph shall be made at such
time, in such manner, and subject to such conditions as
the Secretary may provide.
‘‘(3) SEPARATE REQUIREMENTS FOR QUALIFIED INTERMEDIARIES.—
In the case of a foreign financial institution which
is treated as a qualified intermediary by the Secretary for
purposes of section 1441 and the regulations issued thereunder,
the requirements of this section shall be in addition to any
reporting or other requirements imposed by the Secretary for
purposes of such treatment.
‘‘(d) DEFINITIONS.—For purposes of this section—
‘‘(1) UNITED STATES ACCOUNT.—
‘‘(A) IN GENERAL.—The term ‘United States account’
means any financial account which is held by one or more
specified United States persons or United States owned
foreign entities.
‘‘(B) EXCEPTION FOR CERTAIN ACCOUNTS HELD BY
INDIVIDUALS.—Unless the foreign financial institution
elects to not have this subparagraph apply, such term
shall not include any depository account maintained by
such financial institution if—
‘‘(i) each holder of such account is a natural person,
and
‘‘(ii) with respect to each holder of such account,
the aggregate value of all depository accounts held
(in whole or in part) by such holder and maintained
by the same financial institution which maintains such
account does not exceed $50,000.
To the extent provided by the Secretary, financial institutions
which are members of the same expanded affiliated
group shall be treated for purposes of clause (ii) as a
single financial institution.
‘‘(C) ELIMINATION OF DUPLICATIVE REPORTING REQUIREMENTS.—
Such term shall not include any financial account
in a foreign financial institution if—
‘‘(i) such account is held by another financial
institution which meets the requirements of subsection
(b), or
‘‘(ii) the holder of such account is otherwise subject
to information reporting requirements which the Secretary
determines would make the reporting required
by this section with respect to United States accounts
duplicative.
‘‘(2) FINANCIAL ACCOUNT.—Except as otherwise provided
by the Secretary, the term ‘financial account’ means, with
respect to any financial institution—
‘‘(A) any depository account maintained by such financial
institution,
‘‘(B) any custodial account maintained by such financial
institution, and
‘‘(C) any equity or debt interest in such financial
institution (other than interests which are regularly traded
on an established securities market).
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 101
Any equity or debt interest which constitutes a financial
account under subparagraph (C) with respect to any financial
institution shall be treated for purposes of this section as maintained
by such financial institution.
‘‘(3) UNITED STATES OWNED FOREIGN ENTITY.—The term
‘United States owned foreign entity’ means any foreign entity
which has one or more substantial United States owners.
‘‘(4) FOREIGN FINANCIAL INSTITUTION.—The term ‘foreign
financial institution’ means any financial institution which is
a foreign entity. Except as otherwise provided by the Secretary,
such term shall not include a financial institution which is
organized under the laws of any possession of the United States.
‘‘(5) FINANCIAL INSTITUTION.—Except as otherwise provided
by the Secretary, the term ‘financial institution’ means any
entity that—
‘‘(A) accepts deposits in the ordinary course of a
banking or similar business,
‘‘(B) as a substantial portion of its business, holds
financial assets for the account of others, or
‘‘(C) is engaged (or holding itself out as being engaged)
primarily in the business of investing, reinvesting, or
trading in securities (as defined in section 475(c)(2) without
regard to the last sentence thereof), partnership interests,
commodities (as defined in section 475(e)(2)), or any interest
(including a futures or forward contract or option) in such
securities, partnership interests, or commodities.
‘‘(6) RECALCITRANT ACCOUNT HOLDER.—The term ‘recalcitrant
account holder’ means any account holder which—
‘‘(A) fails to comply with reasonable requests for the
information referred to in subsection (b)(1)(A) or (c)(1)(A),
or
‘‘(B) fails to provide a waiver described in subsection
(b)(1)(F) upon request.
‘‘(7) PASSTHRU PAYMENT.—The term ‘passthru payment’
means any withholdable payment or other payment to the
extent attributable to a withholdable payment.
‘‘(e) AFFILIATED GROUPS.—
‘‘(1) IN GENERAL.—The requirements of subsections (b) and
(c)(1) shall apply—
‘‘(A) with respect to United States accounts maintained
by the foreign financial institution, and
‘‘(B) except as otherwise provided by the Secretary,
with respect to United States accounts maintained by each
other foreign financial institution (other than any foreign
financial institution which meets the requirements of subsection
(b)) which is a member of the same expanded affiliated
group as such foreign financial institution.
‘‘(2) EXPANDED AFFILIATED GROUP.—For purposes of this
section, the term ‘expanded affiliated group’ means an affiliated
group as defined in section 1504(a), determined—
‘‘(A) by substituting ‘more than 50 percent’ for ‘at least
80 percent’ each place it appears, and
‘‘(B) without regard to paragraphs (2) and (3) of section
1504(b).
A partnership or any other entity (other than a corporation)
shall be treated as a member of an expanded affiliated group
if such entity is controlled (within the meaning of section
Applicability.
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124 STAT. 102 PUBLIC LAW 111–147—MAR. 18, 2010
954(d)(3)) by members of such group (including any entity
treated as a member of such group by reason of this sentence).
‘‘(f) EXCEPTION FOR CERTAIN PAYMENTS.—Subsection (a) shall
not apply to any payment to the extent that the beneficial owner
of such payment is—
‘‘(1) any foreign government, any political subdivision of
a foreign government, or any wholly owned agency or
instrumentality of any one or more of the foregoing,
‘‘(2) any international organization or any wholly owned
agency or instrumentality thereof,
‘‘(3) any foreign central bank of issue, or
‘‘(4) any other class of persons identified by the Secretary
for purposes of this subsection as posing a low risk of tax
evasion.
‘‘SEC. 1472. WITHHOLDABLE PAYMENTS TO OTHER FOREIGN ENTITIES.
‘‘(a) IN GENERAL.—In the case of any withholdable payment
to a non-financial foreign entity, if—
‘‘(1) the beneficial owner of such payment is such entity
or any other non-financial foreign entity, and
‘‘(2) the requirements of subsection (b) are not met with
respect to such beneficial owner,
then the withholding agent with respect to such payment shall
deduct and withhold from such payment a tax equal to 30 percent
of the amount of such payment.
