US (United States) Code. Title 26. Subtitle F: Procedure and Administration. Chapter 77: Miscellaneous provisions

Codificación normativa de EEUU (Estados Unidos) Legislación Federal estadounidense # Internal revenue code

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-CITE-

26 USC CHAPTER 77 - MISCELLANEOUS PROVISIONS 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-MISC1-

Sec.

7501. Liability for taxes withheld or collected.

7502. Timely mailing treated as timely filing and paying.

7503. Time for performance of acts where last day falls on

Saturday, Sunday, or legal holiday.

7504. Fractional parts of a dollar.

7505. Sale of personal property acquired by the United

States.

7506. Administration of real estate acquired by the United

States.

7507. Exemption of insolvent banks from tax.

7508. Time for performing certain acts postponed by reason

of service in combat zone.

7508A. Authority to postpone certain deadlines by reason of

Presidentially declared disaster or terroristic or

military actions.

7509. Expenditures incurred by the United States Postal

Service.

7510. Exemption from tax of domestic goods purchased for the

United States.

[7511. Repealed.]

7512. Separate accounting for certain collected taxes, etc.

7513. Reproduction of returns and other documents.

7514. Authority to prescribe or modify seals.

7515. Special statistical studies and compilations and other

services on request.(!1)

7516. Supplying training and training aids on request.

7517. Furnishing on request of statement explaining estate

or gift valuation.

7518. Tax incentives relating to merchant marine capital

construction funds.

7519. Required payments for entities electing not to have

required taxable year.

7520. Valuation tables.

7521. Procedures involving taxpayer interviews.

7522. Content of tax due, deficiency, and other notices.

7523. Graphic presentation of major categories of Federal

outlays and income.

7524. Annual notice of tax delinquency.

7525. Confidentiality privileges relating to taxpayer

communications.

7526. Low-income taxpayer clinics.

7527. Advance payment of credit for health insurance costs

of eligible individuals.

AMENDMENTS

2002 - Pub. L. 107-210, div. A, title II, Sec. 202(d)(1), Aug. 6,

2002, 116 Stat. 963, added item 7527.

Pub. L. 107-134, title I, Sec. 112(e)(1), Jan. 23, 2002, 115

Stat. 2435, substituted "Authority to postpone certain deadlines by

reason of Presidentially declared disaster or terroristic or

military actions" for "Authority to postpone certain tax-related

deadlines by reason of presidentially declared disaster" in item

7508A.

1998 - Pub. L. 105-206, title III, Secs. 3411(b), 3601(b), July

22, 1998, 112 Stat. 751, 776, added items 7525 and 7526.

1997 - Pub. L. 105-34, title IX, Sec. 911(b), Aug. 5, 1997, 111

Stat. 878, added item 7508A.

1996 - Pub. L. 104-168, title XII, Sec. 1204(b), July 30, 1996,

110 Stat. 1471, added item 7524.

1990 - Pub. L. 101-508, title XI, Secs. 11622(b), 11704(a)(31),

Nov. 5, 1990, 104 Stat. 1388-505, 1388-519, substituted "7522.

Content of tax due, deficiency, and other notices." for "7521.

Content of tax due, deficiency, and other notices." and added item

7523.

1989 - Pub. L. 101-239, title VII, Sec. 7816(u)(2), Dec. 19,

1989, 103 Stat. 2423, redesignated item 7520, relating to

procedures involving taxpayer interviews, as 7521.

1988 - Pub. L. 100-647, title VI, Sec. 6233(b), Nov. 10, 1988,

102 Stat. 3735, added item 7521.

Pub. L. 100-647, title VI, Sec. 6228(c), Nov. 10, 1988, 102 Stat.

3732, added item 7520 relating to procedures involving taxpayer

interviews.

Pub. L. 100-647, title V, Sec. 5031(b), Nov. 10, 1988, 102 Stat.

3669, added item 7520 relating to valuation tables.

1987 - Pub. L. 100-203, title X, Sec. 10206(b)(2), Dec. 22, 1987,

101 Stat. 1330-401, added item 7519.

1986 - Pub. L. 99-514, title II, Sec. 261(f), Oct. 22, 1986, 100

Stat. 2216, added item 7518.

1976 - Pub. L. 94-455, title XIX, Sec. 1906(b)(11), (12), Oct. 4,

1976, 90 Stat. 1834, substituted "Time for performing certain acts

postponed by reason of service in combat zone" for "Time for

performing certain acts postponed by reason of war" in item 7508,

and "Expenditures incurred by the United States Postal Service" for

"Expenditures incurred by the Post Office Department" in item 7509.

Pub. L. 94-455, title XX, Sec. 2008(a)(2)(C), Oct. 4, 1976, 90

Stat. 1891, added item 7517 relating to statement explaining estate

or gift valuation.

1966 - Pub. L. 89-719, title I, Sec. 111(c)(2), Nov. 2, 1966, 80

Stat. 1145, substituted "acquired" for "purchased" in item 7505.

Pub. L. 89-713, Sec. 5(b), Nov. 2, 1966, 80 Stat. 1111, inserted

"and paying" in item 7502.

1962 - Pub. L. 87-870, Sec. 3(a)(2), Oct. 23, 1962, 76 Stat.

1161, added items 7515 and 7516.

Pub. L. 87-456, title III, Sec. 302(d), May 24, 1962, 76 Stat.

77, struck out item 7511 "Exemption of consular officers and

employees of foreign states from payment of internal revenue taxes

on imported articles".

1958 - Pub. L. 85-866, title I, Secs. 90(b), 91(b), Sept. 2,

1958, 72 Stat. 1666, 1667, added items 7513 and 7514.

Pub. L. 85-321, Sec. 3(a), Feb. 11, 1958, 72 Stat. 6, added item

7512.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 7801, 7851 of this title.

-FOOTNOTE-

(!1) Section repealed by Pub. L. 94-455 without corresponding

amendment of analysis.

-End-

-CITE-

26 USC Sec. 7501 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7501. Liability for taxes withheld or collected

-STATUTE-

(a) General rule

Whenever any person is required to collect or withhold any

internal revenue tax from any other person and to pay over such tax

to the United States, the amount of tax so collected or withheld

shall be held to be a special fund in trust for the United States.

The amount of such fund shall be assessed, collected, and paid in

the same manner and subject to the same provisions and limitations

(including penalties) as are applicable with respect to the taxes

from which such fund arose.

(b) Penalties

For penalties applicable to violations of this section, see

sections 6672 and 7202.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 895.)

-End-

-CITE-

26 USC Sec. 7502 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7502. Timely mailing treated as timely filing and paying

-STATUTE-

(a) General rule

(1) Date of delivery

If any return, claim, statement, or other document required to

be filed, or any payment required to be made, within a prescribed

period or on or before a prescribed date under authority of any

provision of the internal revenue laws is, after such period or

such date, delivered by United States mail to the agency,

officer, or office with which such return, claim, statement, or

other document is required to be filed, or to which such payment

is required to be made, the date of the United States postmark

stamped on the cover in which such return, claim, statement, or

other document, or payment, is mailed shall be deemed to be the

date of delivery or the date of payment, as the case may be.

(2) Mailing requirements

This subsection shall apply only if -

(A) the postmark date falls within the prescribed period or

on or before the prescribed date -

(i) for the filing (including any extension granted for

such filing) of the return, claim, statement, or other

document, or

(ii) for making the payment (including any extension

granted for making such payment), and

(B) the return, claim, statement, or other document, or

payment was, within the time prescribed in subparagraph (A),

deposited in the mail in the United States in an envelope or

other appropriate wrapper, postage prepaid, properly addressed

to the agency, officer, or office with which the return, claim,

statement, or other document is required to be filed, or to

which such payment is required to be made.

(b) Postmarks

This section shall apply in the case of postmarks not made by the

United States Postal Service only if and to the extent provided by

regulations prescribed by the Secretary.

(c) Registered and certified mailing; electronic filing

(1) Registered mail

For purposes of this section, if any return, claim, statement,

or other document, or payment, is sent by United States

registered mail -

(A) such registration shall be prima facie evidence that the

return, claim, statement, or other document was delivered to

the agency, officer, or office to which addressed; and

(B) the date of registration shall be deemed the postmark

date.

(2) Certified mail; electronic filing

The Secretary is authorized to provide by regulations the

extent to which the provisions of paragraph (1) with respect to

prima facie evidence of delivery and the postmark date shall

apply to certified mail and electronic filing.

(d) Exceptions

This section shall not apply with respect to -

(1) the filing of a document in, or the making of a payment to,

any court other than the Tax Court,

(2) currency or other medium of payment unless actually

received and accounted for, or

(3) returns, claims, statements, or other documents, or

payments, which are required under any provision of the internal

revenue laws or the regulations thereunder to be delivered by any

method other than by mailing.

(e) Mailing of deposits

(1) Date of deposit

If any deposit required to be made (pursuant to regulations

prescribed by the Secretary under section 6302(c)) on or before a

prescribed date is, after such date, delivered by the United

States mail to the bank, trust company, domestic building and

loan association, or credit union authorized to receive such

deposit, such deposit shall be deemed received by such bank,

trust company, domestic building and loan association, or credit

union on the date the deposit was mailed.

(2) Mailing requirements

Paragraph (1) shall apply only if the person required to make

the deposit establishes that -

(A) the date of mailing falls on or before the second day

before the prescribed date for making the deposit (including

any extension of time granted for making such deposit), and

(B) the deposit was, on or before such second day, mailed in

the United States in an envelope or other appropriate wrapper,

postage prepaid, properly addressed to the bank, trust company,

domestic building and loan association, or credit union

authorized to receive such deposit.

In applying subsection (c) for purposes of this subsection, the

term "payment" includes "deposit", and the reference to the

postmark date refers to the date of mailing.

(3) No application to certain deposits

Paragraph (1) shall not apply with respect to any deposit of

$20,000 or more by any person who is required to deposit any tax

more than once a month.

(f) Treatment of private delivery services

(1) In general

Any reference in this section to the United States mail shall

be treated as including a reference to any designated delivery

service, and any reference in this section to a postmark by the

United States Postal Service shall be treated as including a

reference to any date recorded or marked as described in

paragraph (2)(C) by any designated delivery service.

(2) Designated delivery service

For purposes of this subsection, the term "designated delivery

service" means any delivery service provided by a trade or

business if such service is designated by the Secretary for

purposes of this section. The Secretary may designate a delivery

service under the preceding sentence only if the Secretary

determines that such service -

(A) is available to the general public,

(B) is at least as timely and reliable on a regular basis as

the United States mail,

(C) records electronically to its data base, kept in the

regular course of its business, or marks on the cover in which

any item referred to in this section is to be delivered, the

date on which such item was given to such trade or business for

delivery, and

(D) meets such other criteria as the Secretary may prescribe.

(3) Equivalents of registered and certified mail

The Secretary may provide a rule similar to the rule of

paragraph (1) with respect to any service provided by a

designated delivery service which is substantially equivalent to

United States registered or certified mail.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 895; Pub. L. 85-866, title I,

Sec. 89(a), Sept. 2, 1958, 72 Stat. 1665; Pub. L. 89-713, Sec.

5(a), Nov. 2, 1966, 80 Stat. 1110; Pub. L. 90-364, title I, Sec.

106(a), June 28, 1968, 82 Stat. 266; Pub. L. 94-455, title XIX,

Secs. 1906(a)(49), (b)(13)(A), Oct. 4, 1976, 90 Stat. 1831, 1834;

Pub. L. 95-147, Sec. 3(b), Oct. 28, 1977, 91 Stat. 1228; Pub. L.

98-369, div. A, title I, Sec. 157(a), July 18, 1984, 98 Stat. 695;

Pub. L. 99-514, title XVIII, Sec. 1811(e), Oct. 22, 1986, 100 Stat.

2833; Pub. L. 104-168, title XII, Sec. 1210, July 30, 1996, 110

Stat. 1474; Pub. L. 105-206, title II, Sec. 2003(b), July 22, 1998,

112 Stat. 725.)

-MISC1-

AMENDMENTS

1998 - Subsec. (c). Pub. L. 105-206 inserted "; electronic

filing" after "mailing" in heading and amended text of subsec. (c)

generally. Prior to amendment, text read as follows:

"(1) Registered mail. - For purposes of this section, if any such

return, claim, statement, or other document, or payment, is sent by

United States registered mail -

"(A) such registration shall be prima facie evidence that the

return, claim, statement, or other document was delivered to the

agency, officer, or office to which addressed, and

"(B) the date of registration shall be deemed the postmark

date.

"(2) Certified mail. - The Secretary is authorized to provide by

regulations the extent to which the provisions of paragraph (1) of

this subsection with respect to prima facie evidence of delivery

and the postmark date shall apply to certified mail."

1996 - Subsec. (f). Pub. L. 104-168 added subsec. (f).

1986 - Subsec. (e)(3). Pub. L. 99-514 substituted "any tax" for

"the tax".

1984 - Subsec. (e)(3). Pub. L. 98-369 added par. (3).

1977 - Subsec. (e). Pub. L. 95-147 substituted ", trust company,

domestic building and loan association, or credit union" for "or

trust company" in three places.

