US (United States) Code. Title 26. Subtitle F: Procedure and Administration. Chapter 78: Discovery of liability

Codificación normativa de EEUU (Estados Unidos) Legislación Federal estadounidense # Internal revenue code. Enforcement of title

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-CITE-

26 USC CHAPTER 78 - DISCOVERY OF LIABILITY AND

ENFORCEMENT OF TITLE 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

-HEAD-

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

-MISC1-

Subchapter Sec.(!1)

A. Examination and inspection 7601

B. General powers and duties 7621

[C. Repealed.]

D. Possessions 7651

AMENDMENTS

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

Stat. 1834, struck out subchapter C relating to supervision of

operations of certain manufacturers.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 7801, 7811, 7851 of this

title.

-FOOTNOTE-

(!1) Section numbers editorially supplied.

-End-

-CITE-

26 USC Subchapter A - Examination and Inspection 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

SUBCHAPTER A - EXAMINATION AND INSPECTION

-MISC1-

Sec.

7601. Canvass of districts for taxable persons and objects.

7602. Examination of books and witnesses.

7603. Service of summons.

7604. Enforcement of summons.

7605. Time and place of examination.

7606. Entry of premises for examination of taxable objects.

[7607. Repealed.]

7608. Authority of internal revenue enforcement officers.

7609. Special procedures for third-party summonses.

7610. Fees and costs for witnesses.

7611. Restrictions on church tax inquiries and examinations.

7612. Special procedures for summonses for computer

software.

7613. Cross references.

AMENDMENTS

1998 - Pub. L. 105-206, title III, Sec. 3413(d), July 22, 1998,

112 Stat. 754, added items 7612 and 7613 and struck out former item

7612 "Cross references".

1984 - Pub. L. 98-573, title II, Sec. 213(b)(2), Oct. 30, 1984,

98 Stat. 2988, struck out item 7607 "Additional authority for

Bureau of Customs".

Pub. L. 98-369, div. A, title X, Sec. 1033(c)(2), July 18, 1984,

98 Stat. 1039, added item 7611 and redesignated former item 7611 as

7612.

1976 - Pub. L. 94-455, title XII, Sec. 1205(b), Oct. 4, 1976, 90

Stat. 1702, substituted "Special procedures for third-party

summonses" for "Cross references" in item 7609 and added items 7610

and 7611.

1970 - Pub. L. 91-513, title III, Sec. 1102(g)(2), Oct. 27, 1970,

84 Stat. 1293, struck out "Bureau of Narcotics and" before "Bureau

of Customs" in item 7607.

1958 - Pub. L. 85-859, title II, Sec. 204(16), Sept. 2, 1958, 72

Stat. 1430, added item 7608 and redesignated former item 7608 as

7609.

1956 - Act July 18, 1956, ch. 629, Sec. 104(b), 70 Stat. 570,

added item 7607 and redesignated former item 7607 as 7608.

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in sections 274, 7521 of this

title.

-End-

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26 USC Sec. 7601 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7601. Canvass of districts for taxable persons and objects

-STATUTE-

(a) General rule

The Secretary shall, to the extent he deems it practicable, cause

officers or employees of the Treasury Department to proceed, from

time to time, through each internal revenue district and inquire

after and concerning all persons therein who may be liable to pay

any internal revenue tax, and all persons owning or having the care

and management of any objects with respect to which any tax is

imposed.

(b) Penalties

For penalties applicable to forcible obstruction or hindrance

of Treasury officers or employees in the performance of their

duties, see section 7212.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 901; 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 7609 of this title.

-End-

-CITE-

26 USC Sec. 7602 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7602. Examination of books and witnesses

-STATUTE-

(a) Authority to summon, etc.

For the purpose of ascertaining the correctness of any return,

making a return where none has been made, determining the liability

of any person for any internal revenue tax or the liability at law

or in equity of any transferee or fiduciary of any person in

respect of any internal revenue tax, or collecting any such

liability, the Secretary is authorized -

(1) To examine any books, papers, records, or other data which

may be relevant or material to such inquiry;

(2) To summon the person liable for tax or required to perform

the act, or any officer or employee of such person, or any person

having possession, custody, or care of books of account

containing entries relating to the business of the person liable

for tax or required to perform the act, or any other person the

Secretary may deem proper, to appear before the Secretary at a

time and place named in the summons and to produce such books,

papers, records, or other data, and to give such testimony, under

oath, as may be relevant or material to such inquiry; and

(3) To take such testimony of the person concerned, under oath,

as may be relevant or material to such inquiry.

(b) Purpose may include inquiry into offense

The purposes for which the Secretary may take any action

described in paragraph (1), (2), or (3) of subsection (a) include

the purpose of inquiring into any offense connected with the

administration or enforcement of the internal revenue laws.

(c) Notice of contact of third parties

(1) General notice

An officer or employee of the Internal Revenue Service may not

contact any person other than the taxpayer with respect to the

determination or collection of the tax liability of such taxpayer

without providing reasonable notice in advance to the taxpayer

that contacts with persons other than the taxpayer may be made.

(2) Notice of specific contacts

The Secretary shall periodically provide to a taxpayer a record

of persons contacted during such period by the Secretary with

respect to the determination or collection of the tax liability

of such taxpayer. Such record shall also be provided upon request

of the taxpayer.

(3) Exceptions

This subsection shall not apply -

(A) to any contact which the taxpayer has authorized;

(B) if the Secretary determines for good cause shown that

such notice would jeopardize collection of any tax or such

notice may involve reprisal against any person; or

(C) with respect to any pending criminal investigation.

(d) No administrative summons when there is Justice Department

referral

(1) Limitation of authority

No summons may be issued under this title, and the Secretary

may not begin any action under section 7604 to enforce any

summons, with respect to any person if a Justice Department

referral is in effect with respect to such person.

(2) Justice Department referral in effect

For purposes of this subsection -

(A) In general

A Justice Department referral is in effect with respect to

any person if -

(i) the Secretary has recommended to the Attorney General a

grand jury investigation of, or the criminal prosecution of,

such person for any offense connected with the administration

or enforcement of the internal revenue laws, or

(ii) any request is made under section 6103(h)(3)(B) for

the disclosure of any return or return information (within

the meaning of section 6103(b)) relating to such person.

(B) Termination

A Justice Department referral shall cease to be in effect

with respect to a person when -

(i) the Attorney General notifies the Secretary, in

writing, that -

(I) he will not prosecute such person for any offense

connected with the administration or enforcement of the

internal revenue laws,

(II) he will not authorize a grand jury investigation of

such person with respect to such an offense, or

(III) he will discontinue such a grand jury

investigation,

(ii) a final disposition has been made of any criminal

proceeding pertaining to the enforcement of the internal

revenue laws which was instituted by the Attorney General

against such person, or

(iii) the Attorney General notifies the Secretary, in

writing, that he will not prosecute such person for any

offense connected with the administration or enforcement of

the internal revenue laws relating to the request described

in subparagraph (A)(ii).

(3) Taxable years, etc., treated separately

For purposes of this subsection, each taxable period (or, if

there is no taxable period, each taxable event) and each tax

imposed by a separate chapter of this title shall be treated

separately.

(e) Limitation on examination on unreported income

The Secretary shall not use financial status or economic reality

examination techniques to determine the existence of unreported

income of any taxpayer unless the Secretary has a reasonable

indication that there is a likelihood of such unreported income.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 901; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97-248,

title III, Sec. 333(a), Sept. 3, 1982, 96 Stat. 622; Pub. L.

105-206, title III, Secs. 3412, 3417(a), July 22, 1998, 112 Stat.

751, 757.)

-MISC1-

AMENDMENTS

1998 - Subsec. (c). Pub. L. 105-206, Sec. 3417(a), added subsec.

(c). Former subsec. (c) redesignated (d).

Subsec. (d). Pub. L. 105-206, Sec. 3417(a), redesignated subsec.

(c) as (d). Former subsec. (d) redesignated (e).

Pub. L. 105-206, Sec. 3412, added subsec. (d).

Subsec. (e). Pub. L. 105-206, Sec. 3417(a), redesignated subsec.

(d) as (e).

1982 - Pub. L. 97-248 redesignated existing provisions as subsec.

(a), added subsec. (a) heading, and added subsecs. (b) and (c).

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

"Secretary" wherever appearing.

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3417(b), July 22, 1998, 112

Stat. 758, provided that: "The amendments made by subsection (a)

[amending this section] shall apply to contacts made after the

180th day after the date of the enactment of this Act [July 22,

1998]."

EFFECTIVE DATE OF 1982 AMENDMENT

Section 333(b) of Pub. L. 97-248 provided that: "The amendments

made by subsection (a) [amending this section] shall take effect on

the day after the date of the enactment of this Act [Sept. 3,

1982]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4424, 6038A, 6038C, 6048,

6230, 6420, 6421, 6427, 7210, 7603, 7604, 7605, 7609, 7610 of this

title.

-End-

-CITE-

26 USC Sec. 7603 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7603. Service of summons

-STATUTE-

(a) In general

A summons issued under section 6420(e)(2), 6421(g)(2),

6427(j)(2), or 7602 shall be served by the Secretary, by an

attested copy delivered in hand to the person to whom it is

directed, or left at his last and usual place of abode; and the

certificate of service signed by the person serving the summons

shall be evidence of the facts it states on the hearing of an

application for the enforcement of the summons. When the summons

requires the production of books, papers, records, or other data,

it shall be sufficient if such books, papers, records, or other

data are described with reasonable certainty.

(b) Service by mail to third-party recordkeepers

(1) In general

A summons referred to in subsection (a) for the production of

books, papers, records, or other data by a third-party

recordkeeper may also be served by certified or registered mail

to the last known address of such recordkeeper.

(2) Third-party recordkeeper

For purposes of paragraph (1), the term "third-party

recordkeeper" means -

(A) any mutual savings bank, cooperative bank, domestic

building and loan association, or other savings institution

chartered and supervised as a savings and loan or similar

association under Federal or State law, any bank (as defined in

section 581), or any credit union (within the meaning of

section 501(c)(14)(A)),

(B) any consumer reporting agency (as defined under section

603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f))),

(C) any person extending credit through the use of credit

cards or similar devices,

(D) any broker (as defined in section 3(a)(4) of the

Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4))),

(E) any attorney,

(F) any accountant,

(G) any barter exchange (as defined in section 6045(c)(3)),

(H) any regulated investment company (as defined in section

851) and any agent of such regulated investment company when

acting as an agent thereof,

(I) any enrolled agent, and

(J) any owner or developer of a computer software source code

(as defined in section 7612(d)(2)).

Subparagraph (J) shall apply only with respect to a summons

requiring the production of the source code referred to in

subparagraph (J) or the program and data described in section

7612(b)(1)(A)(ii) to which such source code relates.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 902; Apr. 2, 1956, ch. 160, Sec.

4(i), 70 Stat. 91; June 29, 1956, ch. 462, title II, Sec.

208(d)(4), 70 Stat. 396; Pub. L. 89-44, title II, Sec. 202(c)(4),

June 21, 1965, 79 Stat. 139; Pub. L. 91-258, title II, Sec.

207(d)(9), May 21, 1970, 84 Stat. 249; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 94-530,

Sec. 1(c)(6), Oct. 17, 1976, 90 Stat. 2488; Pub. L. 95-599, title

V, Sec. 505(c)(5), Nov. 6, 1978, 92 Stat. 2760; Pub. L. 96-223,

title II, Sec. 232(d)(4)(E), Apr. 2, 1980, 94 Stat. 278; Pub. L.

97-424, title V, Sec. 515(b)(12), Jan. 6, 1983, 96 Stat. 2182; Pub.

L. 98-369, div. A, title IX, Sec. 911(d)(2)(G), July 18, 1984, 98

Stat. 1007; Pub. L. 99-514, title XVII, Sec. 1703(e)(2)(G), Oct.

22, 1986, 100 Stat. 2778; Pub. L. 100-647, title I, Sec.

1017(c)(9), (12), Nov. 10, 1988, 102 Stat. 3576, 3577; Pub. L.

105-206, title III, Secs. 3413(c), 3416(a), July 22, 1998, 112

Stat. 754, 756; Pub. L. 106-554, Sec. 1(a)(7) [title III, Sec.

319(26)], Dec. 21, 2000, 114 Stat. 2763, 2763A-648.)

-MISC1-

AMENDMENTS

2000 - Subsec. (b)(2)(A) to (G). Pub. L. 106-554 substituted a

comma for semicolon at end.

1998 - Subsec. (a). Pub. L. 105-206, Sec. 3416(a), designated

existing provisions as subsec. (a) and inserted heading.

Subsec. (b). Pub. L. 105-206, Sec. 3416(a), added subsec. (b).

Subsec. (b)(2). Pub. L. 105-206, Sec. 3413(c), added subpar. (J)

and concluding provisions.

1988 - Pub. L. 100-647, Sec. 1017(c)(12), made technical

correction to language of Pub. L. 99-514, Sec. 1703(e)(2)(G), see

1986 Amendment note below.

Pub. L. 100-647, Sec. 1017(c)(9), substituted "6421(g)(2)" for

"6421(f)(2)".

1986 - Pub. L. 99-514, as amended by Pub. L. 100-647, Sec.

1017(c)(12), substituted "6427(j)(2)" for "6427(i)(2)".

1984 - Pub. L. 98-369 substituted "6427(i)(2)" for "6427(h)(2)".

1983 - Pub. L. 97-424 struck out "6424(d)(2)," after

"6421(f)(2),".

1980 - Pub. L. 96-223 substituted "6427(h)(2)" for "6427(g)(2)".

1978 - Pub. L. 95-599 substituted "6427(g)(2)" for "6427(f)(2)".

1976 - Pub. L. 94-530 substituted "6427(f)(2)" for "6427(e)(2)".

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

1970 - Pub. L. 91-258 inserted reference to section 6427(e)(2).

1965 - Pub. L. 89-44 inserted reference to section 6424(d)(2).

1956 - Act June 29, 1956, inserted reference to section

6421(f)(2).

Act Apr. 2, 1956, inserted reference to section 6420(e)(2).

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by section 3413(c) of Pub. L. 105-206 applicable to

summonses issued, and software acquired, after July 22, 1998, see

section 3413(e)(1) of Pub. L. 105-206, set out as an Effective Date

note under section 7612 of this title.

Pub. L. 105-206, title III, Sec. 3416(b), July 22, 1998, 112

Stat. 757, provided that: "The amendment made by this section

[amending this section] shall apply to summonses served after the

date of the enactment of this Act [July 22, 1998]."

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 OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 applicable to gasoline removed (as

defined in section 4082 of this title as amended by section 1703 of

Pub. L. 99-514) after Dec. 31, 1987, see section 1703(h) of Pub. L.