‘‘(b) REQUIREMENTS FOR WAIVER OF WITHHOLDING.—The
requirements of this subsection are met with respect to the beneficial
owner of a payment if—
‘‘(1) such beneficial owner or the payee provides the withholding
agent with either—
‘‘(A) a certification that such beneficial owner does
not have any substantial United States owners, or
‘‘(B) the name, address, and TIN of each substantial
United States owner of such beneficial owner,
‘‘(2) the withholding agent does not know, or have reason
to know, that any information provided under paragraph (1)
is incorrect, and
‘‘(3) the withholding agent reports the information provided
under paragraph (1)(B) to the Secretary in such manner as
the Secretary may provide.
‘‘(c) EXCEPTIONS.—Subsection (a) shall not apply to—
‘‘(1) except as otherwise provided by the Secretary, any
payment beneficially owned by—
‘‘(A) any corporation the stock of which is regularly
traded on an established securities market,
‘‘(B) any corporation which is a member of the same
expanded affiliated group (as defined in section 1471(e)(2)
without regard to the last sentence thereof) as a corporation
described in subparagraph (A),
‘‘(C) any entity which is organized under the laws
of a possession of the United States and which is wholly
owned by one or more bona fide residents (as defined
in section 937(a)) of such possession,
‘‘(D) any foreign government, any political subdivision
of a foreign government, or any wholly owned agency or
instrumentality of any one or more of the foregoing,
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 103
‘‘(E) any international organization or any wholly
owned agency or instrumentality thereof,
‘‘(F) any foreign central bank of issue, or
‘‘(G) any other class of persons identified by the Secretary
for purposes of this subsection, and
‘‘(2) any class of payments identified by the Secretary for
purposes of this subsection as posing a low risk of tax evasion.
‘‘(d) NON-FINANCIAL FOREIGN ENTITY.—For purposes of this
section, the term ‘non-financial foreign entity’ means any foreign
entity which is not a financial institution (as defined in section
1471(d)(5)).
‘‘SEC. 1473. DEFINITIONS.
‘‘For purposes of this chapter—
‘‘(1) WITHHOLDABLE PAYMENT.—Except as otherwise provided
by the Secretary—
‘‘(A) IN GENERAL.—The term ‘withholdable payment’
means—
‘‘(i) any payment of interest (including any original
issue discount), dividends, rents, salaries, wages, premiums,
annuities, compensations, remunerations,
emoluments, and other fixed or determinable annual
or periodical gains, profits, and income, if such payment
is from sources within the United States, and
‘‘(ii) any gross proceeds from the sale or other
disposition of any property of a type which can produce
interest or dividends from sources within the United
States.
‘‘(B) EXCEPTION FOR INCOME CONNECTED WITH UNITED
STATES BUSINESS.—Such term shall not include any item
of income which is taken into account under section
871(b)(1) or 882(a)(1) for the taxable year.
‘‘(C) SPECIAL RULE FOR SOURCING INTEREST PAID BY
FOREIGN BRANCHES OF DOMESTIC FINANCIAL INSTITUTIONS.—
Subparagraph (B) of section 861(a)(1) shall not
apply.
‘‘(2) SUBSTANTIAL UNITED STATES OWNER.—
‘‘(A) IN GENERAL.—The term ‘substantial United States
owner’ means—
‘‘(i) with respect to any corporation, any specified
United States person which owns, directly or indirectly,
more than 10 percent of the stock of such corporation
(by vote or value),
‘‘(ii) with respect to any partnership, any specified
United States person which owns, directly or indirectly,
more than 10 percent of the profits interests or capital
interests in such partnership, and
‘‘(iii) in the case of a trust—
‘‘(I) any specified United States person treated
as an owner of any portion of such trust under
subpart E of part I of subchapter J of chapter
1, and
‘‘(II) to the extent provided by the Secretary
in regulations or other guidance, any specified
United States person which holds, directly or
indirectly, more than 10 percent of the beneficial
interests of such trust.
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124 STAT. 104 PUBLIC LAW 111–147—MAR. 18, 2010
‘‘(B) SPECIAL RULE FOR INVESTMENT VEHICLES.—In the
case of any financial institution described in section
1471(d)(5)(C), clauses (i), (ii), and (iii) of subparagraph
(A) shall be applied by substituting ‘0 percent’ for ‘10
percent’.
‘‘(3) SPECIFIED UNITED STATES PERSON.—Except as otherwise
provided by the Secretary, the term ‘specified United
States person’ means any United States person other than—
‘‘(A) any corporation the stock of which is regularly
traded on an established securities market,
‘‘(B) any corporation which is a member of the same
expanded affiliated group (as defined in section 1471(e)(2)
without regard to the last sentence thereof) as a corporation
the stock of which is regularly traded on an established
securities market,
‘‘(C) any organization exempt from taxation under section
501(a) or an individual retirement plan,
‘‘(D) the United States or any wholly owned agency
or instrumentality thereof,
‘‘(E) any State, the District of Columbia, any possession
of the United States, any political subdivision of any of
the foregoing, or any wholly owned agency or instrumentality
of any one or more of the foregoing,
‘‘(F) any bank (as defined in section 581),
‘‘(G) any real estate investment trust (as defined in
section 856),
‘‘(H) any regulated investment company (as defined
in section 851),
‘‘(I) any common trust fund (as defined in section
584(a)), and
‘‘(J) any trust which—
‘‘(i) is exempt from tax under section 664(c), or
‘‘(ii) is described in section 4947(a)(1).
‘‘(4) WITHHOLDING AGENT.—The term ‘withholding agent’
means all persons, in whatever capacity acting, having the
control, receipt, custody, disposal, or payment of any
withholdable payment.
‘‘(5) FOREIGN ENTITY.—The term ‘foreign entity’ means any
entity which is not a United States person.
‘‘SEC. 1474. SPECIAL RULES.
‘‘(a) LIABILITY FOR WITHHELD TAX.—Every person required to
deduct and withhold any tax under this chapter is hereby made
liable for such tax and is hereby indemnified against the claims
and demands of any person for the amount of any payments made
in accordance with the provisions of this chapter.
‘‘(b) CREDITS AND REFUNDS.—
‘‘(1) IN GENERAL.—Except as provided in paragraph (2),
the determination of whether any tax deducted and withheld
under this chapter results in an overpayment by the beneficial
owner of the payment to which such tax is attributable shall
be made as if such tax had been deducted and withheld under
subchapter A of chapter 3.