1976 - Subsec. (b). Pub. L. 94-455, Sec. 1906(a)(49), (b)(13)(A),

substituted "United States Postal Service" for "United States Post

Office" after "made by the", and struck out "or his delegate" after

"Secretary".

Subsecs. (c)(2), (e)(1). Pub. L. 94-455, Sec. 1906(b)(13)(A),

struck out "or his delegate" after "Secretary".

1968 - Subsec. (e). Pub. L. 90-364 added subsec. (e).

1966 - Subsec. (a). Pub. L. 89-713 inserted filing of tax returns

and the payments of tax to the list of operations to which the

timely-mailing-timely-filing provisions of the subsec. apply and

altered the subsec. structurally by dividing its provisions into

pars. (1) and (2).

Subsec. (b). Pub. L. 89-713 substituted "Postmarks" for "Stamp

machine" in heading.

Subsec. (c). Pub. L. 89-713 inserted returns and payments to the

list of operations to which the timely-mailing-timely-filing

provisions apply and altered par. (1) structurally by dividing its

provisions into subpars. (A) and (B).

Subsec. (d). Pub. L. 89-713 designated existing provisions as

par. (1) and added pars. (2) and (3).

1958 - Subsec. (c). Pub. L. 85-866 designated existing provisions

as par. (1) and added par. (2).

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 effective, except as otherwise

provided, as if included in the provisions of the Tax Reform Act of

1984, Pub. L. 98-369, div. A, to which such amendment relates, see

section 1881 of Pub. L. 99-514, set out as a note under section 48

of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Section 157(b) of Pub. L. 98-369 provided that: "The amendment

made by this section [amending this section] shall apply to

deposits required to be made after July 31, 1984."

EFFECTIVE DATE OF 1977 AMENDMENT

Amendment by Pub. L. 95-147 applicable to amounts deposited after

Oct. 28, 1977, see section 3(c) of Pub. L. 95-147, set out as a

note under section 6302 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 effective on first day of first month

which begins more than 90 days after Oct. 4, 1976, see section

1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013

of this title.

EFFECTIVE DATE OF 1968 AMENDMENT

Section 106(b) of Pub. L. 90-364 provided that: "The amendment

made by subsec. (a) [amending this section] shall apply only as to

mailing occurring after the date of the enactment of this Act [June

28, 1968]."

EFFECTIVE DATE OF 1966 AMENDMENT

Section 5(c) of Pub. L. 89-713 provided that: "The amendments

made by this section [amending this section] shall apply only if

the mailing occurs after the date of the enactment of this Act

[Nov. 2, 1966]."

EFFECTIVE DATE OF 1958 AMENDMENT

Section 89(d) of Pub. L. 85-866 provided that: "This section

[amending this section and sections 167, 6164, 6212, 6532, and 7455

of this title] shall apply only if the mailing occurs after the

date of the enactment of this Act [Sept. 2, 1958]."

PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989

For provisions directing that if any amendments made by subtitle

A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or

title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an

amendment to any plan, such plan amendment shall not be required to

be made before the first plan year beginning on or after Jan. 1,

1989, see section 1140 of Pub. L. 99-514, as amended, set out as a

note under section 401 of this title.

PROVISIONS OF INTERNAL REVENUE CODE OF 1939

Section 89(c) of Pub. L. 85-866 provided that: "In applying any

provision of the Internal Revenue Code of 1939 which requires, or

provides for, the use of registered mail, the reference to

registered mail shall be treated as including a reference to

certified mail."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7851 of this title.

-End-

-CITE-

26 USC Sec. 7503 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7503. Time for performance of acts where last day falls on

Saturday, Sunday, or legal holiday

-STATUTE-

When the last day prescribed under authority of the internal

revenue laws for performing any act falls on Saturday, Sunday, or a

legal holiday, the performance of such act shall be considered

timely if it is performed on the next succeeding day which is not a

Saturday, Sunday, or a legal holiday. For purposes of this section,

the last day for the performance of any act shall be determined by

including any authorized extension of time; the term "legal

holiday" means a legal holiday in the District of Columbia; and in

the case of any return, statement, or other document required to be

filed, or any other act required under authority of the internal

revenue laws to be performed, at any office of the Secretary or at

any other office of the United States or any agency thereof,

located outside the District of Columbia but within an internal

revenue district, the term "legal holiday" also means a Statewide

legal holiday in the State where such office is located.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 896; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

APPLICABILITY OF THIS SECTION FOR PURPOSES OF SECTION 10222(B) OF

PUB. L. 100-203

Pub. L. 100-647, title VI, Sec. 6278, Nov. 10, 1988, 102 Stat.

3754, provided that: "Section 7503 of the 1986 Code shall apply for

purposes of determining whether any disposition meets the

requirements of section 10222(b)(2)(B) of the Revenue Act of 1987

[Pub. L. 100-203, set out as a note under section 301 of this

title]. If any disposition meets the requirements of such section

by reason of the preceding sentence, for all purposes of the 1986

Code, such disposition shall be deemed to have occurred on December

31, 1988."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 5061, 5703, 7851 of this

title.

-End-

-CITE-

26 USC Sec. 7504 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7504. Fractional parts of a dollar

-STATUTE-

The Secretary may by regulations provide that in the allowance of

any amount as a credit or refund, or in the collection of any

amount as a deficiency or underpayment, of any tax imposed by this

title, a fractional part of a dollar shall be disregarded, unless

it amounts to 50 cents or more, in which case it shall be increased

to 1 dollar.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 896; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 6420 of this title.

-End-

-CITE-

26 USC Sec. 7505 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7505. Sale of personal property acquired by the United States

-STATUTE-

(a) Sale

Any personal property acquired by the United States in payment of

or as security for debts arising under the internal revenue laws

may be sold by the Secretary in accordance with such regulations as

may be prescribed by the Secretary.

(b) Accounting

In case of the resale of such property, the proceeds of the sale

shall be paid into the Treasury as internal revenue collections,

and there shall be rendered a distinct account of all charges

incurred in such sales.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 896; Pub. L. 89-719, title I,

Sec. 111(a), (c)(1), Nov. 2, 1966, 80 Stat. 1145; Pub. L. 94-455,

title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Subsec. (a). Pub. L. 94-455 struck out "or his delegate"

after "Secretary" wherever appearing.

1966 - Pub. L. 89-719 substituted "acquired by the United States

in payment of or as security for debts arising under the internal

revenue laws" for "purchased by the United States under the

authority of section 6335(e) (relating to purchase for the account

of the United States of property sold under levy)" in subsec. (a),

and substituted "acquired" for "purchased" in section catchline.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

-End-

-CITE-

26 USC Sec. 7506 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7506. Administration of real estate acquired by the United

States

-STATUTE-

(a) Person charged with

The Secretary shall have charge of all real estate which is or

shall become the property of the United States by judgment of

forfeiture under the internal revenue laws, or which has been or

shall be assigned, set off, or conveyed by purchase or otherwise to

the United States in payment of debts or penalties arising under

the laws relating to internal revenue, or which has been or shall

be vested in the United States by mortgage or other security for

the payment of such debts, or which has been redeemed by the United

States, and of all trusts created for the use of the United States

in payment of such debts due them.

(b) Sale

The Secretary, may, at public sale, and upon not less than 20

days' notice, sell and dispose of any real estate owned or held by

the United States as aforesaid.

(c) Lease

Until such sale, the Secretary may lease such real estate owned

as aforesaid on such terms and for such period as the Secretary

shall deem proper.

(d) Release to debtor

In cases where real estate has or may become the property of the

United States by conveyance or otherwise, in payment of or as

security for a debt arising under the laws relating to internal

revenue, and such debt shall have been paid, together with the

interest thereon, at the rate of 1 percent per month, to the United

States, within 2 years from the date of the acquisition of such

real estate, it shall be lawful for the Secretary to release by

deed or otherwise convey such real estate to the debtor from whom

it was taken, or to his heirs or other legal representatives.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 896; Pub. L. 89-719, title I,

Sec. 111(b), Nov. 2, 1966, 80 Stat. 1145; Pub. L. 94-455, title

XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Subsecs. (a) to (d). Pub. L. 94-455 struck out "or his

delegate" after "Secretary" wherever appearing.

1966 - Subsec. (a). Pub. L. 89-719 inserted reference to real

estate which has been redeemed by the United States.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7809 of this title.

-End-

-CITE-

26 USC Sec. 7507 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7507. Exemption of insolvent banks from tax

-STATUTE-

(a) Assets in general

Whenever and after any bank or trust company, a substantial

portion of the business of which consists of receiving deposits and

making loans and discounts, has ceased to do business by reason of

insolvency or bankruptcy, no tax shall be assessed or collected, or

paid into the Treasury of the United States, on account of such

bank or trust company, which shall diminish the assets thereof

necessary for the full payment of all its depositors; and such tax

shall be abated from such national banks as are found by the

Comptroller of the Currency to be insolvent; and the Secretary,

when the facts shall appear to him, is authorized to remit so much

of the said tax against any such insolvent banks and trust

companies organized under State law as shall be found to affect the

claims of their depositors.

(b) Segregated assets; earnings

Whenever any bank or trust company, a substantial portion of the

business of which consists of receiving deposits and making loans

and discounts, has been released or discharged from its liability

to its depositors for any part of their claims against it, and such

depositors have accepted, in lieu thereof, a lien upon subsequent

earnings of such bank or trust company, or claims against assets

segregated by such bank or trust company or against assets

transferred from it to an individual or corporate trustee or agent,

no tax shall be assessed or collected, or paid into the Treasury of

the United States, on account of such bank or trust company, such

individual or corporate trustee or such agent, which shall diminish

the assets thereof which are available for the payment of such

depositor claims and which are necessary for the full payment

thereof. The term "agent", as used in this subsection, shall be

deemed to include a corporation acting as a liquidating agent.

(c) Refund; reassessment; statutes of limitation

(1) Any such tax collected shall be deemed to be erroneously

collected, and shall be refunded subject to all provisions and

limitations of law, so far as applicable, relating to the refunding

of taxes.

(2) Any tax, the assessment, collection, or payment of which is

barred under subsection (a), or any such tax which has been abated

or remitted shall be assessed or reassessed whenever it shall

appear that payment of the tax will not diminish the assets as

aforesaid.

(3) Any tax, the assessment, collection, or payment of which is

barred under subsection (b), or any such tax which has been

refunded shall be assessed or reassessed after full payment of such

claims of depositors to the extent of the remaining assets

segregated or transferred as described in subsection (b).

(4) The running of the statute of limitations on the making of

assessment and collection shall be suspended during, and for 90

days beyond, the period for which, pursuant to this section,

assessment or collection may not be made, and a tax may be

reassessed as provided in paragraphs (2) and (3) of this subsection

and collected, during the time within which, had there been no

abatement, collection might have been made.

(d) Exception of employment taxes

This section shall not apply to any tax imposed by chapter 21 or

chapter 23.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 897; Pub. L. 94-455, title XIX,

Sec. 1906(a)(50), (b)(13)(A), Oct. 4, 1976, 90 Stat. 1831, 1834.)

-MISC1-

AMENDMENTS

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck

out "or his delegate" after "Secretary".

Subsec. (c). Pub. L. 94-455, Sec. 1906(a)(50), struck out "after

May 28, 1938" in par. (2) after "or remitted" and in par. (3) after

"been refunded".

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 effective on first day of first month

which begins more than 90 days after Oct. 4, 1976, see section

1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013

of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6207, 6504 of this title.

-End-

-CITE-

26 USC Sec. 7508 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7508. Time for performing certain acts postponed by reason of

service in combat zone

-STATUTE-

(a) Time to be disregarded

In the case of an individual serving in the Armed Forces of the

United States, or serving in support of such Armed Forces, in an

area designated by the President of the United States by Executive

order as a "combat zone" for purposes of section 112, at any time

during the period designated by the President by Executive order as

the period of combatant activities in such zone for purposes of

such section, or hospitalized as a result of injury received while

serving in such an area during such time, the period of service in

such area, plus the period of continuous qualified hospitalization

attributable to such injury, and the next 180 days thereafter,

shall be disregarded in determining, under the internal revenue

laws, in respect of any tax liability (including any interest,

penalty, additional amount, or addition to the tax) of such

individual -

(1) Whether any of the following acts was performed within the

time prescribed therefor:

(A) Filing any return of income, estate, or gift tax (except

income tax withheld at source and income tax imposed by

subtitle C or any law superseded thereby);

(B) Payment of any income, estate, or gift tax (except income

tax withheld at source and income tax imposed by subtitle C or

any law superseded thereby) or any installment thereof or of

any other liability to the United States in respect thereof;

(C) Filing a petition with the Tax Court for redetermination

of a deficiency, or for review of a decision rendered by the

Tax Court;

(D) Allowance of a credit or refund of any tax;

(E) Filing a claim for credit or refund of any tax;

(F) Bringing suit upon any such claim for credit or refund;

(G) Assessment of any tax;

(H) Giving or making any notice or demand for the payment of

any tax, or with respect to any liability to the United States

in respect of any tax;

(I) Collection, by the Secretary, by levy or otherwise, of

the amount of any liability in respect of any tax;

(J) Bringing suit by the United States, or any officer on its

behalf, in respect of any liability in respect of any tax; and

(K) Any other act required or permitted under the internal

revenue laws specified by the Secretary;

(2) The amount of any credit or refund.