99-514, set out as a note under section 4081 of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 effective Aug. 1, 1984, see section

911(e) of Pub. L. 98-369, set out as a note under section 6427 of

this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 97-424 applicable with respect to articles

sold after Jan. 6, 1983, see section 515(c) of Pub. L. 97-424, set

out as a note under section 34 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-223 effective Jan. 1, 1979, see section

232(h)(2) of Pub. L. 96-223, set out as a note under section 6427

of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-599 effective Jan. 1, 1979, see section

505(d) of Pub. L. 95-599, set out as a note under section 6427 of

this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-530 effective Oct. 1, 1976, see section

1(d) of Pub. L. 94-530, set out as a note under section 4041 of

this title.

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-258 effective July 1, 1970, see section

211(a) of Pub. L. 91-258, set out as a note under section 4041 of

this title.

EFFECTIVE DATE OF 1965 AMENDMENT

Amendment by Pub. L. 89-44 effective Jan. 1, 1966, see section

701(a)(1), (2), of Pub. L. 89-44, set out as a note under section

4161 of this title.

EFFECTIVE DATE OF 1956 AMENDMENT

Amendment by act June 29, 1956, effective June 29, 1956, see

section 211 of act June 29, 1956, set out as a note under section

4041 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6038A, 6038C, 6048, 7210,

7604, 7609 of this title.

-End-

-CITE-

26 USC Sec. 7604 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7604. Enforcement of summons

-STATUTE-

(a) Jurisdiction of district court

If any person is summoned under the internal revenue laws to

appear, to testify, or to produce books, papers, records, or other

data, the United States district court for the district in which

such person resides or is found shall have jurisdiction by

appropriate process to compel such attendance, testimony, or

production of books, papers, records, or other data.

(b) Enforcement

Whenever any person summoned under section 6420(e)(2),

6421(g)(2), 6427(j)(2), or 7602 neglects or refuses to obey such

summons, or to produce books, papers, records, or other data, or to

give testimony, as required, the Secretary may apply to the judge

of the district court or to a United States magistrate judge for

the district within which the person so summoned resides or is

found for an attachment against him as for a contempt. It shall be

the duty of the judge or magistrate judge to hear the application,

and, if satisfactory proof is made, to issue an attachment,

directed to some proper officer, for the arrest of such person, and

upon his being brought before him to proceed to a hearing of the

case; and upon such hearing the judge or the United States

magistrate judge shall have power to make such order as he shall

deem proper, not inconsistent with the law for the punishment of

contempts, to enforce obedience to the requirements of the summons

and to punish such person for his default or disobedience.

(c) Cross references

(1) Authority to issue orders, processes, and judgments

For authority of district courts generally to enforce the

provisions of this title, see section 7402.

(2) Penalties

For penalties applicable to violation of section 6420(e)(2),

6421(g)(2), 6427(j)(2), or 7602, see section 7210.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 902; Apr. 2, 1956, ch. 160, Sec.

4(i), 70 Stat. 91; June 29, 1956, ch. 462, title II, Sec.

208(d)(4), 70 Stat. 396; Pub. L. 89-44, title II, Sec. 202(c)(4),

June 21, 1965, 79 Stat. 139; Pub. L. 90-578, title IV, Sec.

402(b)(2), Oct. 17, 1968, 82 Stat. 1118; Pub. L. 91-258, title II,

Sec. 207(d)(9), May 21, 1970, 84 Stat. 249; Pub. L. 94-455, title

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

94-530, Sec. 1(c)(6), Oct. 17, 1976, 90 Stat. 2488; Pub. L. 95-599,

title V, Sec. 505(c)(5), (6), Nov. 6, 1978, 92 Stat. 2760; Pub. L.

96-223, title II, Sec. 232(d)(4)(E), Apr. 2, 1980, 94 Stat. 278;

Pub. L. 97-424, title V, Sec. 515(b)(12), Jan. 6, 1983, 96 Stat.

2182; Pub. L. 98-369, div. A, title IX, Sec. 911(d)(2)(G), July 18,

1984, 98 Stat. 1007; Pub. L. 99-514, title XVII, Sec.

1703(e)(2)(G), Oct. 22, 1986, 100 Stat. 2778; Pub. L. 100-647,

title I, Sec. 1017(c)(9), (12), Nov. 10, 1988, 102 Stat. 3576,

3577; Pub. L. 101-650, title III, Sec. 321, Dec. 1, 1990, 104 Stat.

5117.)

-MISC1-

AMENDMENTS

1988 - Subsecs. (b), (c)(2). Pub. L. 100-647, Sec. 1017(c)(12),

made technical correction to language of Pub. L. 99-514, Sec.

1703(e)(2)(G), see 1986 Amendment note below.

Pub. L. 100-647, Sec. 1017(c)(9), substituted "6421(g)(2)" for

"6421(f)(2)".

1986 - Subsecs. (b), (c)(2). Pub. L. 99-514, as amended by Pub.

L. 100-647, Sec. 1017(c)(12), substituted "6427(j)(2)" for

"6427(i)(2)".

1984 - Subsecs. (b), (c)(2). Pub. L. 98-369 substituted

"6427(i)(2)" for "6427(h)(2)".

1983 - Subsecs. (b), (c)(2). Pub. L. 97-424 struck out

"6424(d)(2)," after "6421(f)(2),".

1980 - Subsecs. (b), (c)(2). Pub. L. 96-223 substituted

"6427(h)(2)" for "6427(g)(2)".

1978 - Subsec. (b). Pub. L. 95-599, Sec. 505(c)(5), substituted

"6427(g)(2)" for "6427(f)(2)".

Subsec. (c)(2). Pub. L. 95-599, Sec. 505(c)(6), substituted

"6427(g)(2)" for "6427(e)(2)".

1976 - Subsec. (b). Pub. L. 94-530 substituted "6427(f)(2)" for

"6427(e)(2)".

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

1970 - Subsecs. (b), (c). Pub. L. 91-258 inserted references to

section 6427(e)(2).

1965 - Subsecs. (b), (c). Pub. L. 89-44 inserted references to

section 6424(d)(2).

1956 - Subsecs. (b), (c). Act Apr. 2, 1956, inserted references

to section 6420(e)(2).

Act June 29, 1956, inserted references to section 6421(f)(2).

-CHANGE-

CHANGE OF NAME

"United States magistrate judge" and "magistrate judge"

substituted for "United States magistrate" and "magistrate",

respectively, wherever appearing in subsec. (b) pursuant to section

321 of Pub. L. 101-650, set out as a note under section 631 of

Title 28, Judiciary and Judicial Procedure. Previously, "United

States magistrate" and "magistrate" substituted for "United States

commissioner" and "commissioner", respectively, pursuant to Pub. L.

90-578. See chapter 43 (Sec. 631 et seq.) of Title 28.

-MISC2-

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 OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 applicable to gasoline removed (as

defined in section 4082 of this title as amended by section 1703 of

Pub. L. 99-514) after Dec. 31, 1987, see section 1703(h) of Pub. L.

99-514, set out as a note under section 4081 of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 effective Aug. 1, 1984, see section

911(e) of Pub. L. 98-369, set out as a note under section 6427 of

this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 97-424 applicable with respect to articles

sold after Jan. 6, 1983, see section 515(c) of Pub. L. 97-424, set

out as a note under section 34 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-223 effective Jan. 1, 1979, see section

232(h)(2) of Pub. L. 96-223, set out as a note under section 6427

of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-599 effective Jan. 1, 1979, see section

505(d) of Pub. L. 95-599, set out as a note under section 6427 of

this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-530 effective Oct. 1, 1976, see section

1(d) of Pub. L. 94-530, set out as a note under section 4041 of

this title.

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-258 effective July 1, 1970, see section

211(a) of Pub. L. 91-258, set out as a note under section 4041 of

this title.

EFFECTIVE DATE OF 1965 AMENDMENT

Amendment by Pub. L. 89-44 effective Jan. 1, 1966, see section

701(a)(1), (2), of Pub. L. 89-44, set out as a note under section

4161 of this title.

EFFECTIVE DATE OF 1956 AMENDMENT

Amendment by act June 29, 1956, effective June 29, 1956, see

section 211 of act June 29, 1956, set out as a note under section

4041 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6038A, 6038C, 6048, 7210,

7602, 7609, 7612 of this title.

-End-

-CITE-

26 USC Sec. 7605 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7605. Time and place of examination

-STATUTE-

(a) Time and place

The time and place of examination pursuant to the provisions of

section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602 shall be such

time and place as may be fixed by the Secretary and as are

reasonable under the circumstances. In the case of a summons under

authority of paragraph (2) of section 7602, or under the

corresponding authority of section 6420(e)(2), 6421(g)(2), or

6427(j)(2), the date fixed for appearance before the Secretary

shall not be less than 10 days from the date of the summons.

(b) Restrictions on examination of taxpayer

No taxpayer shall be subjected to unnecessary examination or

investigations, and only one inspection of a taxpayer's books of

account shall be made for each taxable year unless the taxpayer

requests otherwise or unless the Secretary, after investigation,

notifies the taxpayer in writing that an additional inspection is

necessary.

(c) Cross reference

For provisions restricting church tax inquiries and

examinations, see section 7611.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 902; Apr. 2, 1956, ch. 160, Sec.

4(i), 70 Stat. 91; June 29, 1956, ch. 462, title II, Sec.

208(d)(4), 70 Stat. 396; Pub. L. 89-44, title II, Sec. 202(c)(4),

June 21, 1965, 79 Stat. 139; Pub. L. 91-172, title I, Sec. 121(f),

Dec. 30, 1969, 83 Stat. 548; Pub. L. 91-258, title II, Sec.

207(d)(9), May 21, 1970, 84 Stat. 249; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 94-530,

Sec. 1(c)(6), Oct. 17, 1976, 90 Stat. 2488; Pub. L. 95-599, title

V, Sec. 505(c)(5), Nov. 6, 1978, 92 Stat. 2760; Pub. L. 96-223,

title II, Sec. 232(d)(4)(E), Apr. 2, 1980, 94 Stat. 278; Pub. L.

97-424, title V, Sec. 515(b)(12), Jan. 6, 1983, 96 Stat. 2182; Pub.

L. 98-369, div. A, title IX, Sec. 911(d)(2)(G), title X, Sec.

1033(c)(1), July 18, 1984, 98 Stat. 1007, 1039; Pub. L. 99-514,

title XVII, Sec. 1703(e)(2)(G), Oct. 22, 1986, 100 Stat. 2778; Pub.

L. 100-647, title I, Sec. 1017(c)(9), (12), Nov. 10, 1988, 102

Stat. 3576, 3577.)

-MISC1-

AMENDMENTS

1988 - Subsec. (a). Pub. L. 100-647, Sec. 1017(c)(12), made

technical correction to language of Pub. L. 99-514, Sec.

1703(e)(2)(G), see 1986 Amendment note below.

Pub. L. 100-647, Sec. 1017(c)(9), substituted "6421(g)(2)" for

"6421(f)(2)" in two places.

1986 - Subsec. (a). Pub. L. 99-514, as amended by Pub. L.

100-647, Sec. 1017(c)(12), substituted "6427(j)(2)" for

"6427(i)(2)" in two places.

1984 - Subsec. (a). Pub. L. 98-369, Sec. 911(d)(2)(G),

substituted "6427(i)(2)" for "6427(h)(2)" in two places.

Subsec. (c). Pub. L. 98-369, Sec. 1033(c)(1), amended subsec. (c)

generally, substituting a cross reference relating to church tax

inquiries for provisions relating to church tax inquiries.

1983 - Subsec. (a). Pub. L. 97-424 struck out "6424(d)(2)," after

"6421(f)(2)," wherever appearing.

1980 - Subsec. (a). Pub. L. 96-223 substituted "6427(h)(2)" for

"6427(g)(2)" wherever appearing.

1978 - Subsec. (a). Pub. L. 95-599 substituted "6427(g)(2)" for

"6427(f)(2)" wherever appearing.

1976 - Subsec. (a). Pub. L. 94-530 substituted "6427(f)(2)" for

"6427(e)(2)" wherever appearing.

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

Subsecs. (b), (c). Pub. L. 94-455 struck out "or his delegate"

after "Secretary".

1970 - Subsec. (a). Pub. L. 91-258 inserted references to section

6427(e)(2).

1969 - Subsec. (c). Pub. L. 91-172 added subsec. (c).

1965 - Subsec. (a). Pub. L. 89-44 inserted references to section

6424(d)(2).

1956 - Subsec. (a). Act June 29, 1956, inserted references to

section 6421(f)(2).

Act Apr. 2, 1956, inserted references to section 6420(e)(2) in

second sentence.

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 OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 applicable to gasoline removed (as

defined in section 4082 of this title as amended by section 1703 of

Pub. L. 99-514) after Dec. 31, 1987, see section 1703(h) of Pub. L.

99-514, set out as a note under section 4081 of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by section 911(d)(2)(G) of Pub. L. 98-369 effective

Aug. 1, 1984, see section 911(e) of Pub. L. 98-369, set out as a

note under section 6427 of this title.

Amendment by section 1033(c)(1) of Pub. L. 98-369 applicable with

respect to inquiries and examinations beginning after Dec. 31,

1984, see section 1033(d) of Pub. L. 98-369, set out as an

Effective Date note under section 7611 of this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 97-424 applicable with respect to articles

sold after Jan. 6, 1983, see section 515(c) of Pub. L. 97-424, set

out as a note under section 34 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-223 effective Jan. 1, 1979, see section

232(h)(2) of Pub. L. 96-223, set out as a note under section 6427

of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-599 effective Jan. 1, 1979, see section

505(d) of Pub. L. 95-599, set out as a note under section 6427 of

this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-530 effective Oct. 1, 1976, see section

1(d) of Pub. L. 94-530, set out as a note under section 4041 of

this title.

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-258 effective July 1, 1970, see section

211(a) of Pub. L. 91-258, set out as a note under section 4041 of

this title.

EFFECTIVE DATE OF 1969 AMENDMENT

Amendment by Pub. L. 91-172 applicable to taxable years beginning

after Dec. 31, 1969, see section 121(g) of Pub. L. 91-172, set out

as a note under section 511 of this title.

EFFECTIVE DATE OF 1965 AMENDMENT

Amendment by Pub. L. 89-44 effective Jan. 1, 1966, see section

701(a)(1), (2), of Pub. L. 89-44, set out as a note under section

4161 of this title.

EFFECTIVE DATE OF 1956 AMENDMENT

Amendment by act June 29, 1956, effective June 29, 1956, see

section 211 of act June 29, 1956, set out as a note under section

4041 of this title.

REGULATIONS

Section 6228(b) of Pub. L. 100-647 provided that: "The Secretary

of the Treasury or the Secretary's delegate shall issue regulations

to implement subsection (a) of section 7605 of the 1986 Code

(relating to time and place of examination) within 1 year 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 4423 of this title.