‘‘(2) SPECIAL RULE WHERE FOREIGN FINANCIAL INSTITUTION
IS BENEFICIAL OWNER OF PAYMENT.—
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 105
‘‘(A) IN GENERAL.—In the case of any tax properly
deducted and withheld under section 1471 from a specified
financial institution payment—
‘‘(i) if the foreign financial institution referred to
in subparagraph (B) with respect to such payment
is entitled to a reduced rate of tax with respect to
such payment by reason of any treaty obligation of
the United States—
‘‘(I) the amount of any credit or refund with
respect to such tax shall not exceed the amount
of credit or refund attributable to such reduction
in rate, and
‘‘(II) no interest shall be allowed or paid with
respect to such credit or refund, and
‘‘(ii) if such foreign financial institution is not so
entitled, no credit or refund shall be allowed or paid
with respect to such tax.
‘‘(B) SPECIFIED FINANCIAL INSTITUTION PAYMENT.—The
term ‘specified financial institution payment’ means any
payment if the beneficial owner of such payment is a foreign
financial institution.
‘‘(3) REQUIREMENT TO IDENTIFY SUBSTANTIAL UNITED STATES
OWNERS.—No credit or refund shall be allowed or paid with
respect to any tax properly deducted and withheld under this
chapter unless the beneficial owner of the payment provides
the Secretary such information as the Secretary may require
to determine whether such beneficial owner is a United States
owned foreign entity (as defined in section 1471(d)(3)) and
the identity of any substantial United States owners of such
entity.
‘‘(c) CONFIDENTIALITY OF INFORMATION.—
‘‘(1) IN GENERAL.—For purposes of this chapter, rules
similar to the rules of section 3406(f) shall apply.
‘‘(2) DISCLOSURE OF LIST OF PARTICIPATING FOREIGN FINANCIAL
INSTITUTIONS PERMITTED.—The identity of a foreign financial
institution which meets the requirements of section 1471(b)
shall not be treated as return information for purposes of
section 6103.
‘‘(d) COORDINATION WITH OTHER WITHHOLDING PROVISIONS.—
The Secretary shall provide for the coordination of this chapter
with other withholding provisions under this title, including providing
for the proper crediting of amounts deducted and withheld
under this chapter against amounts required to be deducted and
withheld under such other provisions.
‘‘(e) TREATMENT OF WITHHOLDING UNDER AGREEMENTS.—Any
tax deducted and withheld pursuant to an agreement described
in section 1471(b) shall be treated for purposes of this title as
a tax deducted and withheld by a withholding agent under section
1471(a).
‘‘(f) REGULATIONS.—The Secretary shall prescribe such regulations
or other guidance as may be necessary or appropriate to
carry out the purposes of, and prevent the avoidance of, this
chapter.’’.
(b) SPECIAL RULE FOR INTEREST ON OVERPAYMENTS.—Subsection
(e) of section 6611 is amended by adding at the end the
following new paragraph:
26 USC 6611.
Applicability.
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124 STAT. 106 PUBLIC LAW 111–147—MAR. 18, 2010
‘‘(4) CERTAIN WITHHOLDING TAXES.—In the case of any overpayment
resulting from tax deducted and withheld under
chapter 3 or 4, paragraphs (1), (2), and (3) shall be applied
by substituting ‘180 days’ for ‘45 days’ each place it appears.’’.
(c) CONFORMING AMENDMENTS.—
(1) Section 6414 is amended by inserting ‘‘or 4’’ after
‘‘chapter 3’’.
(2) Paragraph (1) of section 6501(b) is amended by inserting
‘‘4,’’ after ‘‘chapter 3,’’.
(3) Paragraph (2) of section 6501(b) is amended—
(A) by inserting ‘‘4,’’ after ‘‘chapter 3,’’ in the text
thereof, and
(B) by striking ‘‘TAXES AND TAX IMPOSED BY CHAPTER
3’’ in the heading thereof and inserting ‘‘AND WITHHOLDING
TAXES’’.
(4) Paragraph (3) of section 6513(b) is amended—
(A) by inserting ‘‘or 4’’ after ‘‘chapter 3’’, and
(B) by inserting ‘‘or 1474(b)’’ after ‘‘section 1462’’.
(5) Subsection (c) of section 6513 is amended by inserting
‘‘4,’’ after ‘‘chapter 3,’’.
(6) Paragraph (1) of section 6724(d) is amended by inserting
‘‘under chapter 4 or’’ after ‘‘filed with the Secretary’’ in the
last sentence thereof.
(7) Paragraph (2) of section 6724(d) is amended by inserting
‘‘or 4’’ after ‘‘chapter 3’’.
(8) The table of chapters of the Internal Revenue Code
of 1986 is amended by adding at the end the following new
item:
‘‘CHAPTER 4—TAXES TO ENFORCE REPORTING ON CERTAIN FOREIGN ACCOUNTS.’’.
(d) EFFECTIVE DATE.—
(1) IN GENERAL.—Except as otherwise provided in this subsection,
the amendments made by this section shall apply to
payments made after December 31, 2012.
(2) GRANDFATHERED TREATMENT OF OUTSTANDING OBLIGATIONS.—
The amendments made by this section shall not require
any amount to be deducted or withheld from any payment
under any obligation outstanding on the date which is 2 years
after the date of the enactment of this Act or from the gross
proceeds from any disposition of such an obligation.
(3) INTEREST ON OVERPAYMENTS.—The amendment made
by subsection (b) shall apply—
(A) in the case of such amendment’s application to
paragraph (1) of section 6611(e) of the Internal Revenue
Code of 1986, to returns the due date for which (determined
without regard to extensions) is after the date of the enactment
of this Act,
(B) in the case of such amendment’s application to
paragraph (2) of such section, to claims for credit or refund
of any overpayment filed after the date of the enactment
of this Act (regardless of the taxable period to which such
refund relates), and
(C) in the case of such amendment’s application to
paragraph (3) of such section, to refunds paid after the
date of the enactment of this Act (regardless of the taxable
period to which such refund relates).
Applicability.
26 USC 1471
note.
26 USC 6414.
Applicability.
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 107
SEC. 502. REPEAL OF CERTAIN FOREIGN EXCEPTIONS TO REGISTERED
BOND REQUIREMENTS.
