PENALTIES FOR UNDERPAYMENTS ATTRIBUTABLE TO UNDISCLOSED FOREIGN FINANCIAL ASSETS.

SEC. 512. PENALTIES FOR UNDERPAYMENTS ATTRIBUTABLE TO UNDISCLOSED FOREIGN FINANCIAL ASSETS.(a) In General.—Section 6662, as amended by this Act, is amended—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.