-End-

-CITE-

26 USC Sec. 7606 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7606. Entry of premises for examination of taxable objects

-STATUTE-

(a) Entry during day

The Secretary may enter, in the daytime, any building or place

where any articles or objects subject to tax are made, produced, or

kept, so far as it may be necessary for the purpose of examining

said articles or objects.

(b) Entry at night

When such premises are open at night, the Secretary may enter

them while so open, in the performance of his official duties.

(c) Penalties

For penalty for refusal to permit entry or examination, see

section 7342.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 903; 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 7342 of this title.

-End-

-CITE-

26 USC [Sec. 7607 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

[Sec. 7607. Repealed. Pub. L. 98-473, title II, Sec. 320(b), Oct.

12, 1984, 98 Stat. 2056, and Pub. L. 98-573, title II, Sec.

213(b)(1), Oct. 30, 1984, 98 Stat. 2988]

-MISC1-

Section, added July 18, 1956, ch. 629, title I, Sec. 104(a), 70

Stat. 570; amended Oct. 27, 1970, Pub. L. 91-513, title III, Sec.

1102(g)(1), 84 Stat. 1292, set forth additional authority for

Bureau of Customs with respect to firearms, warrants, etc.

Another section 7607 was renumbered section 7613 of this title.

EFFECTIVE DATE OF REPEAL

Repeal effective Oct. 15, 1984, see section 214(e) of Pub. L.

98-573, set out as an Effective Date of 1984 Amendment note under

section 1304 of Title 19, Customs Duties.

-End-

-CITE-

26 USC Sec. 7608 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7608. Authority of internal revenue enforcement officers

-STATUTE-

(a) Enforcement of subtitle E and other laws pertaining to liquor,

tobacco, and firearms

Any investigator, agent, or other internal revenue officer by

whatever term designated, whom the Secretary charges with the duty

of enforcing any of the criminal, seizure, or forfeiture provisions

of subtitle E or of any other law of the United States pertaining

to the commodities subject to tax under such subtitle for the

enforcement of which the Secretary is responsible may -

(1) carry firearms;

(2) execute and serve search warrants and arrest warrants, and

serve subpoenas and summonses issued under authority of the

United States;

(3) in respect to the performance of such duty, make arrests

without warrant for any offense against the United States

committed in his presence, or for any felony cognizable under the

laws of the United States if he has reasonable grounds to believe

that the person to be arrested has committed, or is committing,

such felony; and

(4) in respect to the performance of such duty, make seizures

of property subject to forfeiture to the United States.

(b) Enforcement of laws relating to internal revenue other than

subtitle E

(1) Any criminal investigator of the Intelligence Division of the

Internal Revenue Service whom the Secretary charges with the duty

of enforcing any of the criminal provisions of the internal revenue

laws, any other criminal provisions of law relating to internal

revenue for the enforcement of which the Secretary is responsible,

or any other law for which the Secretary has delegated

investigatory authority to the Internal Revenue Service, is, in the

performance of his duties, authorized to perform the functions

described in paragraph (2).

(2) The functions authorized under this subsection to be

performed by an officer referred to in paragraph (1) are -

(A) to execute and serve search warrants and arrest warrants,

and serve subpoenas and summonses issued under authority of the

United States;

(B) to make arrests without warrant for any offense against the

United States relating to the internal revenue laws committed in

his presence, or for any felony cognizable under such laws if he

has reasonable grounds to believe that the person to be arrested

has committed or is committing any such felony; and

(C) to make seizures of property subject to forfeiture under

the internal revenue laws.

(c) Rules relating to undercover operations

(1) Certification required for exemption of undercover operations

from certain laws

With respect to any undercover investigative operation of the

Internal Revenue Service (hereinafter in this subsection referred

to as the "Service") which is necessary for the detection and

prosecution of offenses under the internal revenue laws, any

other criminal provisions of law relating to internal revenue, or

any other law for which the Secretary has delegated investigatory

authority to the Internal Revenue Service -

(A) sums authorized to be appropriated for the Service may be

used -

(i) to purchase property, buildings, and other facilities,

and to lease space, within the United States, the District of

Columbia, and the territories and possessions of the United

States without regard to -

(I) sections 1341 and 3324 of title 31, United States

Code,

(II) sections 11(a) and 22 of title 41, United States

Code,

(III) section 255 of title 41, United States Code,

(IV) section 8141 of title 40, and

(V) section 254(a) and (c) (!1) of title 41, United

States Code, and

(ii) to establish or to acquire proprietary corporations or

business entities as part of the undercover operation, and to

operate such corporations or business entities on a

commercial basis, without regard to sections 9102 and 9103 of

title 31, United States Code;

(B) sums authorized to be appropriated for the Service and

the proceeds from the undercover operations may be deposited in

banks or other financial institutions without regard to the

provisions of section 648 of title 18, United States Code, and

section 3302 of title 31, United States Code, and

(C) the proceeds from the undercover operation may be used to

offset necessary and reasonable expenses incurred in such

operation without regard to the provisions of section 3302 of

title 31, United States Code.

This paragraph shall apply only upon the written certification of

the Commissioner of Internal Revenue (or, if designated by the

Commissioner, the Deputy Commissioner or an Assistant

Commissioner of Internal Revenue) that any action authorized by

subparagraph (A), (B), or (C) is necessary for the conduct of

such undercover operation.

(2) Liquidation of corporations and business entities

If a corporation or business entity established or acquired as

part of an undercover operation under subparagraph (B) of

paragraph (1) with a net value over $50,000 is to be liquidated,

sold, or otherwise disposed of, the Service, as much in advance

as the Commissioner or his delegate determines is practicable,

shall report the circumstances to the Secretary. The proceeds of

the liquidation, sale, or other disposition, after obligations

are met, shall be deposited in the Treasury of the United States

as miscellaneous receipts.

(3) Deposit of proceeds

As soon as the proceeds from an undercover investigative

operation with respect to which an action is authorized and

carried out under subparagraphs (B) and (C) of paragraph (1) are

no longer necessary for the conduct of such operation, such

proceeds or the balance of such proceeds remaining at the time

shall be deposited into the Treasury of the United States as

miscellaneous receipts.

(4) Audits

(A) The Service shall conduct a detailed financial audit of

each undercover investigative operation which is closed in each

fiscal year; and

(i) submit the results of the audit in writing to the

Secretary; and

(ii) not later than 180 days after such undercover operation

is closed, submit a report to the Congress concerning such

audit.

(B) The Service shall also submit a report annually to the

Congress specifying as to its undercover investigative operations

-

(i) the number, by programs, of undercover investigative

operations pending as of the end of the 1-year period for which

such report is submitted;

(ii) the number, by programs, of undercover investigative

operations commenced in the 1-year period for which such report

is submitted;

(iii) the number, by programs, of undercover investigative

operations closed in the 1-year period for which such report is

submitted, and

(iv) the following information with respect to each

undercover investigative operation pending as of the end of the

1-year period for which such report is submitted or closed

during such 1-year period -

(I) the date the operation began and the date of the

certification referred to in the last sentence of paragraph

(1),

(II) the total expenditures under the operation and the

amount and use of the proceeds from the operation,

(III) a detailed description of the operation including the

potential violation being investigated and whether the

operation is being conducted under grand jury auspices, and

(IV) the results of the operation including the results of

criminal proceedings.

(5) Definitions

For purposes of paragraph (4) -

(A) Closed

The term "closed" means the date on which the later of the

following occurs;

(i) all criminal proceedings (other than appeals) are

concluded, or

(ii) covert activities are concluded, whichever occurs

later.

(B) Employees

The term "employees" has the meaning given such term by

section 2105 of title 5, United States Code.

(C) Undercover investigative operation

The term "undercover investigative operation" means any

undercover investigative operation of the Service; except that,

for purposes of subparagraphs (A) and (C) of paragraph (4),

such term only includes an operation which is exempt from

section 3302 or 9102 of title 31, United States Code.

(6) Application of section

The provisions of this subsection -

(A) shall apply after November 17, 1988, and before January

1, 1990, and

(B) shall apply after the date of the enactment of this

paragraph and before January 1, 2006.

All amounts expended pursuant to this subsection during the

period described in subparagraph (B) shall be recovered to the

extent possible, and deposited in the Treasury of the United

States as miscellaneous receipts, before January 1, 2006.

-SOURCE-

(Added Pub. L. 85-859, title II, Sec. 204(14), Sept. 2, 1958, 72

Stat. 1429; amended Pub. L. 87-863, Sec. 6(a), Oct. 23, 1962, 76

Stat. 1143; Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4,

1976, 90 Stat. 1834; Pub. L. 100-690, title VII, Sec. 7601(c)(1),

(2), Nov. 18, 1988, 102 Stat. 4504; Pub. L. 101-508, title XI, Sec.

11704(a)(32), (33), Nov. 5, 1990, 104 Stat. 1388-519; Pub. L.

104-168, title XII, Sec. 1205(b)-(c)(2), July 30, 1996, 110 Stat.

1471, 1472; Pub. L. 104-316, title I, Sec. 113, Oct. 19, 1996, 110

Stat. 3833; Pub. L. 105-206, title I, Sec. 1103(e)(4), July 22,

1998, 112 Stat. 710; Pub. L. 106-554, Sec. 1(a)(7) [title III, Sec.

303], Dec. 21, 2000, 114 Stat. 2763, 2763A-632; Pub. L. 107-217,

Sec. 3(f), Aug. 21, 2002, 116 Stat. 1299.)

-REFTEXT-

REFERENCES IN TEXT

Section 254(c) of title 41, referred to in subsec.

(c)(1)(A)(i)(V), was repealed by Pub. L. 103-355, title II, Sec.

2251(b), Oct. 13, 1994, 108 Stat. 3320. See section 254d of Title

41, Public Contracts.

The date of the enactment of this paragraph, referred to in

subsec. (c)(6)(B), is the date of enactment of Pub. L. 104-168,

which was approved July 30, 1996.

-MISC1-

PRIOR PROVISIONS

A prior section 7608 was renumbered section 7613 of this title.

AMENDMENTS

2002 - Subsec. (c)(1)(A)(i)(IV). Pub. L. 107-217 substituted

"section 8141 of title 40" for "section 34 of title 40, United

States Code".

2000 - Subsec. (c)(6). Pub. L. 106-554 substituted "January 1,

2006" for "January 1, 2001" in subpar. (B) and concluding

provisions.

1998 - Subsec. (b)(1). Pub. L. 105-206 struck out "or of the

Internal Security Division" after "Intelligence Division".

1996 - Subsec. (c)(2). Pub. L. 104-316 struck out "and the

Comptroller General of the United States" after "Secretary".

Subsec. (c)(4)(B)(ii). Pub. L. 104-168, Sec. 1205(c)(1)(A), (B),

struck out "preceding the period" after "in the 1-year period" and

"and" at end.

Subsec. (c)(4)(B)(iii), (iv). Pub. L. 104-168, Sec.

1205(c)(1)(C), added cls. (iii) and (iv) and struck out former cl.

(iii) which read as follows: "the number, by programs, of

undercover investigative operations closed in the 1-year period

preceding the period for which such report is submitted and, with

respect to each such closed undercover operation, the results

obtained and any civil claims made with respect thereto."

Subsec. (c)(5)(C). Pub. L. 104-168, Sec. 1205(c)(2), reenacted

heading without change and amended text generally. Prior to

amendment, text read as follows: "The terms 'undercover

investigative operation' and 'undercover operation' mean any

undercover investigative operation of the Service -

"(i) in which -

"(I) the gross receipts (excluding interest earned) exceed

$50,000; or

"(II) expenditures, both recoverable and nonrecoverable

(other than expenditures for salaries of employees), exceed

$150,000; and

"(ii) which is exempt from section 3302 or 9102 of title 31,

United States Code.

Clauses (i) and (ii) shall not apply with respect to the report

required under subparagraph (B) of paragraph (4)."

Subsec. (c)(6). Pub. L. 104-168, Sec. 1205(b), added par. (6).

1990 - Subsec. (c)(1)(B). Pub. L. 101-508, Sec. 11704(a)(32),

struck out comma after "operations".

Subsec. (c)(5)(C). Pub. L. 101-508, Sec. 11704(a)(33),

substituted "interest" for "interested" in cl. (i)(I) and "title

31" for "title 3" in cl. (ii).

1988 - Subsec. (b)(1). Pub. L. 100-690, Sec. 7601(c)(1),

substituted comma for "or" before "any other" and inserted ", or

any other law for which the Secretary has delegated investigatory

authority to the Internal Revenue Service," after "responsible".

Subsec. (c). Pub. L. 100-690, Sec. 7601(c)(2), added subsec. (c).

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

"Secretary" wherever appearing.

1962 - Pub. L. 87-863 redesignated existing provisions as subsec.

(a), added subsec. (a) heading, and added subsec. (b).

EFFECTIVE DATE OF 1996 AMENDMENT

Section 1205(c)(3) of Pub. L. 104-168 provided that: "The

amendments made by this subsection [amending this section] shall

take effect on the date of the enactment of this Act [July 30,

1996]."

EFFECTIVE DATE OF 1988 AMENDMENT

Section 7601(c)(3) of Pub. L. 100-690, as amended by Pub. L.

101-647, title XXXIII, Sec. 3301(a), Nov. 29, 1990, 104 Stat. 4917;

Pub. L. 104-168, title XII, Sec. 1205(a), July 30, 1996, 110 Stat.

1471, provided that: "The amendments made by this subsection

[amending this section] shall take effect on the date of the

enactment of this Act [Nov. 18, 1988]."

EFFECTIVE DATE OF 1962 AMENDMENT

Section 6(b) of Pub. L. 87-863 provided that: "The amendments

made by subsection (a) [amending this section] shall take effect on

the day after the date of enactment of this Act [Oct. 23, 1962]."

EFFECTIVE DATE

Section effective Sept. 3, 1958, see section 210(a)(1) of Pub. L.

85-859, set out as a note under section 5001 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 5558, 5604 of this title.

-FOOTNOTE-

(!1) See References in Text note below.

-End-

-CITE-

26 USC Sec. 7609 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7609. Special procedures for third-party summonses

-STATUTE-

(a) Notice

(1) In general

If any summons to which this section applies requires the

giving of testimony on or relating to, the production of any

portion of records made or kept on or relating to, or the

production of any computer software source code (as defined in

7612(d)(2)) with respect to, any person (other than the person

summoned) who is identified in the summons, then notice of the

summons shall be given to any person so identified within 3 days

of the day on which such service is made, but no later than the

23rd day before the day fixed in the summons as the day upon

which such records are to be examined. Such notice shall be

accompanied by a copy of the summons which has been served and

shall contain an explanation of the right under subsection (b)(2)

to bring a proceeding to quash the summons.