(b) Special rule for overpayments

(1) In general

Subsection (a) shall not apply for purposes of determining the

amount of interest on any overpayment of tax.

(2) Special rules

If an individual is entitled to the benefits of subsection (a)

with respect to any return and such return is timely filed

(determined after the application of such subsection),

subsections (b)(3) and (e) of section 6611 shall not apply.

(c) Application to spouse

The provisions of this section shall apply to the spouse of any

individual entitled to the benefits of subsection (a). Except in

the case of the combat zone designated for purposes of the Vietnam

conflict, the preceding sentence shall not cause this section to

apply for any spouse for any taxable year beginning more than 2

years after the date designated under section 112 as the date of

termination of combatant activities in a combat zone.

(d) Missing status

The period of service in the area referred to in subsection (a)

shall include the period during which an individual entitled to

benefits under subsection (a) is in a missing status, within the

meaning of section 6013(f)(3).

(e) Exceptions

(1) Tax in jeopardy; cases under title 11 of the United States

Code and receiverships; and transferred assets

Notwithstanding the provisions of subsection (a), any action or

proceeding authorized by section 6851 (regardless of the taxable

year for which the tax arose), chapter 70, or 71, as well as any

other action or proceeding authorized by law in connection

therewith, may be taken, begun, or prosecuted. In any other case

in which the Secretary determines that collection of the amount

of any assessment would be jeopardized by delay, the provisions

of subsection (a) shall not operate to stay collection of such

amount by levy or otherwise as authorized by law. There shall be

excluded from any amount assessed or collected pursuant to this

paragraph the amount of interest, penalty, additional amount, and

addition to the tax, if any, in respect of the period disregarded

under subsection (a). In any case to which this paragraph

relates, if the Secretary is required to give any notice to or

make any demand upon any person, such requirement shall be deemed

to be satisfied if the notice or demand is prepared and signed,

in any case in which the address of such person last known to the

Secretary is in an area for which United States post offices

under instructions of the Postmaster General are not, by reason

of the combatant activities, accepting mail for delivery at the

time the notice or demand is signed. In such case the notice or

demand shall be deemed to have been given or made upon the date

it is signed.

(2) Action taken before ascertainment of right to benefits

The assessment or collection of any internal revenue tax or of

any liability to the United States in respect of any internal

revenue tax, or any action or proceeding by or on behalf of the

United States in connection therewith, may be made, taken, begun,

or prosecuted in accordance with law, without regard to the

provisions of subsection (a), unless prior to such assessment

collection, action, or proceeding it is ascertained that the

person concerned is entitled to the benefits of subsection (a).

(f) Treatment of individuals performing Desert Shield services

(1) In general

Any individual who performed Desert Shield services (and the

spouse of such individual) shall be entitled to the benefits of

this section in the same manner as if such services were services

referred to in subsection (a).

(2) Desert Shield services

For purposes of this subsection, the term "Desert Shield

services" means any services in the Armed Forces of the United

States or in support of such Armed Forces if -

(A) such services are performed in the area designated by the

President pursuant to this subparagraph as the "Persian Gulf

Desert Shield area", and

(B) such services are performed during the period beginning

on August 2, 1990, and ending on the date on which any portion

of the area referred to in subparagraph (A) is designated by

the President as a combat zone pursuant to section 112.

(g) Qualified hospitalization

For purposes of subsection (a), the term "qualified

hospitalization" means -

(1) any hospitalization outside the United States, and

(2) any hospitalization inside the United States, except that

not more than 5 years of hospitalization may be taken into

account under this paragraph.

Paragraph (2) shall not apply for purposes of applying this section

with respect to the spouse of an individual entitled to the

benefits of subsection (a).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 898; Pub. L. 93-597, Sec. 5(a),

Jan. 2, 1975, 88 Stat. 1952; Pub. L. 94-455, title XIX, Sec.

1906(a)(51), (b)(13)(A), Oct. 4, 1976, 90 Stat. 1831, 1834; Pub. L.

94-569, Sec. 3(e), Oct. 20, 1976, 90 Stat. 2700; Pub. L. 96-589,

Sec. 6(i)(14), Dec. 24, 1980, 94 Stat. 3411; Pub. L. 97-448, title

III, Sec. 307(d), Jan. 12, 1983, 96 Stat. 2407; Pub. L. 99-514,

title XVII, Sec. 1708(a)(4), Oct. 22, 1986, 100 Stat. 2782; Pub. L.

102-2, Sec. 1(a)-(c), Jan. 30, 1991, 105 Stat. 5; Pub. L. 107-134,

title I, Sec. 112(b), Jan. 23, 2002, 115 Stat. 2434.)

-MISC1-

AMENDMENTS

2002 - Subsec. (a)(1)(K). Pub. L. 107-134 struck out "in

regulations prescribed under this section" before "by the

Secretary".

1991 - Subsec. (a). Pub. L. 102-2, Sec. 1(c)(1), in introductory

provisions, struck out "outside the United States" before "as a

result of injury" and substituted "the period of continuous

qualified hospitalization" for "the period of continuous

hospitalization outside the United States".

Subsec. (a)(2). Pub. L. 102-2, Sec. 1(b)(2), struck out

"(including interest)" after "refund".

Subsecs. (b) to (e). Pub. L. 102-2, Sec. 1(b)(1), added subsec.

(b) and redesignated former subsecs. (b) to (d) as (c) to (e),

respectively.

Subsecs. (f), (g). Pub. L. 102-2, Sec. 1(a), (c)(2), added

subsecs. (f) and (g).

1986 - Subsec. (b). Pub. L. 99-514 amended last sentence

generally. Prior to amendment, last sentence read as follows: "The

preceding sentence shall not cause this section to apply to any

spouse for any taxable year beginning -

"(1) after December 31, 1982, in the case of service in the

combat zone designated for purposes of the Vietnam conflict, or

"(2) more than 2 years after the date designated under section

112 as the date of termination of combatant activities in that

zone, in the case of any combat zone other than that referred to

in paragraph (1)."

1983 - Subsec. (b)(1). Pub. L. 97-448 substituted "December 31,

1982" for "January 2, 1978".

1980 - Subsec. (d). Pub. L. 96-589 substituted "cases under title

11 of the United States Code and receiverships" for "bankruptcy and

receiverships" in par. (1) heading.

1976 - Pub. L. 94-455, Sec. 1906(a)(51)(A), substituted "by

reason of service in combat zone" for "by reason of war" in section

catchline.

Subsec. (a). Pub. L. 94-455, Sec. 1906(a)(51)(B), (b)(13)(A),

substituted "United States" for "States of the Union and the

District of Columbia" in two places after "hospitalized outside

the" and "hospitalization outside the", and struck out "or his

delegate" after "Secretary".

Subsec. (b). Pub. L. 94-569 substituted "taxable year beginning"

for "taxable year beginning more than 2 years after" in provisions

preceding par. (1), substituted "after January 2, 1978" for "the

date of the enactment of this subsection" in par. (1), and

substituted "more than 2 years after the date designated" for "the

date designated" in par. (2).

Subsec. (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out "or

his delegate" after "Secretary" wherever appearing.

1975 - Subsecs. (b) to (d). Pub. L. 93-597 added subsecs. (b) and

(c) and redesignated former subsec. (b) as (d).

EFFECTIVE DATE OF 2002 AMENDMENT

Amendment by Pub. L. 107-134 applicable to disasters and

terroristic or military actions occurring on or after Sept. 11,

2001, with respect to any action of the Secretary of the Treasury,

the Secretary of Labor, or the Pension Benefit Guaranty Corporation

occurring on or after Jan. 23, 2002, see section 112(f) of Pub. L.

107-134, set out as a note under section 6081 of this title.

EFFECTIVE DATE OF 1991 AMENDMENT

Section 1(d) of Pub. L. 102-2 provided that: "The amendments made

by this section [amending this section] shall take effect on August

2, 1990."

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 applicable to taxable years beginning

after Dec. 31, 1982, see section 1708(b) of Pub. L. 99-514, set out

as a note under section 2 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-589 effective Oct. 1, 1979, but not

applicable to proceedings under Title 11, Bankruptcy, commenced

before Oct. 1, 1979, see section 7(e) of Pub. L. 96-589, set out as

a note under section 108 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 effective on first day of first month

which begins more than 90 days after Oct. 4, 1976, see section

1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013

of this title.

EFFECTIVE DATE OF 1975 AMENDMENT

Section 5(b) of Pub. L. 93-597 provided that: "The amendments

made by subsection (a) [amending this section] shall apply to

taxable years ending on or after February 28, 1961."

-TRANS-

TRANSFER OF FUNCTIONS

Office of Postmaster General of Post Office Department abolished

and all functions, powers, and duties of Postmaster General

transferred to United States Postal Service by Pub. L. 91-375, Sec.

4(a), Aug. 12, 1970, 84 Stat. 773, set out as a note under section

201 of Title 39, Postal Service.

-EXEC-

EX. ORD. NO. 12750. DESIGNATION OF ARABIAN PENINSULA AREAS,

AIRSPACE, AND ADJACENT WATERS AS PERSIAN GULF DESERT SHIELD AREA

Ex. Ord. No. 12750, Feb. 14, 1991, 56 F.R. 6785, provided:

By the authority vested in me as President by the Constitution

and the laws of the United States of America, including section

7508 of the Internal Revenue Code of 1986 (26 U.S.C. 7508), I

hereby designate, for purposes of that section, the following

locations, including the air space above such locations, as the

Persian Gulf Desert Shield area in which any individual who

performed Desert Shield services (including the spouse of such

individual) is entitled to the benefits of section 7508 of the

Internal Revenue Code of 1986:

- the Persian Gulf

- the Red Sea

- the Gulf of Oman

- that portion of the Arabian Sea that lies north of 10 degrees

north latitude and west of 68 degrees east longitude

- the Gulf of Aden

- the total land area of Iraq, Kuwait, Saudi Arabia, Oman,

Bahrain, Qatar, and the United Arab Emirates.

George Bush.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6161, 6504, 6533, 6901,

7508A of this title.

-End-

-CITE-

26 USC Sec. 7508A 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7508A. Authority to postpone certain deadlines by reason of

Presidentially declared disaster or terroristic or military

actions

-STATUTE-

(a) In general

In the case of a taxpayer determined by the Secretary to be

affected by a Presidentially declared disaster (as defined in

section 1033(h)(3)) or a terroristic or military action (as defined

in section 692(c)(2)), the Secretary may specify a period of up to

1 year that may be disregarded in determining, under the internal

revenue laws, in respect of any tax liability of such taxpayer -

(1) whether any of the acts described in paragraph (1) of

section 7508(a) were performed within the time prescribed

therefor (determined without regard to extension under any other

provision of this subtitle for periods after the date (determined

by the Secretary) of such disaster or action),

(2) the amount of any interest, penalty, additional amount, or

addition to the tax for periods after such date, and

(3) the amount of any credit or refund.

(b) Special rules regarding pensions, etc.

In the case of a pension or other employee benefit plan, or any

sponsor, administrator, participant, beneficiary, or other person

with respect to such plan, affected by a disaster or action

described in subsection (a), the Secretary may specify a period of

up to 1 year which may be disregarded in determining the date by

which any action is required or permitted to be completed under

this title. No plan shall be treated as failing to be operated in

accordance with the terms of the plan solely as the result of

disregarding any period by reason of the preceding sentence.

(c) Special rules for overpayments

The rules of section 7508(b) shall apply for purposes of this

section.

-SOURCE-

(Added Pub. L. 105-34, title IX, Sec. 911(a), Aug. 5, 1997, 111

Stat. 877; amended Pub. L. 107-16, title VIII, Sec. 802(a), June 7,

2001, 115 Stat. 149; Pub. L. 107-134, title I, Sec. 112(a), Jan.

23, 2002, 115 Stat. 2433.)

-MISC1-

AMENDMENTS

2002 - Pub. L. 107-134 amended section catchline and text

generally, substituting present provisions for provisions which

had: in subsec. (a), authorized Secretary to postpone certain

tax-related deadlines by reason of presidentially declared

disaster, and in subsec. (b), provided that subsec. (a) would not

apply for the purpose of determining interest on any overpayment or

underpayment.

2001 - Subsec. (a). Pub. L. 107-16, Secs. 802(a), 901,

temporarily substituted "120 days" for "90 days" in introductory

provisions. See Effective and Termination Dates of 2001 Amendment

note below.

EFFECTIVE DATE OF 2002 AMENDMENT

Amendment by Pub. L. 107-134 applicable to disasters and

terroristic or military actions occurring on or after Sept. 11,

2001, with respect to any action of the Secretary of the Treasury,

the Secretary of Labor, or the Pension Benefit Guaranty Corporation

occurring on or after Jan. 23, 2002, see section 112(f) of Pub. L.

107-134, set out as a note under section 6081 of this title.

EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT

Pub. L. 107-16, title VIII, Sec. 802(b), June 7, 2001, 115 Stat.