(a) REPEAL OF EXCEPTION TO DENIAL OF DEDUCTION FOR
INTEREST ON NON-REGISTERED BONDS.—
(1) IN GENERAL.—Paragraph (2) of section 163(f) is amended
by striking subparagraph (B) and by redesignating subparagraph
(C) as subparagraph (B).
(2) CONFORMING AMENDMENTS.—
(A) Paragraph (2) of section 149(a) is amended by
inserting ‘‘or’’ at the end of subparagraph (A), by striking
‘‘, or’’ at the end of subparagraph (B) and inserting a
period, and by striking subparagraph (C).
(B) Subparagraph (A) of section 163(f)(2) is amended
by inserting ‘‘or’’ at the end of clause (ii), by striking
‘‘, or’’ at the end of clause (iii) and inserting a period,
and by striking clause (iv).
(C) Subparagraph (B) of section 163(f)(2), as redesignated
by paragraph (1), is amended—
(i) by striking ‘‘, and subparagraph (B),’’ in the
matter preceding clause (i), and
(ii) by amending clause (i) to read as follows:
‘‘(i) such obligation is of a type which the Secretary
has determined by regulations to be used frequently
in avoiding Federal taxes, and’’.
(D) Sections 165(j)(2)(A) and 1287(b)(1) are each
amended by striking ‘‘except that clause (iv) of subparagraph
(A), and subparagraph (B), of such section shall
not apply’’.
(b) REPEAL OF TREATMENT AS PORTFOLIO DEBT.—
(1) IN GENERAL.—Paragraph (2) of section 871(h) is
amended to read as follows:
‘‘(2) PORTFOLIO INTEREST.—For purposes of this subsection,
the term ‘portfolio interest’ means any interest (including
original issue discount) which—
‘‘(A) would be subject to tax under subsection (a) but
for this subsection, and
‘‘(B) is paid on an obligation—
‘‘(i) which is in registered form, and
‘‘(ii) with respect to which—
‘‘(I) the United States person who would otherwise
be required to deduct and withhold tax from
such interest under section 1441(a) receives a
statement (which meets the requirements of paragraph
(5)) that the beneficial owner of the obligation
is not a United States person, or
‘‘(II) the Secretary has determined that such
a statement is not required in order to carry out
the purposes of this subsection.’’.
(2) CONFORMING AMENDMENTS.—
(A) Section 871(h)(3)(A) is amended by striking
‘‘subparagraph (A) or (B) of’’.
(B) Paragraph (2) of section 881(c) is amended to read
as follows:
‘‘(2) PORTFOLIO INTEREST.—For purposes of this subsection,
the term ‘portfolio interest’ means any interest (including
original issue discount) which—
26 USC 163.
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124 STAT. 108 PUBLIC LAW 111–147—MAR. 18, 2010
‘‘(A) would be subject to tax under subsection (a) but
for this subsection, and
‘‘(B) is paid on an obligation—
‘‘(i) which is in registered form, and
‘‘(ii) with respect to which—
‘‘(I) the person who would otherwise be
required to deduct and withhold tax from such
interest under section 1442(a) receives a statement
which meets the requirements of section 871(h)(5)
that the beneficial owner of the obligation is not
a United States person, or
‘‘(II) the Secretary has determined that such
a statement is not required in order to carry out
the purposes of this subsection.’’.
(c) DEMATERIALIZED BOOK ENTRY SYSTEMS TREATED AS REGISTERED
FORM.—Paragraph (3) of section 163(f) is amended by
inserting ‘‘, except that a dematerialized book entry system or
other book entry system specified by the Secretary shall be treated
as a book entry system described in such section’’ before the period
at the end.
(d) REPEAL OF EXCEPTION TO REQUIREMENT THAT TREASURY
OBLIGATIONS BE IN REGISTERED FORM.—
(1) IN GENERAL.—Subsection (g) of section 3121 of title
31, United States Code, is amended by striking paragraph
(2) and by redesignating paragraphs (3) and (4) as paragraphs
(2) and (3), respectively.
(2) CONFORMING AMENDMENTS.—Paragraph (1) of section
3121(g) of such title is amended—
(A) by adding ‘‘or’’ at the end of subparagraph (A),
(B) by striking ‘‘; or’’ at the end of subparagraph (B)
and inserting a period, and
(C) by striking subparagraph (C).
(e) PRESERVATION OF EXCEPTION FOR EXCISE TAX PURPOSES.—
Paragraph (1) of section 4701(b) is amended to read as follows:
‘‘(1) REGISTRATION-REQUIRED OBLIGATION.—
‘‘(A) IN GENERAL.—The term ‘registration-required
obligation’ has the same meaning as when used in section
163(f), except that such term shall not include any obligation
which—
‘‘(i) is required to be registered under section
149(a), or
‘‘(ii) is described in subparagraph (B).
‘‘(B) CERTAIN OBLIGATIONS NOT INCLUDED.—An obligation
is described in this subparagraph if—
‘‘(i) there are arrangements reasonably designed
to ensure that such obligation will be sold (or resold
in connection with the original issue) only to a person
who is not a United States person,
‘‘(ii) interest on such obligation is payable only
outside the United States and its possessions, and
‘‘(iii) on the face of such obligation there is a statement
that any United States person who holds such
obligation will be subject to limitations under the
United States income tax laws.’’.
(f) EFFECTIVE DATE.—The amendments made by this section
shall apply to obligations issued after the date which is 2 years
after the date of the enactment of this Act.
Applicability.
26 USC 149 note.
26 USC 4701.
26 USC 163.
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 109
PART II—UNDER REPORTING WITH RESPECT
TO FOREIGN ASSETS
SEC. 511. DISCLOSURE OF INFORMATION WITH RESPECT TO FOREIGN
FINANCIAL ASSETS.
(a) IN GENERAL.—Subpart A of part III of subchapter A of
chapter 61 is amended by inserting after section 6038C the following
new section:
‘‘SEC. 6038D. INFORMATION WITH RESPECT TO FOREIGN FINANCIAL
ASSETS.
‘‘(a) IN GENERAL.—Any individual who, during any taxable
year, holds any interest in a specified foreign financial asset shall
attach to such person’s return of tax imposed by subtitle A for
such taxable year the information described in subsection (c) with
respect to each such asset if the aggregate value of all such assets
exceeds $50,000 (or such higher dollar amount as the Secretary
may prescribe).