(2) Sufficiency of notice

Such notice shall be sufficient if, on or before such third

day, such notice is served in the manner provided in section 7603

(relating to service of summons) upon the person entitled to

notice, or is mailed by certified or registered mail to the last

known address of such person, or, in the absence of a last known

address, is left with the person summoned. If such notice is

mailed, it shall be sufficient if mailed to the last known

address of the person entitled to notice or, in the case of

notice to the Secretary under section 6903 of the existence of a

fiduciary relationship, to the last known address of the

fiduciary of such person, even if such person or fiduciary is

then deceased, under a legal disability, or no longer in

existence.

(3) Nature of summons

Any summons to which this subsection applies (and any summons

in aid of collection described in subsection (c)(2)(D)) shall

identify the taxpayer to whom the summons relates or the other

person to whom the records pertain and shall provide such other

information as will enable the person summoned to locate the

records required under the summons.

(b) Right to intervene; right to proceeding to quash

(1) Intervention

Notwithstanding any other law or rule of law, any person who is

entitled to notice of a summons under subsection (a) shall have

the right to intervene in any proceeding with respect to the

enforcement of such summons under section 7604.

(2) Proceeding to quash

(A) In general

Notwithstanding any other law or rule of law, any person who

is entitled to notice of a summons under subsection (a) shall

have the right to begin a proceeding to quash such summons not

later than the 20th day after the day such notice is given in

the manner provided in subsection (a)(2). In any such

proceeding, the Secretary may seek to compel compliance with

the summons.

(B) Requirement of notice to person summoned and to Secretary

If any person begins a proceeding under subparagraph (A) with

respect to any summons, not later than the close of the 20-day

period referred to in subparagraph (A) such person shall mail

by registered or certified mail a copy of the petition to the

person summoned and to such office as the Secretary may direct

in the notice referred to in subsection (a)(1).

(C) Intervention; etc.

Notwithstanding any other law or rule of law, the person

summoned shall have the right to intervene in any proceeding

under subparagraph (A). Such person shall be bound by the

decision in such proceeding (whether or not the person

intervenes in such proceeding).

(c) Summons to which section applies

(1) In general

Except as provided in paragraph (2), this section shall apply

to any summons issued under paragraph (2) of section 7602(a) or

under section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7612.

(2) Exceptions

This section shall not apply to any summons -

(A) served on the person with respect to whose liability the

summons is issued, or any officer or employee of such person;

(B) issued to determine whether or not records of the

business transactions or affairs of an identified person have

been made or kept;

(C) issued solely to determine the identity of any person

having a numbered account (or similar arrangement) with a bank

or other institution described in section 7603(b)(2)(A);

(D) issued in aid of the collection of -

(i) an assessment made or judgment rendered against the

person with respect to whose liability the summons is issued;

or

(ii) the liability at law or in equity of any transferee or

fiduciary of any person referred to in clause (i);

(E)(i) issued by a criminal investigator of the Internal

Revenue Service in connection with the investigation of an

offense connected with the administration or enforcement of the

internal revenue laws; and

(ii) served on any person who is not a third-party

recordkeeper (as defined in section 7603(b)); or

(F) described in subsection (f) or (g).

(3) Records

For purposes of this section, the term "records" includes

books, papers, and other data.

(d) Restriction on examination of records

No examination of any records required to be produced under a

summons as to which notice is required under subsection (a) may be

made -

(1) before the close of the 23rd day after the day notice with

respect to the summons is given in the manner provided in

subsection (a)(2), or

(2) where a proceeding under subsection (b)(2)(A) was begun

within the 20-day period referred to in such subsection and the

requirements of subsection (b)(2)(B) have been met, except in

accordance with an order of the court having jurisdiction of such

proceeding or with the consent of the person beginning the

proceeding to quash.

(e) Suspension of statute of limitations

(1) Subsection (b) action

If any person takes any action as provided in subsection (b)

and such person is the person with respect to whose liability the

summons is issued (or is the agent, nominee, or other person

acting under the direction or control of such person), then the

running of any period of limitations under section 6501 (relating

to the assessment and collection of tax) or under section 6531

(relating to criminal prosecutions) with respect to such person

shall be suspended for the period during which a proceeding, and

appeals therein, with respect to the enforcement of such summons

is pending.

(2) Suspension after 6 months of service of summons

In the absence of the resolution of the summoned party's

response to the summons, the running of any period of limitations

under section 6501 or under section 6531 with respect to any

person with respect to whose liability the summons is issued

(other than a person taking action as provided in subsection (b))

shall be suspended for the period -

(A) beginning on the date which is 6 months after the service

of such summons, and

(B) ending with the final resolution of such response.

(f) Additional requirement in the case of a John Doe summons

Any summons described in subsection (c)(1) which does not

identify the person with respect to whose liability the summons is

issued may be served only after a court proceeding in which the

Secretary establishes that -

(1) the summons relates to the investigation of a particular

person or ascertainable group or class of persons,

(2) there is a reasonable basis for believing that such person

or group or class of persons may fail or may have failed to

comply with any provision of any internal revenue law, and

(3) the information sought to be obtained from the examination

of the records or testimony (and the identity of the person or

persons with respect to whose liability the summons is issued) is

not readily available from other sources.

(g) Special exception for certain summonses

A summons is described in this subsection if, upon petition by

the Secretary, the court determines, on the basis of the facts and

circumstances alleged, that there is reasonable cause to believe

the giving of notice may lead to attempts to conceal, destroy, or

alter records relevant to the examination, to prevent the

communication of information from other persons through

intimidation, bribery, or collusion, or to flee to avoid

prosecution, testifying, or production of records.

(h) Jurisdiction of district court; etc.

(1) Jurisdiction

The United States district court for the district within which

the person to be summoned resides or is found shall have

jurisdiction to hear and determine any proceeding brought under

subsection (b)(2), (f), or (g). An order denying the petition

shall be deemed a final order which may be appealed.

(2) Special rule for proceedings under subsections (f) and (g)

The determinations required to be made under subsections (f)

and (g) shall be made ex parte and shall be made solely on the

petition and supporting affidavits.

(i) Duty of summoned party

(1) Recordkeeper must assemble records and be prepared to produce

records

On receipt of a summons to which this section applies for the

production of records, the summoned party shall proceed to

assemble the records requested, or such portion thereof as the

Secretary may prescribe, and shall be prepared to produce the

records pursuant to the summons on the day on which the records

are to be examined.

(2) Secretary may give summoned party certificate

The Secretary may issue a certificate to the summoned party

that the period prescribed for beginning a proceeding to quash a

summons has expired and that no such proceeding began within such

period, or that the taxpayer consents to the examination.

(3) Protection for summoned party who discloses

Any summoned party, or agent or employee thereof, making a

disclosure of records or testimony pursuant to this section in

good faith reliance on the certificate of the Secretary or an

order of a court requiring production of records or the giving of

such testimony shall not be liable to any customer or other

person for such disclosure.

(4) Notice of suspension of statute of limitations in the case of

a John Doe summons

In the case of a summons described in subsection (f) with

respect to which any period of limitations has been suspended

under subsection (e)(2), the summoned party shall provide notice

of such suspension to any person described in subsection (f).

(j) Use of summons not required

Nothing in this section shall be construed to limit the

Secretary's ability to obtain information, other than by summons,

through formal or informal procedures authorized by sections 7601

and 7602.

-SOURCE-

(Added Pub. L. 94-455, title XII, Sec. 1205(a), Oct. 4, 1976, 90

Stat. 1699; amended Pub. L. 95-599, title V, Sec. 505(c)(6), Nov.

6, 1978, 92 Stat. 2760; Pub. L. 95-600, title VII, Sec. 703(l)(4),

Nov. 6, 1978, 92 Stat. 2943; Pub. L. 96-223, title II, Sec.

232(d)(4)(E), Apr. 2, 1980, 94 Stat. 278; Pub. L. 97-248, title

III, Secs. 311(b), 331(a)-(d), 332(a), Sept. 3, 1982, 96 Stat. 601,

620, 621; Pub. L. 97-424, title V, Sec. 515(b)(12), Jan. 6, 1983,

96 Stat. 2182; Pub. L. 98-369, div. A, title VII, Sec. 714(i),

title IX, Sec. 911(d)(2)(G), July 18, 1984, 98 Stat. 962, 1007;

Pub. L. 98-620, title IV, Sec. 402(28)(D), Nov. 8, 1984, 98 Stat.

3359; Pub. L. 99-514, title VI, Sec. 656(a), title XV, Sec.

1561(a), (b), title XVII, Sec. 1703(e)(2)(G), Oct. 22, 1986, 100

Stat. 2299, 2761, 2778; Pub. L. 100-647, title I, Secs. 1015(l)(1),

(2), 1017(c)(9), (12), Nov. 10, 1988, 102 Stat. 3571, 3572, 3576,

3577; Pub. L. 104-168, title X, Sec. 1001(a), July 30, 1996, 110

Stat. 1467; Pub. L. 105-206, title III, Sec. 3415(a)-(c), July 22,

1998, 112 Stat. 755.)

-MISC1-

PRIOR PROVISIONS

A prior section 7609 was renumbered section 7613 of this title.

AMENDMENTS

1998 - Subsec. (a)(1). Pub. L. 105-206, Sec. 3415(a), reenacted

heading without change and in text substituted "If any summons to

which this section applies requires the giving of testimony on or

relating to, the production of any portion of records made or kept

on or relating to, or the production of any computer software

source code (as defined in 7612(d)(2)) with respect to, any person

(other than the person summoned) who is identified in the summons,

then" for "If -

"(A) any summons described in subsection (c) is served on any

person who is a third-party recordkeeper, and

"(B) the summons requires the production of any portion of

records made or kept of the business transactions or affairs of

any person (other than the person summoned) who is identified in

the description of the records contained in the summons,

then".

Subsec. (a)(3). Pub. L. 105-206, Sec. 3415(c)(1), redesignated

par. (5) as (3), substituted "subsection (c)(2)(D)" for "subsection

(c)(2)(B)", and struck out heading and text of former par. (3).

Text read as follows: "For purposes of this subsection, the term

'third-party recordkeeper' means -

"(A) any mutual savings bank, cooperative bank, domestic

building and loan association, or other savings institution

chartered and supervised as a savings and loan or similar

association under Federal or State law, any bank (as defined in

section 581), or any credit union (within the meaning of section

501(c)(14)(A));

"(B) any consumer reporting agency (as defined under section

603(d) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)));

"(C) any person extending credit through the use of credit

cards or similar devices;

"(D) any broker (as defined in section 3(a)(4) of the

Securities Exchange Act of 1934 (15 U.S.C. 78c(a)(4)));

"(E) any attorney;

"(F) any accountant;

"(G) any barter exchange (as defined in section 6045(c)(3));

"(H) any regulated investment company (as defined in section

851) and any agent of such regulated investment company when

acting as an agent thereof; and

"(I) any enrolled agent."

Subsec. (a)(4). Pub. L. 105-206, Sec. 3415(c)(1), struck out

heading and text of par. (4). Text read as follows: "Paragraph (1)

shall not apply to any summons -

"(A) served on the person with respect to whose liability the

summons is issued, or any officer or employee of such person,

"(B) to determine whether or not records of the business

transactions or affairs of an identified person have been made or

kept, or

"(C) described in subsection (f)."

Subsec. (a)(5). Pub. L. 105-206, Sec. 3415(c)(1), redesignated

par. (5) as (3).

Subsec. (c). Pub. L. 105-206, Sec. 3415(c)(2), reenacted heading

without change and amended text generally, substituting present

provisions for provisions which had: in par. (1) declared a general

rule of including within subsection summons issued under sections

6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602(a)(2); in par. (2) set

forth exceptions where summons was solely to determine identity of

person having a numbered account, or was in aid of collection of

liability of person against whom assessment or judgment had been

made, or his transferee or fiduciary; and in par. (3) defined

"records" and declared that summons requiring testimony about

records would be treated as summons requiring production of such

records.

Subsec. (e)(2). Pub. L. 105-206, Sec. 3415(c)(3), substituted

"summoned party's response to the summons" for "third-party

recordkeeper's response to the summons described in subsection (c),

or the summoned party's response to a summons described in

subsection (f)".

Subsec. (f). Pub. L. 105-206, Sec. 3415(c)(4)(A), substituted

"subsection (c)(1)" for "subsection (c)" in introductory

provisions.

Subsec. (f)(3). Pub. L. 105-206, Sec. 3415(c)(4)(B), inserted "or

testimony" after "records".

Subsec. (g). Pub. L. 105-206, Sec. 3415(c)(5), substituted "A

summons is described in this subsection if" for "In the case of any

summons described in subsection (c), the provisions of subsections

(a)(1) and (b) shall not apply if".

Subsec. (i). Pub. L. 105-206, Sec. 3415(c)(6)(A), struck out

"third-party recordkeeper and" after "Duty of" in heading.

Subsec. (i)(1). Pub. L. 105-206, Sec. 3415(c)(6)(B), substituted

"to which this section applies for the production of records, the

summoned party" for "described in subsection (c), the third-party

recordkeeper".

Subsec. (i)(2). Pub. L. 105-206, Sec. 3415(c)(6)(C), substituted

"summoned party" for "recordkeeper" in heading and "the summoned

party" for "the third-party recordkeeper" in text.

Subsec. (i)(3). Pub. L. 105-206, Sec. 3415(c)(6)(D), substituted

"summoned party" for "recordkeeper" in heading and amended text of

par. (3) generally. Prior to amendment, text read as follows: "Any

third-party recordkeeper, or agent or employee thereof, making a

disclosure of records pursuant to this section in good-faith

reliance on the certificate of the Secrtetary or an order of a

court requiring production of records shall not be liable to any

customer or other person for such disclosure."

Subsec. (j). Pub. L. 105-206, Sec. 3415(b), added subsec. (j).

1996 - Subsec. (a)(3)(I). Pub. L. 104-168 added subpar. (I).

1988 - Subsec. (c)(1). Pub. L. 100-647, Sec. 1017(c)(12), made

technical correction to language of Pub. L. 99-514, Sec.

1703(e)(2)(G), see 1986 Amendment note below.

Pub. L. 100-647, Sec. 1017(c)(9), substituted "6421(g)(2)" for

"6421(f)(2)".

Subsec. (e)(2). Pub. L. 100-647, Sec. 1015(l)(1), inserted "or

the summoned party's response to a summons described in subsection

(f)," after "the summons described in subsection (c)," and

substituted "the summons is issued" for "the summons is issued

other".

Subsec. (i). Pub. L. 100-647, Sec. 1015(l)(2)(B), inserted "and

summoned party" after "recordkeeper" in heading.

Subsec. (i)(4). Pub. L. 100-647, Sec. 1015(l)(2)(A), substituted

"the summoned party" for "the third-party recordkeeper".