149, provided that: "The amendment made by this section [amending

this section] shall take effect on the date of enactment of this

Act [June 7, 2001]."

Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or

limitation years beginning after Dec. 31, 2010, and the Internal

Revenue Code of 1986 to be applied and administered to such years

as if such amendment had never been enacted, see section 901 of

Pub. L. 107-16, set out as a note under section 1 of this title.

EFFECTIVE DATE

Section 911(c) of Pub. L. 105-34 provided that: "The amendments

made by this section [enacting this section] shall apply with

respect to any period for performing an act that has not expired

before the date of the enactment of this Act [Aug. 5, 1997]."

AUTHORITY TO POSTPONE CERTAIN TAX-RELATED DEADLINES BY REASON OF

Y2K FAILURES

Pub. L. 106-170, title V, Sec. 522, Dec. 17, 1999, 113 Stat.

1927, provided that:

"(a) In General. - In the case of a taxpayer determined by the

Secretary of the Treasury (or the Secretary's delegate) to be

affected by a Y2K failure, the Secretary may disregard a period of

up to 90 days in determining, under the internal revenue laws, in

respect of any tax liability (including any interest, penalty,

additional amount, or addition to the tax) of such taxpayer -

"(1) whether any of the acts described in paragraph (1) of

section 7508(a) of the Internal Revenue Code of 1986 (without

regard to the exceptions in parentheses in subparagraphs (A) and

(B)) were performed within the time prescribed therefor; and

"(2) the amount of any credit or refund.

"(b) Applicability of Certain Rules. - For purposes of this

section, rules similar to the rules of subsections (b) and (e) of

section 7508 of the Internal Revenue Code of 1986 shall apply."

ABATEMENT OF INTEREST ON UNDERPAYMENTS BY TAXPAYERS IN

PRESIDENTIALLY DECLARED DISASTER AREAS

Section 915 of Pub. L. 105-34, as amended by Pub. L. 105-277,

div. J, title IV, Sec. 4003(e)(1), Oct. 21, 1998, 112 Stat.

2681-909, provided that:

"(a) In General. - If the Secretary of the Treasury extends for

any period the time for filing income tax returns under section

6081 of the Internal Revenue Code of 1986 and the time for paying

income tax with respect to such returns under section 6161 of such

Code (and waives any penalties relating to the failure to so file

or so pay) for any individual located in a Presidentially declared

disaster area, the Secretary shall, notwithstanding section

7508A(b) of such Code, abate for such period the assessment of any

interest prescribed under section 6601 of such Code on such income

tax.

"(b) Presidentially Declared Disaster Area. - For purposes of

subsection (a), the term 'Presidentially declared disaster area'

means, with respect to any individual, any area which the President

has determined during 1997 or 1998 warrants assistance by the

Federal Government under the Robert T. Stafford Disaster Relief and

Emergency Assistance Act [42 U.S.C. 5121 et seq.].

"(c) Individual. - For purposes of this section, the term

'individual' shall not include any estate or trust.

"(d) Effective Date. - This section shall apply to disasters

declared after December 31, 1996."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6081, 6161, 6404 of this

title.

-End-

-CITE-

26 USC Sec. 7509 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7509. Expenditures incurred by the United States Postal

Service

-STATUTE-

The Postmaster General or his delegate shall at least once a

month transfer to the Treasury of the United States a statement of

the additional expenditures in the District of Columbia and

elsewhere incurred by the United States Postal Service in

performing the duties, if any, imposed upon such Service with

respect to chapter 21, relating to the tax under the Federal

Insurance Contributions Act, and the Secretary shall be authorized

and directed to advance from time to time to the credit of the

United States Postal Service, from appropriations made for the

collection of the taxes imposed by chapter 21, such sums as may be

required for such additional expenditures incurred by the United

States Postal Service.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 899; Pub. L. 94-455, title XIX,

Sec. 1906(a)(52), (b)(13)(A), Oct. 4, 1976, 90 Stat. 1832, 1834.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Insurance Contributions Act, referred to in text, is

act Aug. 16, 1954, ch. 736, Secs. 3101, 3102, 3111, 3112, 3121 to

3128, 68A Stat. 415, as amended, which is classified generally to

chapter 21 (Sec. 3101 et seq.) of this title. For complete

classification of this Act to the Code, see section 3128 of this

title and Tables.

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 substituted "United States Postal Service"

for "Post Office Department" in section catchline and wherever

appearing in text, "such Service" for "such Department", and struck

out ", together with the receipts required to be deposited under

section 6803(a)," after "Treasury of the United States" and "or his

delegate" after "Secretary".

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 effective first day of first month

which begins more than 90 days after Oct. 4, 1976, see section

1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013

of this title.

-End-

-CITE-

26 USC Sec. 7510 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7510. Exemption from tax of domestic goods purchased for the

United States

-STATUTE-

The privilege existing by provision of law on December 1, 1873,

or thereafter of purchasing supplies of goods imported from foreign

countries for the use of the United States, duty free, shall be

extended, under such regulations as the Secretary may prescribe, to

all articles of domestic production which are subject to tax by the

provisions of this title.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 900; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" wherever appearing.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 5001, 5002, 5003, 5004,

5005, 5173, 5214 of this title.

-End-

-CITE-

26 USC [Sec. 7511 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

[Sec. 7511. Repealed. Pub. L. 87-456, title III, Sec. 302(d), May

24, 1962, 76 Stat. 77]

-MISC1-

Section, act Aug. 16, 1954, ch. 736, 68A Stat. 900, related to

exemption of consular officers and employees of foreign states from

payment of internal revenue taxes on imported articles.

EFFECTIVE DATE OF REPEAL

Repeal effective with respect to articles entered, or withdrawn

from warehouse, for consumption on or after Aug. 31, 1963, see

section 501(a) of Pub. L. 87-456.

-End-

-CITE-

26 USC Sec. 7512 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7512. Separate accounting for certain collected taxes, etc.

-STATUTE-

(a) General rule

Whenever any person who is required to collect, account for, and

pay over any tax imposed by subtitle C or chapter 33 -

(1) at the time and in the manner prescribed by law or

regulations (A) fails to collect, truthfully account for, or pay

over such tax, or (B) fails to make deposits, payments, or

returns of such tax, and

(2) is notified, by notice delivered in hand to such person, of

any such failure,

then all the requirements of subsection (b) shall be complied with.

In the case of a corporation, partnership, or trust, notice

delivered in hand to an officer, partner, or trustee, shall, for

purposes of this section, be deemed to be notice delivered in hand

to such corporation, partnership, or trust and to all officers,

partners, trustees, and employees thereof.

(b) Requirements

Any person who is required to collect, account for, and pay over

any tax imposed by subtitle C or chapter 33, if notice has been

delivered to such person in accordance with subsection (a), shall

collect the taxes imposed by subtitle C or chapter 33 which become

collectible after delivery of such notice, shall (not later than

the end of the second banking day after any amount of such taxes is

collected) deposit such amount in a separate account in a bank (as

defined in section 581), and shall keep the amount of such taxes in

such account until payment over to the United States. Any such

account shall be designated as a special fund in trust for the

United States, payable to the United States by such person as

trustee.

(c) Relief from further compliance with subsection (b)

Whenever the Secretary is satisfied, with respect to any

notification made under subsection (a), that all requirements of

law and regulations with respect to the taxes imposed by subtitle C

or chapter 33, as the case may be, will henceforth be complied

with, he may cancel such notification. Such cancellation shall take

effect at such time as is specified in the notice of such

cancellation.

-SOURCE-

(Added Pub. L. 85-321, Sec. 1, Feb. 11, 1958, 72 Stat. 5; amended

Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90

Stat. 1834; Pub. L. 96-223, title I, Sec. 101(c)(3), Apr. 2, 1980,

94 Stat. 251; Pub. L. 100-418, title I, Sec. 1941(b)(2)(O), Aug.

23, 1988, 102 Stat. 1324.)

-MISC1-

AMENDMENTS

1988 - Subsec. (a). Pub. L. 100-418, Sec. 1941(b)(2)(O)(i),

substituted "or chapter 33" for ", by chapter 33, or by section

4986" in introductory provisions.

Subsec. (b). Pub. L. 100-418, Sec. 1941(b)(2)(O)(i), (ii),

substituted "or chapter 33" for ", by chapter 33, or by section

4986" and "or chapter 33" for ", chapter 33, or section 4986".

Subsec. (c). Pub. L. 100-418, Sec. 1941(b)(2)(O)(ii), substituted

"or chapter 33" for ", chapter 33, or section 4986".

1980 - Subsecs. (a) to (c). Pub. L. 96-223 inserted references to

tax imposed by section 4986.

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" wherever appearing.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-418 applicable to crude oil removed from

the premises on or after Aug. 23, 1988, see section 1941(c) of Pub.

L. 100-418, set out as a note under section 164 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-223 applicable to periods after Feb. 29,

1980, see section 101(i) of Pub. L. 96-223, set out as a note under

section 6161 of this title.

NOTIFICATION OF FAILURE TO COLLECT, ACCOUNT FOR, AND PAY OVER TAXES

Section 4 of Pub. L. 85-321, as amended by Pub. L. 99-514, Sec.

2, Oct. 22, 1986, 100 Stat. 2095, provided that: "Notification may

be made under section 7512(a) of the Internal Revenue Code of 1986

[formerly I.R.C. 1954] (as added by the first section of this Act)

-

"(1) in the case of taxes imposed by subtitle C of such Code,

only with respect to pay periods beginning after the date of the

enactment of this Act [Feb. 11, 1958]; and

"(2) in the case of taxes imposed by chapter 33 of such Code,

only with respect to taxes so imposed after the date of the

enactment of this Act [Feb. 11, 1958]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7215 of this title.

-End-

-CITE-

26 USC Sec. 7513 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7513. Reproduction of returns and other documents

-STATUTE-

(a) In general

The Secretary is authorized to have any Federal agency or any

person process films or other photoimpressions of any return,

document, or other matter, and make reproductions from films or

photoimpressions of any return, document, or other matter.

(b) Regulations

The Secretary shall prescribe regulations which shall provide

such safeguards as in the opinion of the Secretary are necessary or

appropriate to protect the film, photoimpressions, and

reproductions made therefrom, against any unauthorized use, and to

protect the information contained therein against any unauthorized

disclosure.

(c) Penalty

For penalty for violation of regulations for safeguarding

against unauthorized use of any film or photoimpression, or

reproduction made therefrom, and against unauthorized

disclosure of information contained therein, see section 7213.

-SOURCE-

(Added Pub. L. 85-866, title I, Sec. 90(a), Sept. 2, 1958, 72 Stat.

1666; amended Pub. L. 94-455, title XII, Sec. 1202(f), title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1687, 1834.)

-MISC1-

AMENDMENTS

1976 - Subsecs. (a), (b). Pub. L. 94-455, Sec. 1906(b) (13)(A),

struck out "or his delegate" after "Secretary" wherever appearing.

Subsecs. (c), (d). Pub. L. 94-455, Sec. 1202(f), redesignated

subsec. (d) as (c) and struck out former subsec. (c) which related

to legal status and evidentiary use of reproductions.

EFFECTIVE DATE

Section effective Aug. 17, 1954, see section 1(c) of Pub. L.

85-866, set out as an Effective Date of 1958 Amendment note under

section 165 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 6103 of this title.

-End-

-CITE-

26 USC Sec. 7514 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7514. Authority to prescribe or modify seals

-STATUTE-

The Secretary is authorized to prescribe or modify seals of

office for the district directors of internal revenue and other

officers or employees of the Treasury Department to whom any of the

functions of the Secretary of the Treasury shall have been or may

be delegated. Each seal so prescribed shall contain such device as

the Secretary may select. Each seal shall remain in the custody of

any officer or employee whom the Secretary may designate, and, in

accordance with the regulations approved by the Secretary, may be

affixed in lieu of the seal of the Treasury Department to any

certificate or attestation (except for material to be published in

the Federal Register) that may be required of such officer or

employee. Judicial notice shall be taken of any seal prescribed in

accordance with this authority, a facsimile of which has been

published in the Federal Register together with the regulations

prescribing such seal and the affixation thereof.

-SOURCE-

(Added Pub. L. 85-866, title I, Sec. 91(a), Sept. 2, 1958, 72 Stat.

1667; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), (M),

Oct. 4, 1976, 90 Stat. 1834, 1835.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 substituted "functions of the Secretary of

the Treasury" for "functions of the Secretary" after "whom any of

the" and struck out "or his delegate" after "Secretary" wherever

appearing.

EFFECTIVE DATE

Section effective Aug. 17, 1954, see section 1(c) of Pub. L.

85-866, set out as an Effective Date of 1958 Amendment note under

section 165 of this title.

-End-

-CITE-

26 USC [Sec. 7515 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

[Sec. 7515. Repealed. Pub. L. 94-455, title XII, Sec. 1202(h)(4),

Oct. 4, 1976, 90 Stat. 1688]

-MISC1-

Section, added Pub. L. 87-870, Sec. 3(a)(1), Oct. 23, 1962, 76

Stat. 1160, authorized Secretary, within his discretion and upon

written request, to make special statistical studies and

compilations from any information received by compliance with this

title, such studies were authorized to be made jointly with party

or parties requesting them and transcripts to be made available to

requesting party for a fee.