‘‘(b) SPECIFIED FOREIGN FINANCIAL ASSETS.—For purposes of
this section, the term ‘specified foreign financial asset’ means—
‘‘(1) any financial account (as defined in section 1471(d)(2))
maintained by a foreign financial institution (as defined in
section 1471(d)(4)), and
‘‘(2) any of the following assets which are not held in
an account maintained by a financial institution (as defined
in section 1471(d)(5))—
‘‘(A) any stock or security issued by a person other
than a United States person,
‘‘(B) any financial instrument or contract held for
investment that has an issuer or counterparty which is
other than a United States person, and
‘‘(C) any interest in a foreign entity (as defined in
section 1473).
‘‘(c) REQUIRED INFORMATION.—The information described in this
subsection with respect to any asset is:
‘‘(1) In the case of any account, the name and address
of the financial institution in which such account is maintained
and the number of such account.
‘‘(2) In the case of any stock or security, the name and
address of the issuer and such information as is necessary
to identify the class or issue of which such stock or security
is a part.
‘‘(3) In the case of any other instrument, contract, or
interest—
‘‘(A) such information as is necessary to identify such
instrument, contract, or interest, and
‘‘(B) the names and addresses of all issuers and
counterparties with respect to such instrument, contract,
or interest.
‘‘(4) The maximum value of the asset during the taxable
year.
‘‘(d) PENALTY FOR FAILURE TO DISCLOSE.—
‘‘(1) IN GENERAL.—If any individual fails to furnish the
information described in subsection (c) with respect to any
taxable year at the time and in the manner described in subsection
(a), such person shall pay a penalty of $10,000.
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124 STAT. 110 PUBLIC LAW 111–147—MAR. 18, 2010
‘‘(2) INCREASE IN PENALTY WHERE FAILURE CONTINUES
AFTER NOTIFICATION.—If any failure described in paragraph
(1) continues for more than 90 days after the day on which
the Secretary mails notice of such failure to the individual,
such individual shall pay a penalty (in addition to the penalties
under paragraph (1)) of $10,000 for each 30-day period (or
fraction thereof) during which such failure continues after the
expiration of such 90-day period. The penalty imposed under
this paragraph with respect to any failure shall not exceed
$50,000.
‘‘(e) PRESUMPTION THAT VALUE OF SPECIFIED FOREIGN FINANCIAL
ASSETS EXCEEDS DOLLAR THRESHOLD.—If—
‘‘(1) the Secretary determines that an individual has an
interest in one or more specified foreign financial assets, and
‘‘(2) such individual does not provide sufficient information
to demonstrate the aggregate value of such assets,
then the aggregate value of such assets shall be treated as being
in excess of $50,000 (or such higher dollar amount as the Secretary
prescribes for purposes of subsection (a)) for purposes of assessing
the penalties imposed under this section.
‘‘(f) APPLICATION TO CERTAIN ENTITIES.—To the extent provided
by the Secretary in regulations or other guidance, the provisions
of this section shall apply to any domestic entity which is formed
or availed of for purposes of holding, directly or indirectly, specified
foreign financial assets, in the same manner as if such entity
were an individual.
‘‘(g) REASONABLE CAUSE EXCEPTION.—No penalty shall be
imposed by this section on any failure which is shown to be due
to reasonable cause and not due to willful neglect. The fact that
a foreign jurisdiction would impose a civil or criminal penalty
on the taxpayer (or any other person) for disclosing the required
information is not reasonable cause.
‘‘(h) REGULATIONS.—The Secretary shall prescribe such regulations
or other guidance as may be necessary or appropriate to
carry out the purposes of this section, including regulations or
other guidance which provide appropriate exceptions from the
application of this section in the case of—
‘‘(1) classes of assets identified by the Secretary, including
any assets with respect to which the Secretary determines
that disclosure under this section would be duplicative of other
disclosures,
‘‘(2) nonresident aliens, and
‘‘(3) bona fide residents of any possession of the United
States.’’.
(b) CLERICAL AMENDMENT.—The table of sections for subpart
A of part III of subchapter A of chapter 61 is amended by inserting
after the item relating to section 6038C the following new item:
‘‘Sec. 6038D. Information with respect to foreign financial assets.’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall apply to taxable years beginning after the date of the enactment
of this Act.
SEC. 512. PENALTIES FOR UNDERPAYMENTS ATTRIBUTABLE TO
UNDISCLOSED FOREIGN FINANCIAL ASSETS.
(a) IN GENERAL.—Section 6662, as amended by this Act, is
amended—
26 USC 6662.
Applicability.
26 USC 6038D
note.
Determination.
Time period.
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 111
(1) in subsection (b), by inserting after paragraph (6) the
following new paragraph:
‘‘(7) Any undisclosed foreign financial asset understatement.’’,
and
(2) by adding at the end the following new subsection:
‘‘(j) UNDISCLOSED FOREIGN FINANCIAL ASSET UNDERSTATEMENT.—
‘‘(1) IN GENERAL.—For purposes of this section, the term
‘undisclosed foreign financial asset understatement’ means, for
any taxable year, the portion of the understatement for such
taxable year which is attributable to any transaction involving
an undisclosed foreign financial asset.
‘‘(2) UNDISCLOSED FOREIGN FINANCIAL ASSET.—For purposes
of this subsection, the term ‘undisclosed foreign financial asset’
means, with respect to any taxable year, any asset with respect
to which information was required to be provided under section
6038, 6038B, 6038D, 6046A, or 6048 for such taxable year
but was not provided by the taxpayer as required under the
provisions of those sections.
‘‘(3) INCREASE IN PENALTY FOR UNDISCLOSED FOREIGN
FINANCIAL ASSET UNDERSTATEMENTS.—In the case of any portion
of an underpayment which is attributable to any undisclosed
foreign financial asset understatement, subsection (a)
shall be applied with respect to such portion by substituting
‘40 percent’ for ‘20 percent’.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply to taxable years beginning after the date of the enactment
of this Act.
SEC. 513. MODIFICATION OF STATUTE OF LIMITATIONS FOR SIGNIFICANT
OMISSION OF INCOME IN CONNECTION WITH FOREIGN
ASSETS.
