PUBLIC LAW 104-188—AUG. 20, 1996 110 STAT. 1913 no tax shall be imposed by section 1491 of the Internal Revenue Code of 1986 by reason of such trust becoming a foreign trust or the assets of such trust being transferred to a foreign trust. SEC. 1905. INFORMATION REPORTING REGARDING FOREIGN GIFTS. (a) IN GENERAL.— Subpart A of part III of subchapter A of chapter 61 is amended by inserting after section 6039E the following new section: "SEC. 6039F. NOTICE OF I.ARGE GIFTS RECEIVED FROM FOREIGN PERSONS. "(a) IN GENERAL.—I f the value of the aggregate foreign gifts received by a United States person (other than an organization described in section 501(c) and exempt from tax under section 501(a)) during any taxable year exceeds $10,000, such United States person shall furnish (at such time and in such manner as the Secretary shall prescribe) such information as the Secretary may prescribe regarding each foreign gift received during such year. "(b) FOREIGN GIFT.— For purposes of this section, the term 'foreign gift' means any amount received from a person other than a United States person which the recipient treats as a gift or bequest. Such term shall not include any qualified transfer (within the meaning of section 2503(e)(2)) or any distribution properly disclosed in a return under section 6048(c). "(c) PENALTY FOR FAILURE TO FILE INFORMATION.— "(1) IN GENERAL. — If a United States person fails to furnish the information required by subsection (a) with respect to any foreign gift within the time prescribed therefor (including extensions)— "(A) the tax consequences of the receipt of such gift shall be determined by the Secretary, and "(B) such United States person shall pay (upon notice and demand by the Secretary and in the same manner as tax) an amount equal to 5 percent of the amount of such foreign gift for each month for which the failure continues (not to exceed 25 percent of such amount in the aggregate). "(2) REASONABLE CAUSE EXCEPTION.— Paragraph (1) shall not apply to any failure to report a foreign gift if the United States person shows that the failure is due to reasonable cause and not due to willful neglect. "(d) COST-OF-LIVING i\DJUSTMENT.— In the case of any taxable year beginning after December 31, 1996, the $10,000 amount under subsection (a) shall be increased by an amount equal to the product of such amount and the cost-of-living adjustment for such taxable year under section 1(f)(3), except that subparagraph (B) thereof shall be appHed by substituting '1995' for '1992'. "(e) REGULATIONS.—The Secretary shall prescribe such regulations as may be necessarj/^ or appropriate to carry out the purposes of this section.". (b) CLERICAL AMENDMENT. —The table of sections for such subpart is amended by inserting after the item relating to section 6039E the following new item: "Sec. 6039F. Notice of large gifts received from foreign persons.". (c) EFFECTIVE DATE.—The amendments made by this section 26 USC 6039F shall apply to amounts received after the date of the enactment note. of this Act in taxable years ending after such date.
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