EFFECTIVE DATE OF REPEAL

Repeal effective Jan. 1, 1977, see section 1202(i) of Pub. L.

94-455, set out as an Effective Date of 1976 Amendment note under

section 6103 of this title.

-End-

-CITE-

26 USC Sec. 7516 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7516. Supplying training and training aids on request

-STATUTE-

The Secretary is authorized within his discretion, upon written

request, to admit employees and officials of any State, the

Commonwealth of Puerto Rico, any possession of the United States,

any political subdivision or instrumentality of any of the

foregoing, the District of Columbia, or any foreign government to

training courses conducted by the Internal Revenue Service, and to

supply them with texts and other training aids. The Secretary may

require payment from the party or parties making the request of a

reasonable fee not to exceed the cost of the training and training

aids supplied pursuant to such request.

-SOURCE-

(Added Pub. L. 87-870, Sec. 3(a)(1), Oct. 23, 1962, 76 Stat. 1160;

amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4,

1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" wherever appearing.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7809 of this title.

-End-

-CITE-

26 USC Sec. 7517 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7517. Furnishing on request of statement explaining estate or

gift valuation

-STATUTE-

(a) General rule

If the Secretary makes a determination or a proposed

determination of the value of an item of property for purposes of

the tax imposed under chapter 11, 12, or 13, he shall furnish, on

the written request of the executor, donor, or the person required

to make the return of the tax imposed by chapter 13 (as the case

may be), to such executor, donor, or person a written statement

containing the material required by subsection (b). Such statement

shall be furnished not later than 45 days after the later of the

date of such request or the date of such determination or proposed

determination.

(b) Contents of statement

A statement required to be furnished under subsection (a) with

respect to the value of an item of property shall -

(1) explain the basis on which the valuation was determined or

proposed,

(2) set forth any computation used in arriving at such value,

and

(3) contain a copy of any expert appraisal made by or for the

Secretary.

(c) Effect of statement

Except to the extent otherwise provided by law, the value

determined or proposed by the Secretary with respect to which a

statement is furnished under this section, and the method used in

arriving at such value, shall not be binding on the Secretary.

-SOURCE-

(Added Pub. L. 94-455, title XX, Sec. 2008(a)(1), Oct. 4, 1976, 90

Stat. 1891.)

-MISC1-

EFFECTIVE DATE

Section 2008(d)(1) of Pub. L. 94-455, as amended by Pub. L.

99-514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "The

amendments made by subsection (a) [enacting this section and

amending sections 2031 and 2512 of this title] -

"(A) insofar as they relate to the tax imposed under chapter 11

of the Internal Revenue Code of 1986 [formerly I.R.C. 1954,

section 2001 et seq. of this title], shall apply to the estates

of decedents dying after December 31, 1976, and

"(B) insofar as they relate to the tax imposed under chapter 12

of such Code [section 2501 et seq. of this title], shall apply to

gifts made after December 31, 1976."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 2031, 2512 of this title.

-End-

-CITE-

26 USC Sec. 7518 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7518. Tax incentives relating to merchant marine capital

construction funds

-STATUTE-

(a) Ceiling on deposits

(1) In general

The amount deposited in a fund established under section 607 of

the Merchant Marine Act, 1936 (hereinafter in this section

referred to as a "capital construction fund") shall not exceed

for any taxable year the sum of:

(A) that portion of the taxable income of the owner or lessee

for such year (computed as provided in chapter 1 but without

regard to the carryback of any net operating loss or net

capital loss and without regard to this section) which is

attributable to the operation of the agreement vessels in the

foreign or domestic commerce of the United States or in the

fisheries of the United States,

(B) the amount allowable as a deduction under section 167 for

such year with respect to the agreement vessels,

(C) if the transaction is not taken into account for purposes

of subparagraph (A), the net proceeds (as defined in joint

regulations) from -

(i) the sale or other disposition of any agreement vessel,

or

(ii) insurance or indemnity attributable to any agreement

vessel, and

(D) the receipts from the investment or reinvestment of

amounts held in such fund.

(2) Limitations on deposits by lessees

In the case of a lessee, the maximum amount which may be

deposited with respect to an agreement vessel by reason of

paragraph (1)(B) for any period shall be reduced by any amount

which, under an agreement entered into under section 607 of the

Merchant Marine Act, 1936, the owner is required or permitted to

deposit for such period with respect to such vessel by reason of

paragraph (1)(B).

(3) Certain barges and containers included

For purposes of paragraph (1), the term "agreement vessel"

includes barges and containers which are part of the complement

of such vessel and which are provided for in the agreement.

(b) Requirements as to investments

(1) In general

Amounts in any capital construction fund shall be kept in the

depository or depositories specified in the agreement and shall

be subject to such trustee and other fiduciary requirements as

may be specified by the Secretary.

(2) Limitation on fund investments

Amounts in any capital construction fund may be invested only

in interest-bearing securities approved by the Secretary; except

that, if such Secretary consents thereto, an agreed percentage

(not in excess of 60 percent) of the assets of the fund may be

invested in the stock of domestic corporations. Such stock must

be currently fully listed and registered on an exchange

registered with the Securities and Exchange Commission as a

national securities exchange, and must be stock which would be

acquired by prudent men of discretion and intelligence in such

matters who are seeking a reasonable income and the preservation

of their capital. If at any time the fair market value of the

stock in the fund is more than the agreed percentage of the

assets in the fund, any subsequent investment of amounts

deposited in the fund, and any subsequent withdrawal from the

fund, shall be made in such a way as to tend to restore the fund

to a situation in which the fair market value of the stock does

not exceed such agreed percentage.

(3) Investment in certain preferred stock permitted

For purposes of this subsection, if the common stock of a

corporation meets the requirements of this subsection and if the

preferred stock of such corporation would meet such requirements

but for the fact that it cannot be listed and registered as

required because it is nonvoting stock, such preferred stock

shall be treated as meeting the requirements of this subsection.

(c) Nontaxability for deposits

(1) In general

For purposes of this title -

(A) taxable income (determined without regard to this section

and section 607 of the Merchant Marine Act, 1936) for the

taxable year shall be reduced by an amount equal to the amount

deposited for the taxable year out of amounts referred to in

subsection (a)(1)(A),

(B) gain from a transaction referred to in subsection

(a)(1)(C) shall not be taken into account if an amount equal to

the net proceeds (as defined in joint regulations) from such

transaction is deposited in the fund,

(C) the earnings (including gains and losses) from the

investment and reinvestment of amounts held in the fund shall

not be taken into account,

(D) the earnings and profits (within the meaning of section

316) of any corporation shall be determined without regard to

this section and section 607 of the Merchant Marine Act, 1936,

and

(E) in applying the tax imposed by section 531 (relating to

the accumulated earnings tax), amounts while held in the fund

shall not be taken into account.

(2) Only qualified deposits eligible for treatment

Paragraph (1) shall apply with respect to any amount only if

such amount is deposited in the fund pursuant to the agreement

and not later than the time provided in joint regulations.

(d) Establishment of accounts

For purposes of this section -

(1) In general

Within a capital construction fund 3 accounts shall be

maintained:

(A) the capital account,

(B) the capital gain account, and

(C) the ordinary income account.

(2) Capital account

The capital account shall consist of -

(A) amounts referred to in subsection (a)(1)(B),

(B) amounts referred to in subsection (a)(1)(C) other than

that portion thereof which represents gain not taken into

account by reason of subsection (c)(1)(B),

(C) the percentage applicable under section 243(a)(1) of any

dividend received by the fund with respect to which the person

maintaining the fund would (but for subsection (c)(1)(C)) be

allowed a deduction under section 243, and

(D) interest income exempt from taxation under section 103.

(3) Capital gain account

The capital gain account shall consist of -

(A) amounts representing capital gains on assets held for

more than 6 months and referred to in subsection (a)(1)(C) or

(a)(1)(D), reduced by

(B) amounts representing capital losses on assets held in the

fund for more than 6 months.

(4) Ordinary income account

The ordinary income account shall consist of -

(A) amounts referred to in subsection (a)(1)(A),

(B)(i) amounts representing capital gains on assets held for

6 months or less and referred to in subsection (a)(1)(C) or

(a)(1)(D), reduced by

(ii) amounts representing capital losses on assets held in

the fund for 6 months or less,

(C) interest (not including any tax-exempt interest referred

to in paragraph (2)(D)) and other ordinary income (not

including any dividend referred to in subparagraph (E))

received on assets held in the fund,

(D) ordinary income from a transaction described in

subsection (a)(1)(C), and

(E) the portion of any dividend referred to in paragraph

(2)(C) not taken into account under such paragraph.

(5) Capital losses only allowed to offset certain gains

Except on termination of a capital construction fund, capital

losses referred to in paragraph (3)(B) or in paragraph (4)(B)(ii)

shall be allowed only as an offset to gains referred to in

paragraph (3)(A) or (4)(B)(i), respectively.

(e) Purposes of qualified withdrawals

(1) In general

A qualified withdrawal from the fund is one made in accordance

with the terms of the agreement but only if it is for:

(A) the acquisition, construction, or reconstruction of a

qualified vessel,

(B) the acquisition, construction, or reconstruction of

barges and containers which are part of the complement of a

qualified vessel, or

(C) the payment of the principal on indebtedness incurred in

connection with the acquisition, construction, or

reconstruction of a qualified vessel or a barge or container

which is part of the complement of a qualified vessel.

Except to the extent provided in regulations prescribed by the

Secretary, subparagraph (B), and so much of subparagraph (C) as

relates only to barges and containers, shall apply only with

respect to barges and containers constructed in the United

States.

(2) Penalty for failing to fulfill any substantial obligation

Under joint regulations, if the Secretary determines that any

substantial obligation under any agreement is not being

fulfilled, he may, after notice and opportunity for hearing to

the person maintaining the fund, treat the entire fund or any

portion thereof as an amount withdrawn from the fund in a

nonqualified withdrawal.

(f) Tax treatment of qualified withdrawals

(1) Ordering rule

Any qualified withdrawal from a fund shall be treated -

(A) first as made out of the capital account,

(B) second as made out of the capital gain account, and

(C) third as made out of the ordinary income account.

(2) Adjustment to basis of vessel, etc., where withdrawal from

ordinary income account

If any portion of a qualified withdrawal for a vessel, barge,

or container is made out of the ordinary income account, the

basis of such vessel, barge, or container shall be reduced by an

amount equal to such portion.

(3) Adjustment to basis of vessel, etc., where withdrawal from

capital gain account

If any portion of a qualified withdrawal for a vessel, barge,

or container is made out of the capital gain account, the basis

of such vessel, barge, or container shall be reduced by an amount

equal to such portion.

(4) Adjustment to basis of vessels, etc., where withdrawals pay

principal on debt

If any portion of a qualified withdrawal to pay the principal

on any indebtedness is made out of the ordinary income account or

the capital gain account, then an amount equal to the aggregate

reduction which would be required by paragraphs (2) and (3) if

this were a qualified withdrawal for a purpose described in such

paragraphs shall be applied, in the order provided in joint

regulations, to reduce the basis of vessels, barges, and

containers owned by the person maintaining the fund. Any amount

of a withdrawal remaining after the application of the preceding

sentence shall be treated as a nonqualified withdrawal.

(5) Ordinary income recapture of basis reduction

If any property the basis of which was reduced under paragraph

(2), (3), or (4) is disposed of, any gain realized on such

disposition, to the extent it does not exceed the aggregate

reduction in the basis of such property under such paragraphs,

shall be treated as an amount referred to in subsection (g)(3)(A)

which was withdrawn on the date of such disposition. Subject to

such conditions and requirements as may be provided in joint

regulations, the preceding sentence shall not apply to a

disposition where there is a redeposit in an amount determined

under joint regulations which will, insofar as practicable,

restore the fund to the position it was in before the withdrawal.

(g) Tax treatment of nonqualified withdrawals

(1) In general

Except as provided in subsection (h), any withdrawal from a

capital construction fund which is not a qualified withdrawal

shall be treated as a nonqualified withdrawal.

(2) Ordering rule

Any nonqualified withdrawal from a fund shall be treated -

(A) first as made out of the ordinary income account,

(B) second as made out of the capital gain account, and

(C) third as made out of the capital account.

For purposes of this section, items withdrawn from any account

shall be treated as withdrawn on a first-in-first-out basis;

except that (i) any nonqualified withdrawal for research,

development, and design expenses incident to new and advanced

ship design, machinery and equipment, and (ii) any amount treated

as a nonqualified withdrawal under the second sentence of

subsection (f)(4), shall be treated as withdrawn on a

last-in-first-out basis.