(a) EXTENSION OF STATUTE OF LIMITATIONS.—
(1) IN GENERAL.—Paragraph (1) of section 6501(e) is
amended by redesignating subparagraphs (A) and (B) as subparagraphs
(B) and (C), respectively, and by inserting before
subparagraph (B) (as so redesignated) the following new
subparagraph:
‘‘(A) GENERAL RULE.—If the taxpayer omits from gross
income an amount properly includible therein and—
‘‘(i) such amount is in excess of 25 percent of
the amount of gross income stated in the return, or
‘‘(ii) such amount—
‘‘(I) is attributable to one or more assets with
respect to which information is required to be
reported under section 6038D (or would be so
required if such section were applied without
regard to the dollar threshold specified in subsection
(a) thereof and without regard to any exceptions
provided pursuant to subsection (h)(1)
thereof), and
‘‘(II) is in excess of $5,000,
the tax may be assessed, or a proceeding in court for
collection of such tax may be begun without assessment,
at any time within 6 years after the return was filed.’’.
(2) CONFORMING AMENDMENTS.—
Time period.
26 USC 6501.
Applicability.
26 USC 6662
note.
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124 STAT. 112 PUBLIC LAW 111–147—MAR. 18, 2010
(A) Subparagraph (B) of section 6501(e)(1), as redesignated
by paragraph (1), is amended by striking all that
precedes clause (i) and inserting the following:
‘‘(B) DETERMINATION OF GROSS INCOME.—For purposes
of subparagraph (A)—’’.
(B) Paragraph (2) of section 6229(c) is amended by
striking ‘‘which is in excess of 25 percent of the amount
of gross income stated in its return’’ and inserting ‘‘and
such amount is described in clause (i) or (ii) of section
6501(e)(1)(A)’’.
(b) ADDITIONAL REPORTS SUBJECT TO EXTENDED PERIOD.—Paragraph
(8) of section 6501(c) is amended—
(1) by inserting ‘‘pursuant to an election under section
1295(b) or’’ before ‘‘under section 6038’’,
(2) by inserting ‘‘1298(f),’’ before ‘‘6038’’, and
(3) by inserting ‘‘6038D,’’ after ‘‘6038B,’’.
(c) CLARIFICATIONS RELATED TO FAILURE TO DISCLOSE FOREIGN
TRANSFERS.—Paragraph (8) of section 6501(c) is amended by
striking ‘‘event’’ and inserting ‘‘tax return, event,’’.
(d) EFFECTIVE DATE.—The amendments made by this section
shall apply to—
(1) returns filed after the date of the enactment of this
Act; and
(2) returns filed on or before such date if the period specified
in section 6501 of the Internal Revenue Code of 1986
(determined without regard to such amendments) for assessment
of such taxes has not expired as of such date.
PART III—OTHER DISCLOSURE PROVISIONS
SEC. 521. REPORTING OF ACTIVITIES WITH RESPECT TO PASSIVE FOREIGN
INVESTMENT COMPANIES.
(a) IN GENERAL.—Section 1298 is amended by redesignating
subsection (f) as subsection (g) and by inserting after subsection
(e) the following new subsection:
‘‘(f) REPORTING REQUIREMENT.—Except as otherwise provided
by the Secretary, each United States person who is a shareholder
of a passive foreign investment company shall file an annual report
containing such information as the Secretary may require.’’.
(b) CONFORMING AMENDMENT.—Subsection (e) of section 1291
is amended by striking ‘‘, (d), and (f)’’ and inserting ‘‘and (d)’’.
(c) EFFECTIVE DATE.—The amendments made by this section
take effect on the date of the enactment of this Act.
SEC. 522. SECRETARY PERMITTED TO REQUIRE FINANCIAL INSTITUTIONS
TO FILE CERTAIN RETURNS RELATED TO WITHHOLDING
ON FOREIGN TRANSFERS ELECTRONICALLY.
(a) IN GENERAL.—Subsection (e) of section 6011 is amended
by adding at the end the following new paragraph:
‘‘(4) SPECIAL RULE FOR RETURNS FILED BY FINANCIAL
INSTITUTIONS WITH RESPECT TO WITHHOLDING ON FOREIGN
TRANSFERS.—The numerical limitation under paragraph (2)(A)
shall not apply to any return filed by a financial institution
(as defined in section 1471(d)(5)) with respect to tax for which
such institution is made liable under section 1461 or 1474(a).’’.
26 USC 1291
note.
Applicability.
26 USC 6229
note.
26 USC 6501.
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 113
(b) CONFORMING AMENDMENT.—Subsection (c) of section 6724
is amended by inserting ‘‘or with respect to a return described
in section 6011(e)(4)’’ before the end period.
(c) EFFECTIVE DATE.—The amendment made by this section
shall apply to returns the due date for which (determined without
regard to extensions) is after the date of the enactment of this
Act.
PART IV—PROVISIONS RELATED TO FOREIGN
TRUSTS
SEC. 531. CLARIFICATIONS WITH RESPECT TO FOREIGN TRUSTS
WHICH ARE TREATED AS HAVING A UNITED STATES BENEFICIARY.
(a) IN GENERAL.—Paragraph (1) of section 679(c) is amended
by adding at the end the following:
‘‘For purposes of subparagraph (A), an amount shall be treated
as accumulated for the benefit of a United States person even
if the United States person’s interest in the trust is contingent
on a future event.’’.
(b) CLARIFICATION REGARDING DISCRETION TO IDENTIFY BENEFICIARIES.—
Subsection (c) of section 679 is amended by adding
at the end the following new paragraph:
‘‘(4) SPECIAL RULE IN CASE OF DISCRETION TO IDENTIFY
BENEFICIARIES.—For purposes of paragraph (1)(A), if any person
has the discretion (by authority given in the trust agreement,
by power of appointment, or otherwise) of making a distribution
from the trust to, or for the benefit of, any person, such trust
shall be treated as having a beneficiary who is a United States
person unless—
‘‘(A) the terms of the trust specifically identify the
class of persons to whom such distributions may be made,
and
‘‘(B) none of those persons are United States persons
during the taxable year.’’.