1986 - Subsec. (a)(3)(H). Pub. L. 99-514, Sec. 656(a), added

subpar. (H).

Subsec. (c)(1). Pub. L. 99-514, Sec. 1703(e)(2)(G), as amended by

Pub. L. 100-647, Sec. 1017(c)(12), substituted "6427(j)(2)" for

"6427(i)(2)".

Subsec. (e). Pub. L. 99-514, Sec. 1561(a), amended subsec. (e)

generally, designating existing provisions as par. (1), inserting

heading, and adding par. (2).

Subsec. (i)(4). Pub. L. 99-514, Sec. 1561(b), added par. (4).

1984 - Subsec. (c)(1). Pub. L. 98-369, Sec. 714(i), substituted

"7602(a)" for "7602".

Pub. L. 98-369, Sec. 911(d)(2)(G), substituted "6427(i)(2)" for

"6427(h)(2)".

Subsec. (h)(3). Pub. L. 98-620 struck out par. (3) which had

provided that except as to cases the court considered to be of

greater importance, proceedings brought for the enforcement of any

summons, or proceedings under this section, and appeals, would take

precedence on the docket over all other cases and would be assigned

for hearing and decided at the earliest practicable date.

1983 - Subsec. (c)(1). Pub. L. 97-424 struck out "6424(d)(2),"

after "6421(f)(2),".

1982 - Subsec. (a)(1). Pub. L. 97-248, Sec. 331(d)(1),

substituted "the 23rd day" for "the 14th day", and substituted "an

explanation of the right under subsection (b)(2) to bring a

proceeding to quash the summons" for "directions for staying

compliance with the summons under subsection (b)(2)" at the end.

Subsec. (a)(3)(G). Pub. L. 97-248, Sec. 311(b), added subpar.

(G).

Subsec. (b). Pub. L. 97-248, Sec. 331(a), (d)(2), substituted

"right to proceeding to quash" for "right to stay compliance" in

heading, and in par. (2) substituted "Proceeding to quash" for

"Right to stay compliance" as par. (2) heading, designated former

undesignated matter as subpar. (A), in (A) as so designated

substituted provisions giving persons entitled to notice 20 days to

begin a proceeding to quash, for provisions giving persons entitled

to notice the right to stay compliance if they complied with the

provisions of former subpars. (A) and (B) within 14 days, and

inserted provision that the Secretary may seek to compel compliance

with the summons, struck out former subpar. (A) which provided that

notice to the person summoned not to comply with the summons be

given in writing, in subpar. (B) substituted provisions that copies

of the petition in the proceeding to quash the summons be mailed

within the 20-day period, for provisions that copies of the notice

not to comply with the summons be mailed, and added subpar. (C).

Subsec. (d). Pub. L. 97-248, Sec. 331(b), substituted in par. (1)

provision that, no examination of records be made before the close

of the 23rd day after the notice of summons, for provision that the

examination may not be made before the end of the former 14-day

period allowed for notice to be given to the person summoned not to

comply, and in par. (2) substituted "where a proceeding under

subsection (b)(2)(A) was begun within the 20-day period referred to

in such subsection and the requirements of subsection (b)(2)(B)

have been met," for "when the requirements of subsection (b)(2)

have been met," and "of the court having jurisdiction of such

proceeding or with the consent of the person beginning the

proceeding to quash" for "issued by a court of competent

jurisdiction authorizing examination of such records or with the

consent of the person staying compliance".

Subsec. (h). Pub. L. 97-248, Sec. 331(c), inserted "; etc." after

"court" in heading, in par. (1) added heading and substituted "any

proceeding" for "proceedings" after "determine", substituted

"subsection (b)(2), (f), or (g)" for "subsections (f) or (g)",

designated former second sentence of par. (1) as par. (2) and added

heading, redesignated former par. (2) as (3) and in par. (3) as so

redesignated, added heading and substituted "all other cases" for

"all cases".

Subsec. (i). Pub. L. 97-248, Sec. 332(a), added subsec. (i).

1980 - Subsec. (c)(1). Pub. L. 96-223 substituted "6427(h)(2)"

for "6427(g)(2)".

1978 - Subsec. (c)(1). Pub. L. 95-600 which purported to

substitute "6427(f)(2)" for "6427(e)(2)" was not executed in view

of the amendment made by Pub. L. 95-599. See below.

Pub. L. 95-599 substituted "6427(g)(2)" for "6427(e)(2)".

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3415(d), July 22, 1998, 112

Stat. 756, provided that: "The amendments made by this section

[amending this section] shall apply to summonses served after the

date of the enactment of this Act [July 22, 1998]."

EFFECTIVE DATE OF 1996 AMENDMENT

Section 1001(b) of Pub. L. 104-168 provided that: "The amendment

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

summonses issued after the date of the enactment of this Act [July

30, 1996]."

EFFECTIVE DATE OF 1988 AMENDMENT

Section 1015(l)(3) of Pub. L. 100-647 provided that: "The

amendments made by this subsection [amending this section] shall

take effect on the date of the enactment of this Act [Nov. 10,

1988]."

Amendment by section 1017(c)(9), (12) of 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 OF 1986 AMENDMENT

Section 656(b) of Pub. L. 99-514 provided that: "The amendment

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

summonses served after the date of the enactment of this Act [Oct.

22, 1986]."

Section 1561(c) of Pub. L. 99-514 provided that: "The amendments

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

the date of the enactment of this Act [Oct. 22, 1986]."

Amendment by section 1703(e)(2)(G) of Pub. L. 99-514 applicable

to gasoline removed (as defined in section 4082 of this title, as

amended by section 1703 of Pub. L. 99-514) after Dec. 31, 1987, see

section 1703(h) of Pub. L. 99-514, set out as a note under section

4081 of this title.

EFFECTIVE DATE OF 1984 AMENDMENTS

Amendment by Pub. L. 98-620 not applicable to cases pending on

Nov. 8, 1984, see section 403 of Pub. L. 98-620, set out as an

Effective Date note under section 1657 of Title 28, Judiciary and

Judicial Procedure.

Amendment by section 714(i) of Pub. L. 98-369 effective as if

included in the provision of the Tax Equity and Fiscal

Responsibility Act of 1982, Pub. L. 97-248, to which such amendment

relates, see section 715 of Pub. L. 98-369, set out as a note under

section 31 of this title.

Amendment by section 911(d)(2)(G) of Pub. L. 98-369 effective

Aug. 1, 1984, see section 911(e) of Pub. L. 98-369, set out as a

note under section 6427 of this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 97-424 applicable with respect to articles

sold after Jan. 6, 1983, see section 515(c) of Pub. L. 97-424, set

out as a note under section 34 of this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Section 311(c)(2) of Pub. L. 97-248 provided that: "The

amendments made by subsection (b) [amending this section] shall

apply to summonses served after December 31, 1982."

Section 331(e) of Pub. L. 97-248 provided that: "The amendments

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

summonses served after December 31, 1982."

Section 332(b) of Pub. L. 97-248 provided that: "The amendment

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

summonses served after December 31, 1982."

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-223 effective Jan. 1, 1979, see section

232(h)(2) of Pub. L. 96-223, set out as a note under section 6427

of this title.

EFFECTIVE DATE OF 1978 AMENDMENTS

Amendment by Pub. L. 95-600 effective Oct. 4, 1976, see section

703(r) of Pub. L. 95-600, set out a note under section 46 of this

title.

Amendment by Pub. L. 95-599 effective Jan. 1, 1979, see section

505(d) of Pub. L. 95-599, set out as a note under section 6427 of

this title.

EFFECTIVE DATE

Section 1205(c) of Pub. L. 94-455, as amended by Pub. L. 94-528,

Sec. 2(b), Oct. 17, 1976, 90 Stat. 2483, provided that: "The

amendments made by this section [enacting this section and section

7610 of this title] shall apply with respect to any summons issued

after February 28, 1977."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7611 of this title.

-End-

-CITE-

26 USC Sec. 7610 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7610. Fees and costs for witnesses

-STATUTE-

(a) In general

The Secretary shall by regulations establish the rates and

conditions under which payment may be made of -

(1) fees and mileage to persons who are summoned to appear

before the Secretary, and

(2) reimbursement for such costs that are reasonably necessary

which have been directly incurred in searching for, reproducing,

or transporting books, papers, records, or other data required to

be produced by summons.

(b) Exceptions

No payment may be made under paragraph (2) of subsection (a) if -

(1) the person with respect to whose liability the summons is

issued has a proprietary interest in the books, papers, records

or other data required to be produced, or

(2) the person summoned is the person with respect to whose

liability the summons is issued or an officer, employee, agent,

accountant, or attorney of such person who, at the time the

summons is served, is acting as such.

(c) Summons to which section applies

This section applies with respect to any summons authorized under

section 6420(e)(2), 6421(g)(2), 6427(j)(2), or 7602.

-SOURCE-

(Added Pub. L. 94-455, title XII, Sec. 1205(a), Oct. 4, 1976, 90

Stat. 1699; amended Pub. L. 95-599, title V, Sec. 505(c)(6), Nov.

6, 1978, 92 Stat. 2760; Pub. L. 96-223, title II, Sec.

232(d)(4)(E), Apr. 2, 1980, 94 Stat. 278; Pub. L. 97-424, title V,

Sec. 515(b)(12), Jan. 6, 1983, 96 Stat. 2182; Pub. L. 98-369, div.

A, title IX, Sec. 911(d)(2)(G), July 18, 1984, 98 Stat. 1007; Pub.

L. 99-514, title XVII, Sec. 1703(e)(2)(G), Oct. 22, 1986, 100 Stat.

2778; Pub. L. 100-647, title I, Sec. 1017(c)(9), (12), Nov. 10,

1988, 102 Stat. 3576, 3577.)

-MISC1-

AMENDMENTS

1988 - Subsec. (c). Pub. L. 100-647, Sec. 1017(c)(12), made

technical correction to language of Pub. L. 99-514, Sec.

1703(e)(2)(G), see 1986 Amendment note below.

Pub. L. 100-647, Sec. 1017(c)(9), substituted "6421(g)(2)" for

"6421(f)(2)".

1986 - Subsec. (c). Pub. L. 99-514, as amended by Pub. L.

100-647, Sec. 1017(c)(12), substituted "6427(j)(2)" for

"6427(i)(2)".

1984 - Subsec. (c). Pub. L. 98-369 substituted "6427(i)(2)" for

"6427(h)(2)".

1983 - Subsec. (c). Pub. L. 97-424 struck out "6424(d)(2)," after

"6421(f)(2),".

1980 - Subsec. (c). Pub. L. 96-223 substituted "6427(h)(2)" for

"6427(g)(2)".

1978 - Subsec. (c). Pub. L. 95-599 substituted "6427(g)(2)" for

"6427(e)(2)".

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 OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 applicable to gasoline removed (as

defined in section 4082 of this title as amended by section 1703 of

Pub. L. 99-514) after Dec. 31, 1987, see section 1703(h) of Pub. L.

99-514, set out as a note under section 4081 of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 effective Aug. 1, 1984, see section

911(e) of Pub. L. 98-369, set out as a note under section 6427 of

this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 97-424 applicable with respect to articles

sold after Jan. 6, 1983, see section 515(c) of Pub. L. 97-424, set

out as a note under section 34 of this title.

EFFECTIVE DATE OF 1980 AMENDMENT

Amendment by Pub. L. 96-223 effective Jan. 1, 1979, see section

232(h)(2) of Pub. L. 96-223, set out as a note under section 6427

of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-599 effective Jan. 1, 1979, see section

505(d) of Pub. L. 95-599, set out as a note under section 6427 of

this title.

-End-

-CITE-

26 USC Sec. 7611 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7611. Restrictions on church tax inquiries and examinations

-STATUTE-

(a) Restrictions on inquiries

(1) In general

The Secretary may begin a church tax inquiry only if -

(A) the reasonable belief requirements of paragraph (2), and

(B) the notice requirements of paragraph (3), have been met.

(2) Reasonable belief requirements

The requirements of this paragraph are met with respect to any

church tax inquiry if an appropriate high-level Treasury official

reasonably believes (on the basis of facts and circumstances

recorded in writing) that the church -

(A) may not be exempt, by reason of its status as a church,

from tax under section 501(a), or

(B) may be carrying on an unrelated trade or business (within

the meaning of section 513) or otherwise engaged in activities

subject to taxation under this title.

(3) Inquiry notice requirements

(A) In general

The requirements of this paragraph are met with respect to

any church tax inquiry if, before beginning such inquiry, the

Secretary provides written notice to the church of the

beginning of such inquiry.

(B) Contents of inquiry notice

The notice required by this paragraph shall include -

(i) an explanation of -

(I) the concerns which gave rise to such inquiry, and

(II) the general subject matter of such inquiry, and

(ii) a general explanation of the applicable -

(I) administrative and constitutional provisions with

respect to such inquiry (including the right to a

conference with the Secretary before any examination of

church records), and

(II) provisions of this title which authorize such

inquiry or which may be otherwise involved in such inquiry.

(b) Restrictions on examinations

(1) In general

The Secretary may begin a church tax examination only if the

requirements of paragraph (2) have been met and such examination

may be made only -

(A) in the case of church records, to the extent necessary to

determine the liability for, and the amount of, any tax imposed

by this title, and

(B) in the case of religious activities, to the extent

necessary to determine whether an organization claiming to be a

church is a church for any period.

(2) Notice of examination; opportunity for conference

The requirements of this paragraph are met with respect to any

church tax examination if -

(A) at least 15 days before the beginning of such

examination, the Secretary provides the notice described in

paragraph (3) to both the church and the appropriate regional

counsel of the Internal Revenue Service, and

(B) the church has a reasonable time to participate in a

conference described in paragraph (3)(A)(iii), but only if the

church requests such a conference before the beginning of the

examination.

(3) Contents of examination notice, et cetera

(A) In general

The notice described in this paragraph is a written notice

which includes -

(i) a copy of the church tax inquiry notice provided to the

church under subsection (a),

(ii) a description of the church records and activities

which the Secretary seeks to examine,

(iii) an offer to have a conference between the church and

the Secretary in order to discuss, and attempt to resolve,

concerns relating to such examination, and

(iv) a copy of all documents which were collected or

prepared by the Internal Revenue Service for use in such

examination and the disclosure of which is required by the

Freedom of Information Act (5 U.S.C. 552).

(B) Earliest day examination notice may be provided

The examination notice described in subparagraph (A) shall

not be provided to the church before the 15th day after the

date on which the church tax inquiry notice was provided to the

church under subsection (a).

(C) Opinion of regional counsel with respect to examination

Any regional counsel of the Internal Revenue Service who

receives an examination notice under paragraph (1) may, within

15 days after such notice is provided, submit to the regional

commissioner for the region an advisory objection to the

examination.