(3) Operating rules

For purposes of this title -

(A) any amount referred to in paragraph (2)(A) shall be

included in income as an item of ordinary income for the

taxable year in which the withdrawal is made,

(B) any amount referred to in paragraph (2)(B) shall be

included in income for the taxable year in which the withdrawal

is made as an item of gain realized during such year from the

disposition of an asset held for more than 6 months, and

(C) for the period on or before the last date prescribed for

payment of tax for the taxable year in which this withdrawal is

made -

(i) no interest shall be payable under section 6601 and no

addition to the tax shall be payable under section 6651,

(ii) interest on the amount of the additional tax

attributable to any item referred to in subparagraph (A) or

(B) shall be paid at the applicable rate (as defined in

paragraph (4)) from the last date prescribed for payment of

the tax for the taxable year for which such item was

deposited in the fund, and

(iii) no interest shall be payable on amounts referred to

in clauses (i) and (ii) of paragraph (2) or in the case of

any nonqualified withdrawal arising from the application of

the recapture provision of section 606(5) of the Merchant

Marine Act of 1936 as in effect on December 31, 1969.

(4) Interest rate

For purposes of paragraph (3)(C)(ii), the applicable rate of

interest for any nonqualified withdrawal -

(A) made in a taxable year beginning in 1970 or 1971 is 8

percent, or

(B) made in a taxable year beginning after 1971, shall be

determined and published jointly by the Secretary of the

Treasury or his delegate and the applicable Secretary and shall

bear a relationship to 8 percent which the Secretaries

determine under joint regulations to be comparable to the

relationship which the money rates and investment yields for

the calendar year immediately preceding the beginning of the

taxable year bear to the money rates and investment yields for

the calendar year 1970.

(5) Amount not withdrawn from fund after 25 years from deposit

taxed as nonqualified withdrawal

(A) In general

The applicable percentage of any amount which remains in a

capital construction fund at the close of the 26th, 27th, 28th,

29th, or 30th taxable year following the taxable year for which

such amount was deposited shall be treated as a nonqualified

withdrawal in accordance with the following table:

If the amount remains in the fund The applicable

at the close of the - percentage is -

26th taxable year 20 percent

27th taxable year 40 percent

28th taxable year 60 percent

29th taxable year 80 percent

30th taxable year 100 percent.

(B) Earnings treated as deposits

The earnings of any capital construction fund for any taxable

year (other than net gains) shall be treated for purposes of

this paragraph as an amount deposited for such taxable year.

(C) Amounts committed treated as withdrawn

For purposes of subparagraph (A), an amount shall not be

treated as remaining in a capital construction fund at the

close of any taxable year to the extent there is a binding

contract at the close of such year for a qualified withdrawal

of such amount with respect to an identified item for which

such withdrawal may be made.

(D) Authority to treat excess funds as withdrawn

If the Secretary determines that the balance in any capital

construction fund exceeds the amount which is appropriate to

meet the vessel construction program objectives of the person

who established such fund, the amount of such excess shall be

treated as a nonqualified withdrawal under subparagraph (A)

unless such person develops appropriate program objectives

within 3 years to dissipate such excess.

(E) Amounts in fund on January 1, 1987

For purposes of this paragraph, all amounts in a capital

construction fund on January 1, 1987, shall be treated as

deposited in such fund on such date.

(6) Nonqualified withdrawals taxed at highest marginal rate

(A) In general

In the case of any taxable year for which there is a

nonqualified withdrawal (including any amount so treated under

paragraph (5)), the tax imposed by chapter 1 shall be

determined -

(i) by excluding such withdrawal from gross income, and

(ii) by increasing the tax imposed by chapter 1 by the

product of the amount of such withdrawal and the highest rate

of tax specified in section 1 (section 11 in the case of a

corporation).

With respect to the portion of any nonqualified withdrawal made

out of the capital gain account during a taxable year to which

section 1(h) or 1201(a) applies, the rate of tax taken into

account under the preceding sentence shall not exceed 20

percent (34 percent in the case of a corporation).

(B) Tax benefit rule

If any portion of a nonqualified withdrawal is properly

attributable to deposits (other than earnings on deposits) made

by the taxpayer in any taxable year which did not reduce the

taxpayer's liability for tax under chapter 1 for any taxable

year preceding the taxable year in which such withdrawal occurs

-

(i) such portion shall not be taken into account under

subparagraph (A), and

(ii) an amount equal to such portion shall be treated as

allowed as a deduction under section 172 for the taxable year

in which such withdrawal occurs.

(C) Coordination with deduction for net operating losses

Any nonqualified withdrawal excluded from gross income under

subparagraph (A) shall be excluded in determining taxable

income under section 172(b)(2).

(h) Certain corporate reorganizations and changes in partnerships

Under joint regulations -

(1) a transfer of a fund from one person to another person in a

transaction to which section 381 applies may be treated as if

such transaction did not constitute a nonqualified withdrawal,

and

(2) a similar rule shall be applied in the case of a

continuation of a partnership.

(i) Definitions

For purposes of this section, any term defined in section 607(k)

of the Merchant Marine Act, 1936 which is also used in this section

(including the definition of "Secretary") shall have the meaning

given such term by such section 607(k) as in effect on the date of

the enactment of this section.

-SOURCE-

(Added Pub. L. 99-514, title II, Sec. 261(b), Oct. 22, 1986, 100

Stat. 2208; amended Pub. L. 100-647, title I, Secs. 1002(m)(1),

1018(u)(23), Nov. 10, 1988, 102 Stat. 3382, 3591; Pub. L. 101-508,

title XI, Sec. 11101(d)(7)(A), Nov. 5, 1990, 104 Stat. 1388-405;

Pub. L. 105-34, title III, Sec. 311(c)(2), Aug. 5, 1997, 111 Stat.

835.)

-REFTEXT-

REFERENCES IN TEXT

Section 607 of the Merchant Marine Act, 1936, referred to in

subsecs. (a), (c), and (i), is classified to section 1177 of Title

46, Appendix, Shipping.

Section 606(5) of the Merchant Marine Act of 1936, referred to in

subsec. (g)(3)(C)(iii), is classified to section 1176(5) of Title

46, Appendix.

The date of the enactment of this section, referred to in subsec.

(i), is the date of enactment of Pub. L. 99-514, which was approved

Oct. 22, 1986.

-MISC1-

AMENDMENTS

1997 - Subsec. (g)(6)(A). Pub. L. 105-34 substituted "20 percent"

for "28 percent" in concluding provisions.

1990 - Subsec. (g)(6)(A). Pub. L. 101-508 substituted "section

1(h)" for "section 1(j)" in last sentence.

1988 - Subsec. (g)(1). Pub. L. 100-647, Sec. 1018(u)(23),

substituted "not a qualified withdrawal" for "not qualified

withdrawal".

Subsec. (g)(6)(A). Pub. L. 100-647, Sec. 1002(m)(1), substituted

"section 1(j)" for "section 1(i)".

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by Pub. L. 105-34 applicable to taxable years ending

after May 6, 1997, see section 311(d) of Pub. L. 105-34, set out as

a note under section 1 of this title.

EFFECTIVE DATE OF 1990 AMENDMENT

Amendment by Pub. L. 101-508 applicable to taxable years

beginning after Dec. 31, 1990, see section 11101(e) of Pub. L.

101-508, set out as a note under section 1 of this title.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-647 effective, except as otherwise

provided, as if included in the provision of the Tax Reform Act of

1986, Pub. L. 99-514, to which such amendment relates, see section

1019(a) of Pub. L. 100-647, set out as a note under section 1 of

this title.

EFFECTIVE DATE

Section 261(g) of Pub. L. 99-514 provided that: "The amendments

made by this section [enacting this section and amending section 26

of this title and section 1177 of Title 46, Appendix, Shipping]

shall apply to taxable years beginning after December 31, 1986."

MERCHANT MARINE CAPITAL CONSTRUCTION FUNDS

Section 261(a) of Pub. L. 99-514 provided that: "The purpose of

this section [enacting this section, amending section 26 of this

title and section 1177 of Title 46, Appendix, and enacting

provisions set out as a note above] is to coordinate the

application of the Internal Revenue Code of 1986 with the capital

construction program under the Merchant Marine Act, 1936 [46 App.

U.S.C. 1101 et seq.]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 26, 56 of this title;

title 46 App. section 1177.

-End-

-CITE-

26 USC Sec. 7519 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7519. Required payments for entities electing not to have

required taxable year

-STATUTE-

(a) General rule

This section applies to a partnership or S corporation for any

taxable year, if -

(1) an election under section 444 is in effect for the taxable

year, and

(2) the required payment determined under subsection (b) for

such taxable year (or any preceding taxable year) exceeds $500.

(b) Required payment

For purposes of this section, the term "required payment" means,

with respect to any applicable election year of a partnership or S

corporation, an amount equal to -

(1) the excess of the product of -

(A) the applicable percentage of the adjusted highest section

1 rate, multiplied by

(B) the net base year income of the entity, over

(2) the net required payment balance.

For purposes of paragraph (1)(A), the term "adjusted highest

section 1 rate" means the highest rate of tax in effect under

section 1 as of the end of the base year plus 1 percentage point

(or, in the case of applicable election years beginning in 1987, 36

percent).

(c) Refund of payments

(1) In general

If, for any applicable election year, the amount determined

under subsection (b)(2) exceeds the amount determined under

subsection (b)(1), the entity shall be entitled to a refund of

such excess for such year.

(2) Termination of elections, etc.

If -

(A) an election under section 444 is terminated effective

with respect to any year, or

(B) the entity is liquidated during any year, the entity

shall be entitled to a refund of the net required payment

balance.

(3) Date on which refund payable

Any refund under this subsection shall be payable on the later

of -

(A) April 15 of the calendar year following -

(i) in the case of the year referred to in paragraph (1),

the calendar year in which it begins,

(ii) in the case of the year referred to in paragraph (2),

the calendar year in which it ends, or

(B) the day 90 days after the day on which claim therefor is

filed with the Secretary.

(d) Net base year income

For purposes of this section -

(1) In general

An entity's net base year income shall be equal to the sum of -

(A) the deferral ratio multiplied by the entity's net income

for the base year, plus

(B) the excess (if any) of -

(i) the deferral ratio multiplied by the aggregate amount

of applicable payments made by the entity during the base

year, over

(ii) the aggregate amount of such applicable payments made

during the deferral period of the base year.

For purposes of this paragraph, the term "deferral ratio" means

the ratio which the number of months in the deferral period of

the base year bears to the number of months in the partnership's

or S corporation's taxable year.

(2) Net income

Net income is determined by taking into account the aggregate

amount of the following items -

(A) Partnerships

In the case of a partnership, net income shall be the amount

(not below zero) determined by taking into account the

aggregate amount of the partnership's items described in

section 702(a) (other than credits and tax-exempt income).

(B) S corporations

In the case of an S corporation, net income shall be the

amount (not below zero) determined by taking into account the

aggregate amount of the S corporation's items described in

section 1366(a) (other than credits and tax-exempt income). If

the S corporation was a C corporation for the base year, its

taxable income for such year shall be treated as its net income

for such year (and such corporation shall be treated as an S

corporation for such taxable year for purposes of paragraph

(3)).

(C) Certain limitations disregarded

For purposes of subparagraph (A) or (B), any limitation on

the amount of any item described in either such paragraph which

may be taken into account for purposes of computing the taxable

income of a partner or shareholder shall be disregarded.

(3) Applicable payments

(A) In general

The term "applicable payment" means amounts paid by a

partnership or S corporation which are includible in gross

income of a partner or shareholder.

(B) Exceptions

The term "applicable payment" shall not include any -

(i) gain from the sale or exchange of property between the

partner or shareholder and the partnership or S corporation,

and

(ii) dividend paid by the S corporation.

(4) Applicable percentage

The applicable percentage is the percentage determined in

accordance with the following table:

If the applicable election year

of the partnership or S The applicable

corporation begins during: percentage is:

1987 25

1988 50

1989 75

1990 or thereafter 100.

Notwithstanding the preceding provisions of this paragraph, the

applicable percentage for any partnership or S corporation shall

be 100 percent unless more than 50 percent of such entity's net

income for the short taxable year which would have resulted if

the entity had not made an election under section 444 would have

been allocated to partners or shareholders who would have been

entitled to the benefits of section 806(e)(2)(C) of the Tax

Reform Act of 1986 with respect to such income.

(5) Treatment of guaranteed payments

(A) In general

Any guaranteed payment by a partnership shall not be treated

as an applicable payment, and the amount of the net income of

the partnership shall be determined by not taking such

guaranteed payment into account.

(B) Guaranteed payment

For purposes of subparagraph (A), the term "guaranteed

payment" means any payment referred to in section 707(c).

(e) Other definitions and special rules

For purposes of this section -

(1) Deferral period

The term "deferral period" has the meaning given to such term

by section 444(b)(4).

(2) Years

(A) Base year

The term "base year" means, with respect to any applicable

election year, the taxable year of the partnership or S

corporation preceding such applicable election year.

(B) Applicable election year

The term "applicable election year" means any taxable year of

a partnership or S corporation with respect to which an

election is in effect under section 444.

(3) Requirement of reporting

Each partnership or S corporation which makes an election under

section 444 shall include on any required return or statement

such information as the Secretary shall prescribe as is necessary

to carry out the provisions of this section.

(4) Net required payment balance

The term "net required payment balance" means the excess (if

any) of -

(A) the aggregate of the required payments under this section

for all preceding applicable election years, over

(B) the aggregate amount allowable as a refund to the entity

under subsection (c) for all preceding applicable election

years.

