CONTROLLED FOREIGN PARTNERSHIPS SUBJECT TO INFORMATION REPORTING COMPARABLE TO INFORMATION REPORTING FOR CONTROLLED FOREIGN CORPORATIONS.

SEC. 1142. CONTROLLED FOREIGN PARTNERSHIPS SUBJECT TO INFORMATION REPORTING COMPARABLE TO INFORMATION REPORTING FOR CONTROLLED FOREIGN CORPORATIONS. (a) In General.—So much of section 6038 (relating to information with respect to certain foreign corporations) as precedes paragraph (2) of subsection (a) is amended to read as follows: “SEC. 6038. INFORMATION REPORTING WITH RESPECT TO CERTAIN FOREIGN CORPORATIONS AND PARTNERSHIPS. “(a) Requirement.— “(1) In general.—Every United States person shall furnish, with respect to any foreign business entity which such person controls, such information as the Secretary may prescribe relating to— “(A) the name, the principal place of business, and the nature of business of such entity, and the country under whose laws such entity is incorporated (or organized in the case of a partnership); “(B) in the case of a foreign corporation, its post-1986 undistributed earnings (as defined in section 902(c)); “(C) a balance sheet for such entity listing assets, liabilities, and capital; “(D) transactions between such entity and— “(i) such person, “(ii) any corporation or partnership which such person controls, and “(iii) any United States person owning, at the time the transaction takes place— “(I) in the case of a foreign corporation, 10 percent or more of the value of any class of stock outstanding of such corporation, and “(II) in the case of a foreign partnership, at least a 10-percent interest in such partnership; and “(E)(i) in the case of a foreign corporation, a description of the various classes of stock outstanding, and a list showing the name and address of, and number of shares held by, each United States person who is a shareholder of record owning at any time during the annual accounting period 5 percent or more in value of any class of stock outstanding of such foreign corporation, and “(ii) information comparable to the information described in clause (i) in the case of a foreign partnership.111 STAT. 982 The Secretary may also require the furnishing of any other information which is similar or related in nature to that specified in the preceding sentence or which the Secretary determines to be appropriate to carry out the provisions of this title.”. (b) Definitions.— (1) In general.—Subsection (e) of section 6038 (relating to definitions) is amended— (A) by redesignating paragraphs (1) and (2) as paragraphs (2) and (4), respectively, (B) by inserting Before paragraph (2) (as so redesignated) the following new paragraph: “(1) Foreign business entity.—The term “foreign business entity’ means a foreign corporation and a foreign partnership.”, and (C) by inserting after paragraph (2) (as so redesignated) the following new paragraph: “(3) Partnership-related definitions.— “(A) Control.—A person is in control of a partnership if such person owns directly or indirectly more than a 50 percent interest in such partnership. “(B) 50-percent interest.—For purposes of subparagraph (A), a 50-percent interest in a partnership is— “(i) an interest equal to 50 percent of the capital interest, or 50 percent of the profits interest, in such partnership, or “(ii) to the extent provided in regulations, an interest to which 50 percent of the deductions or losses of such partnership are allocated. For purposes of the preceding sentence, rules similar to the rules of section 267(c) (other than paragraph (3)) shall apply. “(C) 10-percent interest.—A 10-percent interest in a partnership is an interest which would be described in subparagraph (B) if ‘10 percent’ were substituted for ‘50 percent’ each place it appears.”. (2) Clerical amendment.—The paragraph heading for paragraph (2) of section 6038(e) (as so redesignated) is amended by inserting “OF corporation” after “Control”. (c) Modification of Sanctions on Partnerships and Corporations for Failure To Furnish Information.— (1) In general.—Subsection (b) of section 6038 is amended— (A) by striking “$1,000” each place it appears and inserting “$10,000”, and (B) by striking “$24,000” in paragraph (2) and inserting “$50,000”. (d) Reporting by 10-Percent Partners.—Subsection (a) of section 6038 is amended by adding at the end the following new paragraph: “(5) Information required from 10-percent partner of controlled foreign partnership.—In the case of a foreign partnership which is controlled by United States persons holding at least 10-percent interests (but not by any one United States person), the Secretary may require each United States person who holds a 10-percent interest in such partnership to furnish information relating to such partnership, including 111 STAT. 983information relating to such partner’s ownership interests in the partnership and allocations to such partner of partnership items.”. (e) Technical Amendments.— (1) The following provisions of section 6038 are each amended by striking “foreign corporation” each place it appears and inserting “foreign business entity”: (A) Paragraphs (2) and (3) of subsection (a). (B) Subsection (b). (C) Subsection (c) other than paragraph (1)(B) thereof. (D) Subsection (d). (E) Subsection (e)(4) (as redesignated by subsection (b)). (2) Subparagraph (B) of section 6038(c)(1) is amended by inserting “in the case of a foreign business entity which is a foreign corporation,” after “(B)”. (3) Paragraph (8) of section 318(b) is amended by striking “6038(d)(1)” and inserting “6038(d)(2)”. (4) Paragraph (4) of section 901(k) is amended by striking “foreign corporation” and inserting “foreign corporation or partnership”. (5) The table of sections for subpart A of part III of subchapter A of chapter 61 is amended by striking the item relating to section 6038 and inserting the following new item: “Sec. 6038. Information reporting with respect to certain foreign corporations and partnerships.”. (f) Effective Date.—The amendments made by this section shall apply to annual accounting periods beginning after the date of the enactment of this Act.