(c) CLARIFICATION THAT CERTAIN AGREEMENTS AND UNDERSTANDINGS
ARE TERMS OF THE TRUST.—Subsection (c) of section
679, as amended by subsection (b), is amended by adding at the
end the following new paragraph:
‘‘(5) CERTAIN AGREEMENTS AND UNDERSTANDINGS TREATED
AS TERMS OF THE TRUST.—For purposes of paragraph (1)(A),
if any United States person who directly or indirectly transfers
property to the trust is directly or indirectly involved in any
agreement or understanding (whether written, oral, or otherwise)
that may result in the income or corpus of the trust
being paid or accumulated to or for the benefit of a United
States person, such agreement or understanding shall be
treated as a term of the trust.’’.
SEC. 532. PRESUMPTION THAT FOREIGN TRUST HAS UNITED STATES
BENEFICIARY.
(a) IN GENERAL.—Section 679 is amended by redesignating
subsection (d) as subsection (e) and inserting after subsection (c)
the following new subsection:
‘‘(d) PRESUMPTION THAT FOREIGN TRUST HAS UNITED STATES
BENEFICIARY.—If a United States person directly or indirectly transfers
property to a foreign trust (other than a trust described in
26 USC 6011
note.
26 USC 6724.
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124 STAT. 114 PUBLIC LAW 111–147—MAR. 18, 2010
section 6048(a)(3)(B)(ii)), the Secretary may treat such trust as
having a United States beneficiary for purposes of applying this
section to such transfer unless such person—
‘‘(1) submits such information to the Secretary as the Secretary
may require with respect to such transfer, and
‘‘(2) demonstrates to the satisfaction of the Secretary that
such trust satisfies the requirements of subparagraphs (A) and
(B) of subsection (c)(1).’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply to transfers of property after the date of the enactment
of this Act.
SEC. 533. UNCOMPENSATED USE OF TRUST PROPERTY.
(a) IN GENERAL.—Paragraph (1) of section 643(i) is amended—
(1) by striking ‘‘directly or indirectly to’’ and inserting ‘‘(or
permits the use of any other trust property) directly or
indirectly to or by’’, and
(2) by inserting ‘‘(or the fair market value of the use of
such property)’’ after ‘‘the amount of such loan’’.
(b) EXCEPTION FOR COMPENSATED USE.—Paragraph (2) of section
643(i) is amended by adding at the end the following new
subparagraph:
‘‘(E) EXCEPTION FOR COMPENSATED USE OF PROPERTY.—
In the case of the use of any trust property other than
a loan of cash or marketable securities, paragraph (1) shall
not apply to the extent that the trust is paid the fair
market value of such use within a reasonable period of
time of such use.’’.
(c) APPLICATION TO GRANTOR TRUSTS.—Subsection (c) of section
679, as amended by this Act, is amended by adding at the end
the following new paragraph:
‘‘(6) UNCOMPENSATED USE OF TRUST PROPERTY TREATED
AS A PAYMENT.—For purposes of this subsection, a loan of
cash or marketable securities (or the use of any other trust
property) directly or indirectly to or by any United States
person (whether or not a beneficiary under the terms of the
trust) shall be treated as paid or accumulated for the benefit
of a United States person. The preceding sentence shall not
apply to the extent that the United States person repays the
loan at a market rate of interest (or pays the fair market
value of the use of such property) within a reasonable period
of time.’’.
(d) CONFORMING AMENDMENTS.—Paragraph (3) of section 643(i)
is amended—
(1) by inserting ‘‘(or use of property)’’ after ‘‘If any loan’’,
(2) by inserting ‘‘or the return of such property’’ before
‘‘shall be disregarded’’, and
(3) by striking ‘‘REGARDING LOAN PRINCIPAL’’ in the heading
thereof.
(e) EFFECTIVE DATE.—The amendments made by this section
shall apply to loans made, and uses of property, after the date
of the enactment of this Act.
SEC. 534. REPORTING REQUIREMENT OF UNITED STATES OWNERS OF
FOREIGN TRUSTS.
(a) IN GENERAL.—Paragraph (1) of section 6048(b) is amended
by inserting ‘‘shall submit such information as the Secretary may
Applicability.
26 USC 643 note.
26 USC 643.
Applicability.
26 USC 679 note.
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 115
prescribe with respect to such trust for such year and’’ before
‘‘shall be responsible to ensure’’.
(b) EFFECTIVE DATE.—The amendment made by this section
shall apply to taxable years beginning after the date of the enactment
of this Act.
SEC. 535. MINIMUM PENALTY WITH RESPECT TO FAILURE TO REPORT
ON CERTAIN FOREIGN TRUSTS.
(a) IN GENERAL.—Subsection (a) of section 6677 is amended—
(1) by inserting ‘‘the greater of $10,000 or’’ before ‘‘35
percent’’, and
(2) by striking the last sentence and inserting the following:
‘‘At such time as the gross reportable amount with respect
to any failure can be determined by the Secretary, any subsequent
penalty imposed under this subsection with respect to
such failure shall be reduced as necessary to assure that the
aggregate amount of such penalties do not exceed the gross
reportable amount (and to the extent that such aggregate
amount already exceeds the gross reportable amount the Secretary
shall refund such excess to the taxpayer).’’
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply to notices and returns required to be filed after
December 31, 2009.
PART V—SUBSTITUTE DIVIDENDS AND DIVIDEND
EQUIVALENT PAYMENTS RECEIVED
BY FOREIGN PERSONS TREATED AS DIVIDENDS
SEC. 541. SUBSTITUTE DIVIDENDS AND DIVIDEND EQUIVALENT PAYMENTS
RECEIVED BY FOREIGN PERSONS TREATED AS
DIVIDENDS.
(a) IN GENERAL.—Section 871 is amended by redesignating
subsection (l) as subsection (m) and by inserting after subsection
(k) the following new subsection:
‘‘(l) TREATMENT OF DIVIDEND EQUIVALENT PAYMENTS.—
‘‘(1) IN GENERAL.—For purposes of subsection (a), sections
881 and 4948(a), and chapters 3 and 4, a dividend equivalent
shall be treated as a dividend from sources within the United
States.
‘‘(2) DIVIDEND EQUIVALENT.—For purposes of this subsection,
the term ‘dividend equivalent’ means—
‘‘(A) any substitute dividend made pursuant to a securities
lending or a sale-repurchase transaction that (directly
or indirectly) is contingent upon, or determined by reference
to, the payment of a dividend from sources within the
United States,
‘‘(B) any payment made pursuant to a specified notional
principal contract that (directly or indirectly) is contingent
upon, or determined by reference to, the payment of a
dividend from sources within the United States, and
‘‘(C) any other payment determined by the Secretary
to be substantially similar to a payment described in
subparagraph (A) or (B).