(f) Administrative provisions

(1) In general

Except as otherwise provided in this subsection or in

regulations prescribed by the Secretary, any payment required by

this section shall be assessed and collected in the same manner

as if it were a tax imposed by subtitle C.

(2) Due date

The amount of any payment required by this section shall be

paid on or before April 15 of the calendar year following the

calendar year in which the applicable election year begins (or

such later date as may be prescribed by the Secretary).

(3) Interest

For purposes of determining interest, any payment required by

this section shall be treated as a tax; except that no interest

shall be allowed with respect to any refund of a payment made

under this section.

(4) Penalties

(A) In general

In the case of any failure by any person to pay on the date

prescribed therefor any amount required by this section, there

shall be imposed on such person a penalty of 10 percent of the

underpayment. For purposes of the preceding sentence, the term

"underpayment" means the excess of the amount of the payment

required under this section over the amount (if any) of such

payment paid on or before the date prescribed therefor. No

penalty shall be imposed under this subparagraph on any failure

which is shown to be due to reasonable cause and not willful

neglect.

(B) Negligence and fraud penalties made applicable

For purposes of part II of subchapter A of chapter 68, any

payment required by this section shall be treated as a tax.

(C) Willful failure

If any partnership or S corporation willfully fails to comply

with the requirements of this section, section 444 shall cease

to apply with respect to such partnership or S corporation.

(g) Regulations

The Secretary shall prescribe such regulations as may be

necessary or appropriate to carry out the provisions of this

section and section 280H, including regulations providing for

appropriate adjustments in the application of this section and

sections 280H and 444 in cases where -

(1) 2 or more applicable election years begin in the same

calendar year, or

(2) the base year is a taxable year of less than 12 months.

-SOURCE-

(Added Pub. L. 100-203, title X, Sec. 10206(b)(1), Dec. 22, 1987,

101 Stat. 1330-398; amended Pub. L. 100-647, title II, Sec.

2004(e)(4)-(10), (14)(B), Nov. 10, 1988, 102 Stat. 3601, 3602; Pub.

L. 101-239, title VII, Secs. 7721(c)(12), 7821(b), Dec. 19, 1989,

103 Stat. 2400, 2424; Pub. L. 101-508, title XI, Sec. 11704(a)(29),

Nov. 5, 1990, 104 Stat. 1388-519; Pub. L. 105-34, title XII, Sec.

1281(d), Aug. 5, 1997, 111 Stat. 1037.)

-REFTEXT-

REFERENCES IN TEXT

Section 806(e)(2)(C) of the Tax Reform Act of 1986, referred to

in subsec. (d)(4), is section 806(e)(2)(C) of Pub. L. 99-514, which

is set out as a note under section 1378 of this title.

-MISC1-

AMENDMENTS

1997 - Subsec. (f)(4)(A). Pub. L. 105-34 inserted at end "No

penalty shall be imposed under this subparagraph on any failure

which is shown to be due to reasonable cause and not willful

neglect."

1990 - Subsec. (c)(3). Pub. L. 101-508 substituted "payable on

the later of" for "payable on later of".

1989 - Subsec. (d)(4). Pub. L. 101-239, Sec. 7821(b), struck out

"for taxable years beginning after 1987," before "the applicable

percentage" and substituted "unless more than 50 percent" for "if

more than 50 percent" and "who would have been entitled" for "who

would not have been entitled".

Subsec. (f)(4)(B). Pub. L. 101-239, Sec. 7721(c)(12), substituted

"part II of subchapter A of chapter 68" for "section 6653".

1988 - Subsec. (b)(2). Pub. L. 100-647, Sec. 2004(e)(4)(A),

amended par. (2) generally. Prior to amendment, par. (2) read as

follows: "the amount of the required payment for the preceding

applicable election year."

Subsec. (c). Pub. L. 100-647, Sec. 2004(e)(5), amended subsec.

(c) generally. Prior to amendment, subsec. (c) read as follows: "If

the amount determined under subsection (b)(2) exceeds the amount

determined under subsection (b)(1), then the entity shall be

entitled to a refund of such excess."

Subsec. (d)(2)(A). Pub. L. 100-647, Sec. 2004(e)(10), substituted

"(other than credits and tax-exempt income)" for "(other than

credits)".

Subsec. (d)(2)(B). Pub. L. 100-647, Sec. 2004(e)(7), (10),

substituted "(other than credits and tax-exempt income)" for

"(other than credits)" and inserted before period at end "(and such

corporation shall be treated as an S corporation for such taxable

year for purposes of paragraph (3))".

Subsec. (d)(3)(A). Pub. L. 100-647, Sec. 2004(e)(14)(B), struck

out "or incurred" after "amounts paid".

Subsec. (d)(4). Pub. L. 100-647, Sec. 2004(e)(9), inserted at end

"Notwithstanding the preceding provisions of this paragraph, for

taxable years beginning after 1987, the applicable percentage for

any partnership or S corporation shall be 100 percent if more than

50 percent of such entity's net income for the short taxable year

which would have resulted if the entity had not made an election

under section 444 would have been allocated to partners or

shareholders who would not have been entitled to the benefits of

section 806(e)(2)(C) of the Tax Reform Act of 1986 with respect to

such income."

Subsec. (d)(5). Pub. L. 100-647, Sec. 2004(e)(8), added par. (5).

Subsec. (e)(4). Pub. L. 100-647, Sec. 2004(e)(4)(B), added par.

(4).

Subsec. (g). Pub. L. 100-647, Sec. 2004(e)(6), substituted

"including regulations providing for appropriate adjustments in the

application of this section and sections 280H and 444 in cases

where -

"(1) 2 or more applicable election years begin in the same

calendar year, or

"(2) the base year is a taxable year of less than 12 months"

for "including regulations for annualizing the income and

applicable payments of an entity if the base year is a taxable

year of less than 12 months".

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by Pub. L. 105-34 applicable to taxable years beginning

after Aug. 5, 1997, see section 1281(e) of Pub. L. 105-34, set out

as a note under section 6652 of this title.

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by section 7721(c)(12) of Pub. L. 101-239 applicable to

returns the due date for which (determined without regard to

extensions) is after Dec. 31, 1989, see section 7721(d) of Pub. L.

101-239, set out as a note under section 461 of this title.

Section 7821(b) of Pub. L. 101-239 provided that the amendment

made by that section is effective with respect to taxable years

beginning after 1988.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-647 effective, except as otherwise

provided, as if included in the provisions of the Revenue Act of

1987, Pub. L. 100-203, title X, to which such amendment relates,

see section 2004(u) of Pub. L. 100-647, set out as a note under

section 56 of this title.

EFFECTIVE DATE

Section applicable to applicable election years beginning after

Dec. 31, 1986, see section 10206(d)(2) of Pub. L. 100-203, set out

as a note under section 444 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 444 of this title.

-End-

-CITE-

26 USC Sec. 7520 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7520. Valuation tables

-STATUTE-

(a) General rule

For purposes of this title, the value of any annuity, any

interest for life or a term of years, or any remainder or

reversionary interest shall be determined -

(1) under tables prescribed by the Secretary, and

(2) by using an interest rate (rounded to the nearest 2/10ths

of 1 percent) equal to 120 percent of the Federal midterm rate in

effect under section 1274(d)(1) for the month in which the

valuation date falls.

If an income, estate, or gift tax charitable contribution is

allowable for any part of the property transferred, the taxpayer

may elect to use such Federal midterm rate for either of the 2

months preceding the month in which the valuation date falls for

purposes of paragraph (2). In the case of transfers of more than 1

interest in the same property with respect to which the taxpayer

may use the same rate under paragraph (2), the taxpayer shall use

the same rate with respect to each such interest.

(b) Section not to apply for certain purposes

This section shall not apply for purposes of part I of subchapter

D of chapter 1 or any other provision specified in regulations.

(c) Tables

(1) In general

The tables prescribed by the Secretary for purposes of

subsection (a) shall contain valuation factors for a series of

interest rate categories.

(2) Initial table

Not later than the day 3 months after the date of the enactment

of this section, the Secretary shall prescribe initial tables for

purposes of subsection (a). Such tables may be based on the same

mortality experience as used for purposes of section 2031 on the

date of the enactment of this section.

(3) Revision for recent mortality charges

Not later than December 31, 1989, the Secretary shall revise

the initial tables prescribed for purposes of subsection (a) to

take into account the most recent mortality experience available

as of the time of such revision. Such tables shall be revised not

less frequently than once each 10 years thereafter to take into

account the most recent mortality experience available as of the

time of the revision.

(d) Valuation date

For purposes of this section, the term "valuation date" means the

date as of which the valuation is made.

(e) Tables to include formulas

For purposes of this section, the term "tables" includes

formulas.

-SOURCE-

(Added Pub. L. 100-647, title V, Sec. 5031(a), Nov. 10, 1988, 102

Stat. 3668.)

-REFTEXT-

REFERENCES IN TEXT

The date of the enactment of this section, referred to in subsec.

(c)(2), is the date of enactment of Pub. L. 100-647, which was

approved Nov. 10, 1988.

-COD-

CODIFICATION

Another section 7520 was renumbered section 7521 of this title.

-MISC1-

EFFECTIVE DATE

Section 5031(c) of Pub. L. 100-647 provided that: "The amendments

made by this section [enacting this section] shall apply in cases

where the date as of which the valuation is to be made occurs on or

after the 1st day of the 6th calendar month beginning after the

date of the enactment of this Act [Nov. 10, 1988]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 664, 2702 of this title.

-End-

-CITE-

26 USC Sec. 7521 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7521. Procedures involving taxpayer interviews

-STATUTE-

(a) Recording of interviews

(1) Recording by taxpayer

Any officer or employee of the Internal Revenue Service in

connection with any in-person interview with any taxpayer

relating to the determination or collection of any tax shall,

upon advance request of such taxpayer, allow the taxpayer to make

an audio recording of such interview at the taxpayer's own

expense and with the taxpayer's own equipment.

(2) Recording by IRS officer or employee

An officer or employee of the Internal Revenue Service may

record any interview described in paragraph (1) if such officer

or employee -

(A) informs the taxpayer of such recording prior to the

interview, and

(B) upon request of the taxpayer, provides the taxpayer with

a transcript or copy of such recording but only if the taxpayer

provides reimbursement for the cost of the transcription and

reproduction of such transcript or copy.

(b) Safeguards

(1) Explanations of processes

An officer or employee of the Internal Revenue Service shall

before or at an initial interview provide to the taxpayer -

(A) in the case of an in-person interview with the taxpayer

relating to the determination of any tax, an explanation of the

audit process and the taxpayer's rights under such process, or

(B) in the case of an in-person interview with the taxpayer

relating to the collection of any tax, an explanation of the

collection process and the taxpayer's rights under such

process.

(2) Right of consultation

If the taxpayer clearly states to an officer or employee of the

Internal Revenue Service at any time during any interview (other

than an interview initiated by an administrative summons issued

under subchapter A of chapter 78) that the taxpayer wishes to

consult with an attorney, certified public accountant, enrolled

agent, enrolled actuary, or any other person permitted to

represent the taxpayer before the Internal Revenue Service, such

officer or employee shall suspend such interview regardless of

whether the taxpayer may have answered one or more questions.

(c) Representatives holding power of attorney

Any attorney, certified public accountant, enrolled agent,

enrolled actuary, or any other person permitted to represent the

taxpayer before the Internal Revenue Service who is not disbarred

or suspended from practice before the Internal Revenue Service and

who has a written power of attorney executed by the taxpayer may be

authorized by such taxpayer to represent the taxpayer in any

interview described in subsection (a). An officer or employee of

the Internal Revenue Service may not require a taxpayer to

accompany the representative in the absence of an administrative

summons issued to the taxpayer under subchapter A of chapter 78.

Such an officer or employee, with the consent of the immediate

supervisor of such officer or employee, may notify the taxpayer

directly that such officer or employee believes such representative

is responsible for unreasonable delay or hindrance of an Internal

Revenue Service examination or investigation of the taxpayer.

(d) Section not to apply to certain investigations

This section shall not apply to criminal investigations or

investigations relating to the integrity of any officer or employee

of the Internal Revenue Service.

-SOURCE-

(Added Pub. L. 100-647, title VI, Sec. 6228(a), Nov. 10, 1988, 102

Stat. 3731, Sec. 7520; renumbered Sec. 7521, Pub. L. 101-239, title

VII, Sec. 7816(u)(1), Dec. 19, 1989, 103 Stat. 2423.)

-COD-

CODIFICATION

Another section 7521 was renumbered section 7522 of this title.

-MISC1-

EFFECTIVE DATE

Section 6228(d) of Pub. L. 100-647 provided that: "The amendments

made by subsections (a) and (c) [enacting this section] shall apply

to interviews conducted on or after the date which is 90 days after

the date of the enactment of this Act [Nov. 10, 1988]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7803 of this title.