(4) Examination of records and activities not specified in notice

Within the course of a church tax examination which (at the

time the examination begins) meets the requirements of paragraphs

(1) and (2), the Secretary may examine any church records or

religious activities which were not specified in the examination

notice to the extent such examination meets the requirement of

subparagraph (A) or (B) of paragraph (1) (whichever applies).

(c) Limitation on period of inquiries and examinations

(1) Inquiries and examinations must be completed within 2 years

(A) In general

The Secretary shall complete any church tax status inquiry or

examination (and make a final determination with respect

thereto) not later than the date which is 2 years after the

examination notice date.

(B) Inquiries not followed by examinations

In the case of a church tax inquiry with respect to which

there is no examination notice under subsection (b), the

Secretary shall complete such inquiry (and make a final

determination with respect thereto) not later than the date

which is 90 days after the inquiry notice date.

(2) Suspension of 2-year period

The running of the 2-year period described in paragraph (1)(A)

and the 90-day period in paragraph (1)(B) shall be suspended -

(A) for any period during which -

(i) a judicial proceeding brought by the church against the

Secretary with respect to the church tax inquiry or

examination is pending or being appealed,

(ii) a judicial proceeding brought by the Secretary against

the church (or any official thereof) to compel compliance

with any reasonable request of the Secretary in a church tax

examination for examination of church records or religious

activities is pending or being appealed, or

(iii) the Secretary is unable to take actions with respect

to the church tax inquiry or examination by reason of an

order issued in any judicial proceeding brought under section

7609,

(B) for any period in excess of 20 days (but not in excess of

6 months) in which the church or its agents fail to comply with

any reasonable request of the Secretary for church records or

other information, or

(C) for any period mutually agreed upon by the Secretary and

the church.

(d) Limitations on revocation of tax-exempt status, etc.

(1) In general

The Secretary may -

(A) determine that an organization is not a church which -

(i) is exempt from taxation by reason of section 501(a), or

(ii) is described in section 170(c), or

(B)(i) send a notice of deficiency of any tax involved in a

church tax examination, or

(ii) in the case of any tax with respect to which subchapter

B of chapter 63 (relating to deficiency procedures) does not

apply, assess any underpayment of such tax involved in a church

tax examination,

only if the appropriate regional counsel of the Internal Revenue

Service determines in writing that there has been substantial

compliance with the requirements of this section and approves in

writing of such revocation, notice of deficiency, or assessment.

(2) Limitations on period of assessment

(A) Revocation of tax-exempt status

(i) 3-year statute of limitations generally

In the case of any church tax examination with respect to

the revocation of tax-exempt status under section 501(a), any

tax imposed by chapter 1 (other than section 511) may be

assessed, or a proceeding in court for collection of such tax

may be begun without assessment, only for the 3 most recent

taxable years ending before the examination notice date.

(ii) 6-year statute of limitations where tax-exempt status

revoked

If an organization is not a church exempt from tax under

section 501(a) for any of the 3 taxable years described in

clause (i), clause (i) shall be applied by substituting "6

most recent taxable years" for "3 most recent taxable years".

(B) Unrelated business tax

In the case of any church tax examination with respect to the

tax imposed by section 511 (relating to unrelated business

income), such tax may be assessed, or a proceeding in court for

the collection of such tax may be begun without assessment,

only with respect to the 6 most recent taxable years ending

before the examination notice date.

(C) Exception where shorter statute of limitations otherwise

applicable

Subparagraphs (A) and (B) shall not be construed to increase

the period otherwise applicable under subchapter A of chapter

66 (relating to limitations on assessment and collection).

(e) Information not collected in substantial compliance with

procedures to stay summons proceeding

(1) In general

If there has not been substantial compliance with -

(A) the notice requirements of subsection (a) or (b),

(B) the conference requirement described in subsection

(b)(3)(A)(iii), or

(C) the approval requirement of subsection (d)(1) (if

applicable),

with respect to any church tax inquiry or examination, any

proceeding to compel compliance with any summons with respect to

such inquiry or examination shall be stayed until the court finds

that all practicable steps to correct the noncompliance have been

taken. The period applicable under paragraph (1) or subsection

(c) shall not be suspended during the period of any stay under

the preceding sentence.

(2) Remedy to be exclusive

No suit may be maintained, and no defense may be raised in any

proceeding (other than as provided in paragraph (1)), by reason

of any noncompliance by the Secretary with the requirements of

this section.

(f) Limitations on additional inquiries and examinations

(1) In general

If any church tax inquiry or examination with respect to any

church is completed and does not result in -

(A) a revocation, notice of deficiency, or assessment

described in subsection (d)(1), or

(B) a request by the Secretary for any significant change in

the operational practices of the church (including the adequacy

of accounting practices),

no other church tax inquiry or examination may begin with respect

to such church during the applicable 5-year period unless such

inquiry or examination is approved in writing by the Secretary or

does not involve the same or similar issues involved in the

preceding inquiry or examination. For purposes of the preceding

sentence, an inquiry or examination shall be treated as completed

not later than the expiration of the applicable period under

paragraph (1) of subsection (c).

(2) Applicable 5-year period

For purposes of paragraph (1), the term "applicable 5-year

period" means the 5-year period beginning on the date the notice

taken into account for purposes of subsection (c)(1) was

provided. For purposes of the preceding sentence, the rules of

subsection (c)(2) shall apply.

(g) Treatment of final report of revenue agent

Any final report of an agent of the Internal Revenue Service

shall be treated as a determination of the Secretary under

paragraph (1) of section 7428(a), and any church receiving such a

report shall be treated for purposes of sections 7428 and 7430 as

having exhausted the administrative remedies available to it.

(h) Definitions

For purposes of this section -

(1) Church

The term "church" includes -

(A) any organization claiming to be a church, and

(B) any convention or association of churches.

(2) Church tax inquiry

The term "church tax inquiry" means any inquiry to a church

(other than an examination) to serve as a basis for determining

whether a church -

(A) is exempt from tax under section 501(a) by reason of its

status as a church, or

(B) is carrying on an unrelated trade or business (within the

meaning of section 513) or otherwise engaged in activities

which may be subject to taxation under this title.

(3) Church tax examination

The term "church tax examination" means any examination for

purposes of making a determination described in paragraph (2) of

-

(A) church records at the request of the Internal Revenue

Service, or

(B) the religious activities of any church.

(4) Church records

(A) In general

The term "church records" means all corporate and financial

records regularly kept by a church, including corporate minute

books and lists of members and contributors.

(B) Exception

Such term shall not include records acquired -

(i) pursuant to a summons to which section 7609 applies, or

(ii) from any governmental agency.

(5) Inquiry notice date

The term "inquiry notice date" means the date the notice with

respect to a church tax inquiry is provided under subsection (a).

(6) Examination notice date

The term "examination notice date" means the date the notice

with respect to a church tax examination is provided under

subsection (b) to the church.

(7) Appropriate high-level Treasury official

The term "appropriate high-level Treasury official" means the

Secretary of the Treasury or any delegate of the Secretary whose

rank is no lower than that of a principal Internal Revenue

officer for an internal revenue region.

(i) Section not to apply to criminal investigations, etc.

This section shall not apply to -

(1) any criminal investigation,

(2) any inquiry or examination relating to the tax liability of

any person other than a church,

(3) any assessment under section 6851 (relating to termination

assessments of income tax), section 6852 (relating to termination

assessments in case of flagrant political expenditures of section

501(c)(3) organizations), or section 6861 (relating to jeopardy

assessments of income taxes, etc.),

(4) any willful attempt to defeat or evade any tax imposed by

this title, or

(5) any knowing failure to file a return of tax imposed by this

title.

-SOURCE-

(Added Pub. L. 98-369, div. A, title X, Sec. 1033(a), July 18,

1984, 98 Stat. 1034; amended Pub. L. 99-514, title XVIII, Sec.

1899A(61), (62), Oct. 22, 1986, 100 Stat. 2962; Pub. L. 100-203,

title X, Sec. 10713(b)(2)(G), Dec. 22, 1987, 101 Stat. 1330-470;

Pub. L. 100-647, title I, Sec. 1018(u)(49), Nov. 10, 1988, 102

Stat. 3593; Pub. L. 101-239, title VII, Sec. 7822(d)(1), Dec. 19,

1989, 103 Stat. 2425; Pub. L. 104-188, title I, Sec. 1704(t)(59),

Aug. 20, 1996, 110 Stat. 1890; Pub. L. 105-206, title I, Sec.

1102(e)(3), July 22, 1998, 112 Stat. 705.)

-MISC1-

PRIOR PROVISIONS

A prior section 7611 was renumbered section 7613 of this title.

AMENDMENTS

1998 - Subsec. (f)(1). Pub. L. 105-206 substituted "Secretary"

for "Assistant Commissioner for Employee Plans and Exempt

Organizations of the Internal Revenue Service" in concluding

provisions.

1996 - Subsec. (h)(7). Pub. L. 104-188 substituted "appropriate"

for "approporiate" in text.

1989 - Subsec. (i)(3). Pub. L. 101-239 made technical correction

to directory language of Pub. L. 100-203, see 1987 Amendment note

below.

1988 - Subsec. (i)(5). Pub. L. 100-647 substituted "this title"

for "the title".

1987 - Subsec. (i)(3). Pub. L. 100-203, as amended by Pub. L.

101-239, substituted ", section 6852 (relating to termination

assessments in case of flagrant political expenditures of section

501(c)(3) organizations), or section 6861 (relating to jeopardy

assessments of income taxes, etc.)," for "or section 6861 (relating

to jeopardy assessments of income taxes, etc.),".

1986 - Subsec. (a)(1)(B). Pub. L. 99-514, Sec. 1899A(62),

reenacted subpar. (B) without change.

Subsec. (i). Pub. L. 99-514, Sec. 1899A(61), redesignated pars.

(A) to (E) as (1) to (5), in par. (3), substituted "etc.)" for

"etc)", and in par. (5), substituted "the title" for "the title".

EFFECTIVE DATE OF 1989 AMENDMENT

Amendment by Pub. L. 101-239 effective as if included in the

provision of the Revenue Act of 1987, Pub. L. 100-203, title X, to

which such amendment relates, see section 7823 of Pub. L. 101-239,

set out as a note under section 26 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 1033(d) of Pub. L. 98-369 provided that: "The amendments

made by this section [enacting this section and amending sections

7428 and 7605 of this title] shall apply with respect to inquiries

and examinations beginning after December 31, 1984."

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.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7605 of this title.

-End-

-CITE-

26 USC Sec. 7612 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7612. Special procedures for summonses for computer software

-STATUTE-

(a) General rule

For purposes of this title -

(1) except as provided in subsection (b), no summons may be

issued under this title, and the Secretary may not begin any

action under section 7604 to enforce any summons to produce or

analyze any tax-related computer software source code; and

(2) any software and related materials which are provided to

the Secretary under this title shall be subject to the safeguards

under subsection (c).

(b) Circumstances under which computer software source code may be

provided

(1) In general

Subsection (a)(1) shall not apply to any portion, item, or

component of tax-related computer software source code if -

(A) the Secretary is unable to otherwise reasonably ascertain

the correctness of any item on a return from -

(i) the taxpayer's books, papers, records, or other data;

or

(ii) the computer software executable code (and any

modifications thereof) to which such source code relates and

any associated data which, when executed, produces the output

to ascertain the correctness of the item;

(B) the Secretary identifies with reasonable specificity the

portion, item, or component of such source code needed to

verify the correctness of such item on the return; and

(C) the Secretary determines that the need for the portion,

item, or component of such source code with respect to such

item outweighs the risks of unauthorized disclosure of trade

secrets.

(2) Exceptions

Subsection (a)(1) shall not apply to -

(A) any inquiry into any offense connected with the

administration or enforcement of the internal revenue laws;

(B) any tax-related computer software source code acquired or

developed by the taxpayer or a related person primarily for

internal use by the taxpayer or such person rather than for

commercial distribution;

(C) any communications between the owner of the tax-related

computer software source code and the taxpayer or related

persons; or

(D) any tax-related computer software source code which is

required to be provided or made available pursuant to any other

provision of this title.

(3) Cooperation required

For purposes of paragraph (1), the Secretary shall be treated

as meeting the requirements of subparagraphs (A) and (B) of such

paragraph if -

(A) the Secretary determines that it is not feasible to

determine the correctness of an item without access to the

computer software executable code and associated data described

in paragraph (1)(A)(ii);

(B) the Secretary makes a formal request to the taxpayer for

such code and data and to the owner of the computer software

source code for such executable code; and

(C) such code and data is not provided within 180 days of

such request.

(4) Right to contest summons

In any proceeding brought under section 7604 to enforce a

summons issued under the authority of this subsection, the court

shall, at the request of any party, hold a hearing to determine

whether the applicable requirements of this subsection have been

met.

(c) Safeguards to ensure protection of trade secrets and other

confidential information

(1) Entry of protective order

In any court proceeding to enforce a summons for any portion of

software, the court may receive evidence and issue any order

necessary to prevent the disclosure of trade secrets or other

confidential information with respect to such software, including

requiring that any information be placed under seal to be opened

only as directed by the court.

(2) Protection of software

Notwithstanding any other provision of this section, and in

addition to any protections ordered pursuant to paragraph (1), in

the case of software that comes into the possession or control of

the Secretary in the course of any examination with respect to

any taxpayer -

(A) the software may be used only in connection with the

examination of such taxpayer's return, any appeal by the

taxpayer to the Internal Revenue Service Office of Appeals, any

judicial proceeding (and any appeals therefrom), and any

inquiry into any offense connected with the administration or

enforcement of the internal revenue laws;

(B) the Secretary shall provide, in advance, to the taxpayer

and the owner of the software a written list of the names of

all individuals who will analyze or otherwise have access to

the software;

(C) the software shall be maintained in a secure area or

place, and, in the case of computer software source code, shall

not be removed from the owner's place of business unless the

owner permits, or a court orders, such removal;

(D) the software may not be copied except as necessary to

perform such analysis, and the Secretary shall number all

copies made and certify in writing that no other copies have

been (or will be) made;

(E) at the end of the period during which the software may be

used under subparagraph (A) -

(i) the software and all copies thereof shall be returned

to the person from whom they were obtained and any copies

thereof made under subparagraph (D) on the hard drive of a

machine or other mass storage device shall be permanently

deleted; and

(ii) the Secretary shall obtain from any person who

analyzes or otherwise had access to such software a written

certification under penalty of perjury that all copies and

related materials have been returned and that no copies were

made of them;

(F) the software may not be decompiled or disassembled;

(G) the Secretary shall provide to the taxpayer and the owner

of any interest in such software, as the case may be, a written

agreement, between the Secretary and any person who is not an

officer or employee of the United States and who will analyze

or otherwise have access to such software, which provides that

such person agrees not to -

(i) disclose such software to any person other than persons

to whom such information could be disclosed for tax

administration purposes under section 6103; or

(ii) participate for 2 years in the development of software

which is intended for a similar purpose as the software

examined; and

(H) the software shall be treated as return information for

purposes of section 6103.