Definitions.
Applicability.
26 USC 6677
note.
26 USC 6677.
Applicability.
26 USC 6048
note.
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124 STAT. 116 PUBLIC LAW 111–147—MAR. 18, 2010
‘‘(3) SPECIFIED NOTIONAL PRINCIPAL CONTRACT.—For purposes
of this subsection, the term ‘specified notional principal
contract’ means—
‘‘(A) any notional principal contract if—
‘‘(i) in connection with entering into such contract,
any long party to the contract transfers the underlying
security to any short party to the contract,
‘‘(ii) in connection with the termination of such
contract, any short party to the contract transfers the
underlying security to any long party to the contract,
‘‘(iii) the underlying security is not readily tradable
on an established securities market,
‘‘(iv) in connection with entering into such contract,
the underlying security is posted as collateral by any
short party to the contract with any long party to
the contract, or
‘‘(v) such contract is identified by the Secretary
as a specified notional principal contract,
‘‘(B) in the case of payments made after the date which
is 2 years after the date of the enactment of this subsection,
any notional principal contract unless the Secretary determines
that such contract is of a type which does not have
the potential for tax avoidance.
‘‘(4) DEFINITIONS.—For purposes of paragraph (3)(A)—
‘‘(A) LONG PARTY.—The term ‘long party’ means, with
respect to any underlying security of any notional principal
contract, any party to the contract which is entitled to
receive any payment pursuant to such contract which is
contingent upon, or determined by reference to, the payment
of a dividend from sources within the United States
with respect to such underlying security.
‘‘(B) SHORT PARTY.—The term ‘short party’ means, with
respect to any underlying security of any notional principal
contract, any party to the contract which is not a long
party with respect to such underlying security.
‘‘(C) UNDERLYING SECURITY.—The term ‘underlying
security’ means, with respect to any notional principal contract,
the security with respect to which the dividend
referred to in paragraph (2)(B) is paid. For purposes of
this paragraph, any index or fixed basket of securities
shall be treated as a single security.
‘‘(5) PAYMENTS DETERMINED ON GROSS BASIS.—For purposes
of this subsection, the term ‘payment’ includes any gross
amount which is used in computing any net amount which
is transferred to or from the taxpayer.
‘‘(6) PREVENTION OF OVER-WITHHOLDING.—In the case of
any chain of dividend equivalents one or more of which is
subject to tax under subsection (a) or section 881, the Secretary
may reduce such tax, but only to the extent that the taxpayer
can establish that such tax has been paid with respect to
another dividend equivalent in such chain, or is not otherwise
due, or as the Secretary determines is appropriate to address
the role of financial intermediaries in such chain. For purposes
of this paragraph, a dividend shall be treated as a dividend
equivalent.
‘‘(7) COORDINATION WITH CHAPTERS 3 AND 4.—For purposes
of chapters 3 and 4, each person that is a party to any contract
Contracts.
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PUBLIC LAW 111–147—MAR. 18, 2010 124 STAT. 117
or other arrangement that provides for the payment of a dividend
equivalent shall be treated as having control of such
payment.’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply to payments made on or after the date that is 180
days after the date of the enactment of this Act.
Subtitle B—Delay in Application of
Worldwide Allocation of Interest
SEC. 551. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF
INTEREST.
(a) IN GENERAL.—Paragraphs (5)(D) and (6) of section 864(f)
are each amended by striking ‘‘December 31, 2017’’ and inserting
‘‘December 31, 2020’’.
(b) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the date of the enactment of this Act.
Subtitle C—Budgetary Provisions
SEC. 561. TIME FOR PAYMENT OF CORPORATE ESTIMATED TAXES.
Notwithstanding section 6655 of the Internal Revenue Code
of 1986, in the case of a corporation with assets of not less than
$1,000,000,000 (determined as of the end of the preceding taxable
year)—
(1) the percentage under paragraph (1) of section 202(b)
of the Corporate Estimated Tax Shift Act of 2009 in effect
on the date of the enactment of this Act is increased by 23
percentage points,
(2) the amount of any required installment of corporate
estimated tax which is otherwise due in July, August, or September
of 2015 shall be 121.5 percent of such amount,
(3) the amount of any required installment of corporate
estimated tax which is otherwise due in July, August, or September
of 2019 shall be 106.5 percent of such amount, and
(4) the amount of the next required installment after an
installment referred to in paragraph (2) or (3) shall be appropriately
reduced to reflect the amount of the increase by reason
of such paragraph.
SEC. 562. PAYGO COMPLIANCE.
The budgetary effects of this Act, for purposes of complying
with the Statutory Pay-As-You-Go-Act of 2010, shall be determined
by reference to the latest statement titled ‘‘Budgetary Effects of
PAYGO Legislation’’ for this Act, jointly submitted for printing
in the Congressional Record by the Chairman of the House and
Senate Budget Committees, provided that such statement has been
26 USC 6655
note.
26 USC 864 note.
26 USC 864.
Applicability.
26 USC 871 note.
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124 STAT. 118 PUBLIC LAW 111–147—MAR. 18, 2010
LEGISLATIVE HISTORY—H.R. 2847:
HOUSE REPORTS: No. 111–149 (Comm. on Appropriations).
SENATE REPORTS: No. 111–34 (Comm. on Appropriations).
CONGRESSIONAL RECORD:
Vol. 155 (2009): June 16–18, considered and passed House.
Oct. 7, 8, 13, Nov. 5, considered and passed Senate, amended.
Dec. 16, House concurred in Senate amendment with an
amendment.
Vol. 156 (2010): Feb. 11, 22–24, Senate considered and concurred in House
amendment with an amendment.
Mar. 4, House concurred in Senate amendment with an
amendment.
Mar. 11, 15, 17, Senate considered and concurred in House
amendment.
DAILY COMPILATION OF PRESIDENTIAL DOCUMENTS (2010):
Mar. 18, Presidential remarks.
Æ
submitted prior to the vote on passage in the House acting first
on this conference report or amendments between the Houses.
Approved March 18, 2010.

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