-End-

-CITE-

26 USC Sec. 7522 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7522. Content of tax due, deficiency, and other notices

-STATUTE-

(a) General rule

Any notice to which this section applies shall describe the basis

for, and identify the amounts (if any) of, the tax due, interest,

additional amounts, additions to the tax, and assessable penalties

included in such notice. An inadequate description under the

preceding sentence shall not invalidate such notice.

(b) Notices to which section applies

This section shall apply to -

(1) any tax due notice or deficiency notice described in

section 6155, 6212, or 6303,

(2) any notice generated out of any information return matching

program, and

(3) the 1st letter of proposed deficiency which allows the

taxpayer an opportunity for administrative review in the Internal

Revenue Service Office of Appeals.

-SOURCE-

(Added Pub. L. 100-647, title VI, Sec. 6233(a), Nov. 10, 1988, 102

Stat. 3735, Sec. 7521; renumbered Sec. 7522, Pub. L. 101-508, title

XI, Sec. 11704(a)(30), Nov. 5, 1990, 104 Stat. 1388-519.)

-MISC1-

EFFECTIVE DATE

Section 6233(c) of Pub. L. 100-647 provided that: "The amendments

made by this section [enacting this section] shall apply to

mailings made on or after January 1, 1990."

-End-

-CITE-

26 USC Sec. 7523 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7523. Graphic presentation of major categories of Federal

outlays and income

-STATUTE-

(a) General rule

In the case of any booklet of instructions for Form 1040, 1040A,

or 1040EZ prepared by the Secretary for filing individual income

tax returns for taxable years beginning in any calendar year, the

Secretary shall include in a prominent place -

(1) a pie-shaped graph showing the relative sizes of the major

outlay categories, and

(2) a pie-shaped graph showing the relative sizes of the major

income categories.

(b) Definitions and special rules

For purposes of subsection (a) -

(1) Major outlay categories

The term "major outlay categories" means the following:

(A) Defense, veterans, and foreign affairs.

(B) Social security, medicare, and other retirement.

(C) Physical, human, and community development.

(D) Social programs.

(E) Law enforcement and general government.

(F) Interest on the debt.

(2) Major income categories

The term "major income categories" means the following:

(A) Social security, medicare, and unemployment and other

retirement taxes.

(B) Personal income taxes.

(C) Corporate income taxes.

(D) Borrowing to cover the deficit.

(E) Excise, customs, estate, gift, and miscellaneous taxes.

(3) Required footnotes

The pie-shaped graph showing the major outlay categories shall

include the following footnotes:

(A) A footnote to the category referred to in paragraph

(1)(A) showing the percentage of the total outlays which is for

defense, the percentage of total outlays which is for veterans,

and the percentage of total outlays which is for foreign

affairs.

(B) A footnote to the category referred to in paragraph

(1)(C) showing that such category consists of agriculture,

natural resources, environment, transportation, education, job

training, economic development, space, energy, and general

science.

(C) A footnote to the category referred to in paragraph

(1)(D) showing the percentage of the total outlays which is for

medicaid, food stamps, and assistance under a State program

funded under part A of title IV of the Social Security Act and

the percentage of total outlays which is for public health,

unemployment, assisted housing, and social services.

(4) Data on which graphs are based

The graphs required under subsection (a) shall be based on data

for the most recent fiscal year for which complete data is

available as of the completion of the preparation of the

instructions by the Secretary.

-SOURCE-

(Added Pub. L. 101-508, title XI, Sec. 11622(a), Nov. 5, 1990, 104

Stat. 1388-504; amended Pub. L. 104-193, title I, Sec. 110(l)(4),

formerly Sec. 110(l)(8), Aug. 22, 1996, 110 Stat. 2173, renumbered

Pub. L. 105-33, title V, Sec. 5514(a)(2), Aug. 5, 1997, 111 Stat.

620.)

-REFTEXT-

REFERENCES IN TEXT

The Social Security Act, referred to in subsec. (b)(3)(C), is act

Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Part A of title

IV of the Act is classified generally to part A (Sec. 601 et seq.)

of subchapter IV of chapter 7 of Title 42, The Public Health and

Welfare. For complete classification of this Act to the Code, see

section 1305 of Title 42 and Tables.

-MISC1-

AMENDMENTS

1996 - Subsec. (b)(3)(C). Pub. L. 104-193, Sec. 110(l)(4),

formerly Sec. 110(l)(8), as renumbered by Pub. L. 105-33,

substituted "assistance under a State program funded under part A

of title IV of the Social Security Act" for "aid to families with

dependent children".

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-193 effective July 1, 1997, with

transition rules relating to State options to accelerate such date,

rules relating to claims, actions, and proceedings commenced before

such date, rules relating to closing out of accounts for terminated

or substantially modified programs and continuance in office of

Assistant Secretary for Family Support, and provisions relating to

termination of entitlement under AFDC program, see section 116 of

Pub. L. 104-193, as amended, set out as an Effective Date note

under section 601 of Title 42, The Public Health and Welfare.

EFFECTIVE DATE

Section 11622(c) of Pub. L. 101-508 provided that: "The

amendments made by this section [enacting this section] shall apply

to instructions prepared for taxable years beginning after 1990."

-End-

-CITE-

26 USC Sec. 7524 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7524. Annual notice of tax delinquency

-STATUTE-

Not less often than annually, the Secretary shall send a written

notice to each taxpayer who has a tax delinquent account of the

amount of the tax delinquency as of the date of the notice.

-SOURCE-

(Added Pub. L. 104-168, title XII, Sec. 1204(a), July 30, 1996, 110

Stat. 1471.)

-MISC1-

EFFECTIVE DATE

Section 1204(c) of Pub. L. 104-168 provided that: "The amendments

made by this section [enacting this section] shall apply to

calendar years after 1996."

-End-

-CITE-

26 USC Sec. 7525 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7525. Confidentiality privileges relating to taxpayer

communications

-STATUTE-

(a) Uniform application to taxpayer communications with federally

authorized practitioners

(1) General rule

With respect to tax advice, the same common law protections of

confidentiality which apply to a communication between a taxpayer

and an attorney shall also apply to a communication between a

taxpayer and any federally authorized tax practitioner to the

extent the communication would be considered a privileged

communication if it were between a taxpayer and an attorney.

(2) Limitations

Paragraph (1) may only be asserted in -

(A) any noncriminal tax matter before the Internal Revenue

Service; and

(B) any noncriminal tax proceeding in Federal court brought

by or against the United States.

(3) Definitions

For purposes of this subsection -

(A) Federally authorized tax practitioner

The term "federally authorized tax practitioner" means any

individual who is authorized under Federal law to practice

before the Internal Revenue Service if such practice is subject

to Federal regulation under section 330 of title 31, United

States Code.

(B) Tax advice

The term "tax advice" means advice given by an individual

with respect to a matter which is within the scope of the

individual's authority to practice described in subparagraph

(A).

(b) Section not to apply to communications regarding corporate tax

shelters

The privilege under subsection (a) shall not apply to any written

communication between a federally authorized tax practitioner and a

director, shareholder, officer, or employee, agent, or

representative of a corporation in connection with the promotion of

the direct or indirect participation of such corporation in any tax

shelter (as defined in section 6662(d)(2)(C)(iii)).

-SOURCE-

(Added Pub. L. 105-206, title III, Sec. 3411(a), July 22, 1998, 112

Stat. 750.)

-MISC1-

EFFECTIVE DATE

Pub. L. 105-206, title III, Sec. 3411(c), July 22, 1998, 112

Stat. 751, provided that: "The amendments made by this section

[enacting this section] shall apply to communications made on or

after the date of the enactment of this Act [July 22, 1998]."

-End-

-CITE-

26 USC Sec. 7526 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7526. Low-income taxpayer clinics

-STATUTE-

(a) In general

The Secretary may, subject to the availability of appropriated

funds, make grants to provide matching funds for the development,

expansion, or continuation of qualified low-income taxpayer

clinics.

(b) Definitions

For purposes of this section -

(1) Qualified low-income taxpayer clinic

(A) In general

The term "qualified low-income taxpayer clinic" means a

clinic that -

(i) does not charge more than a nominal fee for its

services (except for reimbursement of actual costs incurred);

and

(ii)(I) represents low-income taxpayers in controversies

with the Internal Revenue Service; or

(II) operates programs to inform individuals for whom

English is a second language about their rights and

responsibilities under this title.

(B) Representation of low-income taxpayers

A clinic meets the requirements of subparagraph (A)(ii)(I) if

-

(i) at least 90 percent of the taxpayers represented by the

clinic have incomes which do not exceed 250 percent of the

poverty level, as determined in accordance with criteria

established by the Director of the Office of Management and

Budget; and

(ii) the amount in controversy for any taxable year

generally does not exceed the amount specified in section

7463.

(2) Clinic

The term "clinic" includes -

(A) a clinical program at an accredited law, business, or

accounting school in which students represent low-income

taxpayers in controversies arising under this title; and

(B) an organization described in section 501(c) and exempt

from tax under section 501(a) which satisfies the requirements

of paragraph (1) through representation of taxpayers or

referral of taxpayers to qualified representatives.

(3) Qualified representative

The term "qualified representative" means any individual

(whether or not an attorney) who is authorized to practice before

the Internal Revenue Service or the applicable court.

(c) Special rules and limitations

(1) Aggregate limitation

Unless otherwise provided by specific appropriation, the

Secretary shall not allocate more than $6,000,000 per year

(exclusive of costs of administering the program) to grants under

this section.

(2) Limitation on annual grants to a clinic

The aggregate amount of grants which may be made under this

section to a clinic for a year shall not exceed $100,000.

(3) Multi-year grants

Upon application of a qualified low-income taxpayer clinic, the

Secretary is authorized to award a multi-year grant not to exceed

3 years.

(4) Criteria for awards

In determining whether to make a grant under this section, the

Secretary shall consider -

(A) the numbers of taxpayers who will be served by the

clinic, including the number of taxpayers in the geographical

area for whom English is a second language;

(B) the existence of other low-income taxpayer clinics

serving the same population;

(C) the quality of the program offered by the low-income

taxpayer clinic, including the qualifications of its

administrators and qualified representatives, and its record,

if any, in providing service to low-income taxpayers; and

(D) alternative funding sources available to the clinic,

including amounts received from other grants and contributions,

and the endowment and resources of the institution sponsoring

the clinic.

(5) Requirement of matching funds

A low-income taxpayer clinic must provide matching funds on a

dollar-for-dollar basis for all grants provided under this

section. Matching funds may include -

(A) the salary (including fringe benefits) of individuals

performing services for the clinic; and

(B) the cost of equipment used in the clinic.

Indirect expenses, including general overhead of the institution

sponsoring the clinic, shall not be counted as matching funds.

-SOURCE-

(Added Pub. L. 105-206, title III, Sec. 3601(a), July 22, 1998, 112

Stat. 774.)

-MISC1-

EFFECTIVE DATE

Pub. L. 105-206, title III, Sec. 3601(c), July 22, 1998, 112

Stat. 776, provided that: "The amendments made by this section

[enacting this section] shall take effect on the date of the

enactment of this Act [July 22, 1998]."

-End-

-CITE-

26 USC Sec. 7527 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 77 - MISCELLANEOUS PROVISIONS

-HEAD-

Sec. 7527. Advance payment of credit for health insurance costs of

eligible individuals

-STATUTE-

(a) General rule

Not later than August 1, 2003, the Secretary shall establish a

program for making payments on behalf of certified individuals to

providers of qualified health insurance (as defined in section

35(e)) for such individuals.

(b) Limitation on advance payments during any taxable year

The Secretary may make payments under subsection (a) only to the

extent that the total amount of such payments made on behalf of any

individual during the taxable year does not exceed 65 percent of

the amount paid by the taxpayer for coverage of the taxpayer and

qualifying family members under qualified health insurance for

eligible coverage months beginning in the taxable year.

(c) Certified individual

For purposes of this section, the term "certified individual"

means any individual for whom a qualified health insurance costs

credit eligibility certificate is in effect.

(d) Qualified health insurance costs credit eligibility certificate

For purposes of this section, the term "qualified health

insurance costs credit eligibility certificate" means any written

statement that an individual is an eligible individual (as defined

in section 35(c)) if such statement provides such information as

the Secretary may require for purposes of this section and -

(1) in the case of an eligible TAA recipient (as defined in

section 35(c)(2)) or an eligible alternative TAA recipient (as

defined in section 35(c)(3)), is certified by the Secretary of

Labor (or by any other person or entity designated by the

Secretary), or

(2) in the case of an eligible PBGC pension recipient (as

defined in section 35(c)(4)), is certified by the Pension Benefit

Guaranty Corporation (or by any other person or entity designated

by the Secretary).

-SOURCE-

(Added Pub. L. 107-210, div. A, title II, Sec. 202(a), Aug. 6,

2002, 116 Stat. 960.)

-MISC1-

CONSTRUCTION

Nothing in the amendments made by title II of Pub. L. 107-210,

other than provisions relating to COBRA continuation coverage and

reporting requirements, to be construed as creating a new mandate

on any party regarding health insurance coverage, see section

203(f) of Pub. L. 107-210, set out as a Construction of 2002

Amendment note under section 2918 of Title 29, Labor.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 35, 6050T, 6103 of this

title; title 29 section 2918.

-End-