For purposes of subparagraph (C), the owner shall make available

any necessary equipment or materials for analysis of computer

software source code required to be conducted on the owner's

premises. The owner of any interest in the software shall be

considered a party to any agreement described in subparagraph

(G).

(d) Definitions

For purposes of this section -

(1) Software

The term "software" includes computer software source code and

computer software executable code.

(2) Computer software source code

The term "computer software source code" means -

(A) the code written by a programmer using a programming

language which is comprehensible to appropriately trained

persons and is not capable of directly being used to give

instructions to a computer;

(B) related programmers' notes, design documents, memoranda,

and similar documentation; and

(C) related customer communications.

(3) Computer software executable code

The term "computer software executable code" means -

(A) any object code, machine code, or other code readable by

a computer when loaded into its memory and used directly by

such computer to execute instructions; and

(B) any related user manuals.

(4) Owner

The term "owner" shall, with respect to any software, include

the developer of the software.

(5) Related person

A person shall be treated as related to another person if such

persons are related persons under section 267 or 707(b).

(6) Tax-related computer software source code

The term "tax-related computer software source code" means the

computer source code for any computer software program intended

for accounting, tax return preparation or compliance, or tax

planning.

-SOURCE-

(Added Pub. L. 105-206, title III, Sec. 3413(a), July 22, 1998, 112

Stat. 751.)

-MISC1-

PRIOR PROVISIONS

A prior section 7612 was renumbered section 7613 of this title.

EFFECTIVE DATE

Pub. L. 105-206, title III, Sec. 3413(e), July 22, 1998, 112

Stat. 754, provided that:

"(1) In general. - The amendments made by this section [enacting

this section, amending sections 7213 and 7603 of this title, and

renumbering former section 7612 of this title as 7613] shall apply

to summonses issued, and software acquired, after the date of the

enactment of this Act [July 22, 1998].

"(2) Software protection. - In the case of any software acquired

on or before such date of enactment, the requirements of section

7612(a)(2) of the Internal Revenue Code of 1986 (as added by such

amendments) shall apply after the 90th day after such date. The

preceding sentence shall not apply to the requirement under section

7612(c)(2)(G)(ii) of such Code (as so added)."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 7213, 7603, 7609 of this

title.

-End-

-CITE-

26 USC Sec. 7613 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter A - Examination and Inspection

-HEAD-

Sec. 7613. Cross references

-STATUTE-

(a) Inspection of books, papers, records, or other data

For inspection of books, papers, records, or other data in

the case of -

(1) Wagering, see section 4423.

(2) Alcohol, tobacco, and firearms taxes, see subtitle E.

(b) Search warrants

For provisions relating to -

(1) Searches and seizures, see Rule 41 of the Federal Rules

of Criminal Procedure.

(2) Issuance of search warrants with respect to subtitle E,

see section 5557.

(3) Search warrants with respect to property used in

violation of the internal revenue laws, see section 7302.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 903, Sec. 7607; renumbered Sec.

7608, July 18, 1956, ch. 629, title I, Sec. 104(a), 70 Stat. 570;

renumbered Sec. 7609 and amended Pub. L. 85-859, title II, Sec.

204(14), (15), Sept. 2, 1958, 72 Stat. 1429, 1430; Pub. L. 91-513,

title III, Sec. 1102(h), Oct. 27, 1970, 84 Stat. 1293; renumbered

Sec. 7611 and amended Pub. L. 94-455, title XII, Sec. 1205(a),

title XIX, Sec. 1904(b)(7)(D), (9)(E), Oct. 4, 1976, 90 Stat. 1699,

1815, 1816; renumbered Sec. 7612, Pub. L. 98-369, div. A, title X,

Sec. 1033(a), July 18, 1984, 98 Stat. 1034; renumbered Sec. 7613,

Pub. L. 105-206, title III, Sec. 3413(a), July 22, 1998, 112 Stat.

751.)

-MISC1-

AMENDMENTS

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1904(b)(7)(D), (9)(E),

struck out pars. (1) and (2) relating to cross references to

wholesale dealers in oleomargarine and wholesale dealers in process

or renovated butter or adulterated butter, respectively, and

redesignated pars. (5) and (6) as (1) and (2), respectively.

1970 - Subsec. (a). Pub. L. 91-513 struck out pars. (3) and (4)

which related to opium, opiates, and coca leaves and to marihuana,

respectively, and which made reference to sections 4702(a), 4705,

4721, and 4773, and to sections 4742, 4753(b), and 4773,

respectively.

1958 - Subsec. (a)(6). Pub. L. 85-859, Sec. 204(15), added par.

(6).

Subsec. (b)(2). Pub. L. 85-859, Sec. 204(15), substituted "with

respect to subtitle E, see section 5557" for "in connection with

industrial alcohol, etc., see sections 5314 and 7302".

Subsec. (b)(3). Pub. L. 85-859, Sec. 204(15), added par. (3).

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-513 effective on first day of seventh

calendar month that begins after Oct. 26, 1970, see section 1105(a)

of Pub. L. 91-513, set out as an Effective Date note under section

951 of Title 21, Food and Drugs.

EFFECTIVE DATE OF 1958 AMENDMENT

Amendment by Pub. L. 85-859 effective Sept. 3, 1958, see section

210(a)(1) of Pub. L. 85-859, set out as an Effective Date note

under section 5001 of this title.

SAVINGS PROVISION

Prosecutions for any violation of law occurring, and civil

seizures or forfeitures and injunctive proceedings commenced, prior

to the effective date of amendment of this section by section 1102

of Pub. L. 91-513 not to be affected or abated by reason thereof,

see section 1103 of Pub. L. 91-513, set out as a note under

sections 171 to 174 of Title 21, Food and Drugs.

-End-

-CITE-

26 USC Subchapter B - General Powers and Duties 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter B - General Powers and Duties

-HEAD-

SUBCHAPTER B - GENERAL POWERS AND DUTIES

-MISC1-

Sec.

7621. Internal revenue districts.

7622. Authority to administer oaths and certify.

7623. Expenses of detection of underpayments and fraud, etc.

7624. Reimbursement to State and local law enforcement

agencies.

AMENDMENTS

1996 - Pub. L. 104-168, title XII, Sec. 1209(b), July 30, 1996,

110 Stat. 1474, substituted "Expenses of detection of underpayments

and fraud, etc." for "Expenses of detection and punishment of

frauds." in item 7623.

1988 - Pub. L. 100-690, title VII, Sec. 7602(d)(1), Nov. 18,

1988, 102 Stat. 4508, added item 7624.

-End-

-CITE-

26 USC Sec. 7621 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter B - General Powers and Duties

-HEAD-

Sec. 7621. Internal revenue districts

-STATUTE-

(a) Establishment and alteration

The President shall establish convenient internal revenue

districts for the purpose of administering the internal revenue

laws. The President may from time to time alter such districts.

(b) Boundaries

For the purpose mentioned in subsection (a), the President may

subdivide any State, or the District of Columbia, or may unite into

one district two or more States.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 904; Pub. L. 86-70, Sec. 22(e),

June 25, 1959, 73 Stat. 146; Pub. L. 94-455, title XIX, Sec.

1906(a)(53), Oct. 4, 1976, 90 Stat. 1832.)

-MISC1-

AMENDMENTS

1976 - Subsec. (b). Pub. L. 94-455 struck out "Territory" after

"any State" and "or a Territory and one or more States" after "two

or more States".

1959 - Subsec. (b). Pub. L. 86-70 substituted "may unite into one

district two or more States or a Territory and one or more States"

for "may unite two or more States or Territories into one

district".

EFFECTIVE DATE OF 1959 AMENDMENT

Amendment by Pub. L. 86-70 effective Jan. 3, 1959, see section

22(i) of Pub. L. 86-70, set out as a note under section 3121 of

this title.

-TRANS-

DELEGATION OF FUNCTIONS

For delegation to Secretary of the Treasury of authority vested

in President by this section, see section 1(g) of Ex. Ord. No.

10289, Sept. 17, 1951, 16 F.R. 9499, as amended, set out as a note

under section 301 of Title 3, The President.

-End-

-CITE-

26 USC Sec. 7622 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter B - General Powers and Duties

-HEAD-

Sec. 7622. Authority to administer oaths and certify

-STATUTE-

(a) Internal revenue personnel

Every officer or employee of the Treasury Department designated

by the Secretary for that purpose is authorized to administer such

oaths or affirmations and to certify to such papers as may be

necessary under the internal revenue laws or regulations made

thereunder.

(b) Others

Any oath or affirmation required or authorized under any internal

revenue law or under any regulations made thereunder may be

administered by any person authorized to administer oaths for

general purposes by the law of the United States, or of any State

or possession of the United States, or of the District of Columbia,

wherein such oath or affirmation is administered. This subsection

shall not be construed as an exclusive enumeration of the persons

who may administer such oaths or affirmations.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 904; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), (c)(2), Oct. 4, 1976, 90 Stat. 1834, 1835.)

-MISC1-

AMENDMENTS

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

out "or his delegate" after "Secretary".

Subsec. (b). Pub. L. 94-455, Sec. 1906(c)(2), struck out

"Territory" after "any State".

-End-

-CITE-

26 USC Sec. 7623 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter B - General Powers and Duties

-HEAD-

Sec. 7623. Expenses of detection of underpayments and fraud, etc.

-STATUTE-

The Secretary, under regulations prescribed by the Secretary, is

authorized to pay such sums as he deems necessary for -

(1) detecting underpayments of tax, and

(2) detecting and bringing to trial and punishment persons

guilty of violating the internal revenue laws or conniving at the

same,

in cases where such expenses are not otherwise provided for by law.

Any amount payable under the preceding sentence shall be paid from

the proceeds of amounts (other than interest) collected by reason

of the information provided, and any amount so collected shall be

available for such payments.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 904; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 104-168,

title XII, Sec. 1209(a), July 30, 1996, 110 Stat. 1473.)

-MISC1-

AMENDMENTS

1996 - Pub. L. 104-168 substituted "of underpayments and fraud,

etc." for "and punishment of frauds" in section catchline and

amended text generally. Prior to amendment, text read as follows:

"The Secretary, under regulations prescribed by the Secretary, is

authorized to pay such sums, not exceeding in the aggregate the sum

appropriated therefor, as he may deem necessary for detecting and

bringing to trial and punishment persons guilty of violating the

internal revenue laws, or conniving at the same, in cases where

such expenses are not otherwise provided for by law."

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

"Secretary" wherever appearing.

EFFECTIVE DATE OF 1996 AMENDMENT

Section 1209(c) of Pub. L. 104-168 provided that: "The amendments

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

the date which is 6 months after the date of the enactment of this

Act [July 30, 1996]."

STUDY OF PAYMENTS MADE FOR DETECTION OF UNDERPAYMENTS AND FRAUD

Pub. L. 105-206, title III, Sec. 3804, July 22, 1998, 112 Stat.

783, provided that: "Not later than 1 year after the date of the

enactment of this Act [July 22, 1998], the Secretary of the

Treasury shall conduct a study and report to Congress on the use of

section 7623 of the Internal Revenue Code of 1986 including -

"(1) an analysis of the present use of such section and the

results of such use; and

"(2) any legislative or administrative recommendations

regarding the provisions of such section and its application."

ANNUAL REPORT TO CONGRESS ON PAYMENTS MADE UNDER THIS SECTION AND

RESULTANT COLLECTIONS

Section 1209(d) of Pub. L. 104-168 provided that: "The Secretary

of the Treasury or his delegate shall submit an annual report to

the Committee on Ways and Means of the House of Representatives and

the Committee on Finance of the Senate on the payments under

section 7623 of the Internal Revenue Code of 1986 during the year

and on the amounts collected for which such payments were made."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 42 section 1395b-5.

-End-

-CITE-

26 USC Sec. 7624 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter B - General Powers and Duties

-HEAD-

Sec. 7624. Reimbursement to State and local law enforcement

agencies

-STATUTE-

(a) Authorization of reimbursement

Whenever a State or local law enforcement agency provides

information to the Internal Revenue Service that substantially

contributes to the recovery of Federal taxes imposed with respect

to illegal drug-related activities (or money laundering in

connection with such activities), such agency may be reimbursed by

the Internal Revenue Service for costs incurred in the

investigation (including but not limited to reasonable expenses,

per diem, salary, and overtime) not to exceed 10 percent of the sum

recovered.

(b) Records; 10 percent limitation

The Internal Revenue Service shall maintain records of the

receipt of information from a contributing agency and shall notify

the agency when monies have been recovered as the result of such

information. Following such notification, the agency shall submit a

statement detailing the investigative costs it incurred. Where more

than 1 State or local agency has given information that

substantially contributes to the recovery of Federal taxes, the

Internal Revenue Service shall equitably allocate investigative

costs among such agencies not to exceed an aggregate amount of 10

percent of the taxes recovered.

(c) No reimbursement where duplicative

No State or local agency may receive reimbursement under this

section if reimbursement has been received by such agency under a

Federal or State forfeiture program or under State revenue laws.

-SOURCE-

(Added Pub. L. 100-690, title VII, Sec. 7602(a), Nov. 18, 1988, 102

Stat. 4507.)

-MISC1-

EFFECTIVE DATE

Section applicable to information first provided more than 90

days after Nov. 18, 1988, see section 7602(e) of Pub. L. 100-690,

set out as an Effective Date of 1988 Amendment note under section

6103 of this title.

REGULATIONS

Section 7602(g) of Pub. L. 100-690 provided that: "The Secretary

of the Treasury shall, not later than 90 days after the date of

enactment of this Act [Nov. 18, 1988], prescribe such rules and

regulations as shall be necessary and proper to carry out the

provisions of this section [enacting section 7624 of this title,

amending sections 6103 and 7809 of this title, and enacting

provisions set out as notes under sections 6103 and 7809 of this

title], including regulations relating to the definition of

information which substantially contributes to the recovery of

Federal taxes and the substantiation of expenses required in order

to receive a reimbursement."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6103, 7809 of this title.

-End-

-CITE-

26 USC [Subchapter C - Repealed] 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

[Subchapter C - Repealed]

-HEAD-

[SUBCHAPTER C - REPEALED]

-End-

-CITE-

26 USC [Sec. 7641 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

[Subchapter C - Repealed]

-HEAD-

[Sec. 7641. Repealed. Pub. L. 94-455, title XIX, Sec. 1906(a)(54),

Oct. 4, 1976, 90 Stat. 1832]

-MISC1-

Section, acts Aug. 16, 1954, ch. 736, 68A Stat. 905; Oct. 27,

1970, Pub. L. 91-513, title III, Sec. 1102(i), 84 Stat. 1293; Oct.

26, 1974, Pub. L. 93-490, Sec. 3(b)(8), 88 Stat. 1467, related to

supervision of operations of every manufacturer of oleomargarine,

process or renovated butter or adulterated butter, or white

phosphorous matches by the officers or employees of the Treasury

Department.

EFFECTIVE DATE OF REPEAL

Repeal 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 an Effective Date of 1976 Amendment note under

section 6013 of this title.

-End-

-CITE-

26 USC Subchapter D - Possessions 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter D - Possessions

-HEAD-

SUBCHAPTER D - POSSESSIONS

-MISC1-

Sec.

7651. Administration and collection of taxes in possessions.

7652. Shipments to the United States.

7653. Shipments from the United States.

7654. Coordination of United States and certain possession

individual income taxes.

7655. Cross references.

AMENDMENTS

1986 - Pub. L. 99-514, title XII, Sec. 1276(b), Oct. 22, 1986,

100 Stat. 2600, substituted "certain possession" for "Guam" in item

7654.

1972 - Pub. L. 92-606, Sec. 1(f)(6), Oct. 31, 1972, 86 Stat.

1497, substituted "Coordination of United States and Guam

individual income taxes" for "Payment to Guam and American Samoa of

proceeds of tax on coconut and palm oil" in item 7654.

-End-

-CITE-

26 USC Sec. 7651 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter D - Possessions

-HEAD-

Sec. 7651. Administration and collection of taxes in possessions

-STATUTE-

Except as otherwise provided in this subchapter, and except as

otherwise provided in section 28(a) of the Revised Organic Act of

the Virgin Islands and section 30 of the Organic Act of Guam

(relating to the covering of the proceeds of certain taxes into the

treasuries of the Virgin Islands and Guam, respectively) -

(1) Applicability of administrative provisions

All provisions of the laws of the United States applicable to

the assessment and collection of any tax imposed by this title or

of any other liability arising under this title (including

penalties) shall, in respect of such tax or liability, extend to

and be applicable in any possession of the United States in the

same manner and to the same extent as if such possession were a

State, and as if the term "United States" when used in a

geographical sense included such possession.

(2) Tax imposed in possession

In the case of any tax which is imposed by this title in any

possession of the United States -

(A) Internal revenue collections

Such tax shall be collected under the direction of the

Secretary, and shall be paid into the Treasury of the United

States as internal revenue collections; and

(B) Applicable laws

All provisions of the laws of the United States applicable to

the administration, collection, and enforcement of such tax

(including penalties) shall, in respect of such tax, extend to

and be applicable in such possession of the United States in

the same manner and to the same extent as if such possession

were a State, and as if the term "United States" when used in a

geographical sense included such possession.

(3) Other laws relating to possessions

This section shall apply notwithstanding any other provision of

law relating to any possession of the United States.

(4) Canal Zone

For purposes of this section, the term "possession of the

United States" includes the Canal Zone.

(5) Virgin Islands

(A) For purposes of this section, the reference in section

28(a) of the Revised Organic Act of the Virgin Islands to "any

tax specified in section 3811 of the Internal Revenue Code" shall

be deemed to refer to any tax imposed by chapter 2 or by chapter

21.

(B) For purposes of this title, section 28(a) of the Revised

Organic Act of the Virgin Islands shall be effective as if such

section 28(a) had been enacted before the enactment of this title

and such section 28(a) shall have no effect on the amount of

income tax liability required to be paid by any person to the

United States.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 906; Pub. L. 91-513, title III,

Sec. 1102(j), Oct. 27, 1970, 84 Stat. 1293; Pub. L. 94-455, title

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

98-369, div. A, title I, Sec. 130(c), title VIII, Sec. 801(d)(9),

July 18, 1984, 98 Stat. 661, 997; Pub. L. 99-514, title XII, Sec.

1275(b), Oct. 22, 1986, 100 Stat. 2598.)

-REFTEXT-

REFERENCES IN TEXT

Section 28(a) of the Revised Organic Act of the Virgin Islands,

referred to in pars. (1) and (5), is classified to section 1642 of

Title 48, Territories and Insular Possessions.

Section 30 of the Organic Act of Guam, referred to in par. (1),

is classified to section 1421h of Title 48.

For definition of Canal Zone, referred to in par. (4), see

section 3602(b) of Title 22, Foreign Relations and Intercourse.

-MISC1-

AMENDMENTS

1986 - Par. (5)(B). Pub. L. 99-514 amended subpar. (B) generally.

Prior to amendment, subpar. (B) read as follows: "For purposes of

this title (other than section 881(b)(1) or subpart C of part III

of subchapter N of chapter 1), section 28(a) of the Revised Organic

Act of the Virgin Islands shall be effective as if such section had

been enacted subsequent to the enactment of this title."

1984 - Par. (5)(B). Pub. L. 98-369, Sec. 801(d)(9), inserted "or

subpart C of part III of subchapter N of chapter 1".

Pub. L. 98-369, Sec. 130(c), inserted "(other than section

881(b)(1))".

1976 - Par. (2)(A). Pub. L. 94-455 struck out "or his delegate"

after "Secretary".

1970 - Pub. L. 91-513 struck out reference to exceptions provided

for in sections 4705(b), 4735, and 4762 (relating to taxes on

narcotic drugs and marihuana) in provisions preceding par. (1).

EFFECTIVE DATE OF 1986 AMENDMENT

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

after Dec. 31, 1986, with certain exceptions and qualifications,

see section 1277 of Pub. L. 99-514, set out as a note under section

931 of this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by section 130(c) of Pub. L. 98-369 applicable to

payments made after Mar. 1, 1984, in taxable years ending after

such date, see section 130(d) of Pub. L. 98-369, set out as a note

under section 881 of this title.

Amendment by section 801(d)(9) of Pub. L. 98-369 applicable to

transactions after Dec. 31, 1984, in taxable years ending after

such date, see section 805(a)(1) of Pub. L. 98-369, as amended, set

out as a note under section 245 of this title.

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-513 effective on first day of seventh

calendar month that begins after Oct. 26, 1970, see section 1105(a)

of Pub. L. 91-513, set out as an Effective Date note under section

951 of Title 21, Food and Drugs.

SAVINGS PROVISION

Prosecutions for any violation of law occurring, and civil

seizures or forfeitures and injunctive proceedings commenced, prior

to the effective date of amendment of this section by section 1102

of Pub. L. 91-513 not to be affected or abated by reason thereof,

see section 1103 of Pub. L. 91-513, set out as a note under

sections 171 to 174 of Title 21, Food and Drugs.

COMPENSATION TO GUAM AND VIRGIN ISLANDS FOR UNEXPECTED REVENUE

LOSSES OCCASIONED BY TAX REDUCTION ACT OF 1975 AND TAX REFORM ACT

OF 1976

Pub. L. 95-134, title IV, Sec. 402, Oct. 15, 1977, 91 Stat. 1163,

provided that: "In order to compensate the territories of Guam and

the Virgin Islands for unexpected revenue losses occasioned by the

Tax Reduction Act of 1975 [Pub. L. 94-12, Mar. 29, 1975, 89 Stat.

26, see Tables] and the Tax Reform Act of 1976 [Pub. L. 94-455,

Oct. 4, 1976, 90 Stat. 1525, see Tables] there is hereby authorized

to be appropriated to the Secretary for grants to the government of

Guam not to exceed $15,000,000 and after October 1, 1977, for

grants to the government of the Virgin Islands not to exceed

$14,000,000, such sums being in addition to those previously

authorized for such purposes."

PAYMENTS TO GOVERNMENT OF AMERICAN SAMOA, GUAM, AND THE VIRGIN

ISLANDS

Pub. L. 95-30, title IV, Sec. 407, May 23, 1977, 91 Stat. 156,

provided that:

"(a) The Secretary of the Treasury is authorized to make separate

payments to the government of American Samoa, the government of

Guam, and the government of the Virgin Islands. The payment to the

government of a particular possession shall be in an amount equal

to the loss to that possession with respect to tax returns for the

first taxable year beginning after December 31, 1976, by reason of

sections 101 and 102 of this Act [amending sections 1, 3, 21, 42,

57, 63, 143, 161, 172, 211, 402, 441, 443, 511, 584, 613A, 641,

642, 667, 703, 861, 862, 873, 904, 911, 931, 1034, 1211, 1302,

6014, 6212, 6504, and 6654 of this title and repealing sections 36,

141, 142, 144 and 145 of this title]. Such amount shall be

determined by the Secretary of the Treasury upon certification to

the Secretary by the United States Government Comptrollers for Guam

and the Virgin Islands.

"(b) There are hereby authorized to be appropriated, out of any

funds in the Treasury not otherwise appropriated, such sums as may

be necessary to carry out the provisions of this section."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 1403, 7652, 7809 of this

title.

-End-

-CITE-

26 USC Sec. 7652 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter D - Possessions

-HEAD-

Sec. 7652. Shipments to the United States

-STATUTE-

(a) Puerto Rico

(1) Rate of tax

Except as provided in section 5314, articles of merchandise of

Puerto Rican manufacture coming into the United States and

withdrawn for consumption or sale shall be subject to a tax equal

to the internal revenue tax imposed in the United States upon the

like articles of merchandise of domestic manufacture.

(2) Payment of tax

The Secretary shall by regulations prescribe the mode and time

for payment and collection of the tax described in paragraph (1),

including any discretionary method described in section 6302(b)

and (c). Such regulations shall authorize the payment of such tax

before shipment from Puerto Rico, and the provisions of section

7651(2)(B) shall be applicable to the payment and collection of

such tax in Puerto Rico.

(3) Deposit of internal revenue collections

All taxes collected under the internal revenue laws of the

United States on articles produced in Puerto Rico and transported

to the United States (less the estimated amount necessary for

payment of refunds and drawbacks), or consumed in the island,

shall be covered into the treasury of Puerto Rico.

(b) Virgin Islands

(1) Taxes imposed in the United States

Except as provided in section 5314, there shall be imposed in

the United States, upon articles coming into the United States

from the Virgin Islands, a tax equal to the internal revenue tax

imposed in the United States upon like articles of domestic

manufacture.

(2) Exemption from tax imposed in the Virgin Islands

Such articles shipped from such islands to the United States

shall be exempt from the payment of any tax imposed by the

internal revenue laws of such islands.

(3) Disposition of internal revenue collections

The Secretary shall determine the amount of all taxes imposed

by, and collected under the internal revenue laws of the United

States on articles produced in the Virgin Islands and transported

to the United States. The amount so determined less 1 percent and

less the estimated amount of refunds or credits shall be subject

to disposition as follows:

(A) The payment of an estimated amount shall be made to the

government of the Virgin Islands before the commencement of

each fiscal year as set forth in section 4(c)(2) of the Act

entitled "An Act to authorize appropriations for certain

insular areas of the United States, and for other purposes",

approved August 18, 1978 (48 U.S.C. 1645), as in effect on the

date of the enactment of the Trade and Development Act of 2000.

The payment so made shall constitute a separate fund in the

treasury of the Virgin Islands and may be expended as the

legislature may determine.

(B) Any amounts remaining shall be deposited in the Treasury

of the United States as miscellaneous receipts.

If at the end of any fiscal year the total of the Federal

contribution made under subparagraph (A) with respect to the four

calendar quarters immediately preceding the beginning of that

fiscal year has not been obligated or expended for an approved

purpose, the balance shall continue available for expenditure

during any succeeding fiscal year, but only for emergency relief

purposes and essential public projects. The aggregate amount of

moneys available for expenditure for emergency relief purposes

and essential public projects only shall not exceed the sum of

$5,000,000 at the end of any fiscal year. Any unobligated or

unexpended balance of the Federal contribution remaining at the

end of a fiscal year which would cause the moneys available for

emergency relief purposes and essential public projects only to

exceed the sum of $5,000,000 shall thereupon be transferred and

paid over to the Treasury of the United States as miscellaneous

receipts.

(c) Articles containing distilled spirits

For purposes of subsections (a)(3) and (b)(3), any article

containing distilled spirits shall in no event be treated as

produced in Puerto Rico or the Virgin Islands unless at least 92

percent of the alcoholic content in such article is attributable to

rum.

(d) Articles other than articles containing distilled spirits

For purposes of subsections (a)(3) and (b)(3) -

(1) Value added requirement for Puerto Rico

Any article, other than an article containing distilled

spirits, shall in no event be treated as produced in Puerto Rico

unless the sum of -

(A) the cost or value of the materials produced in Puerto

Rico, plus

(B) the direct costs of processing operations performed in

Puerto Rico,

equals or exceeds 50 percent of the value of such article as of

the time it is brought into the United States.

(2) Prohibition of Federal excise tax subsidies

(A) In general

No amount shall be transferred under subsection (a)(3) or

(b)(3) in respect of taxes imposed on any article, other than

an article containing distilled spirits, if the Secretary

determines that a Federal excise tax subsidy was provided by

Puerto Rico or the Virgin Islands (as the case may be) with

respect to such article.

(B) Federal excise tax subsidy

For purposes of this paragraph, the term "Federal excise tax

subsidy" means any subsidy -

(i) of a kind different from, or

(ii) in an amount per value or volume of production greater

than,

the subsidy which Puerto Rico or the Virgin Islands offers

generally to industries producing articles not subject to

Federal excise taxes.

(3) Direct costs of processing operations

For purposes of this subsection, the term "direct cost of

processing operations" has the same meaning as when used in

section 213 of the Caribbean Basin Economic Recovery Act.

(e) Shipments of rum to the United States

(1) Excise taxes on rum covered into treasuries of Puerto Rico

and Virgin Islands

All taxes collected under section 5001(a)(1) on rum imported

into the United States (less the estimated amount necessary for

payment of refunds and drawbacks) shall be covered into the

treasuries of Puerto Rico and the Virgin Islands.

(2) Secretary prescribes formula

The Secretary shall, from time to time, prescribe by regulation

a formula for the division of such tax collections between Puerto

Rico and the Virgin Islands and the timing and methods for

transferring such tax collections.

(3) Rum defined

For purposes of this subsection, the term "rum" means any

article classified under subheading 2208.40.00 of the Harmonized

Tariff Schedule of the United States (19 U.S.C. 1202).

(4) Coordination with subsections (a) and (b)

Paragraph (1) shall not apply with respect to any rum subject

to tax under subsection (a) or (b).

(f) Limitation on cover over of tax on distilled spirits

For purposes of this section, with respect to taxes imposed under

section 5001 or this section on distilled spirits, the amount

covered into the treasuries of Puerto Rico and the Virgin Islands

shall not exceed the lesser of the rate of -

(1) $10.50 ($13.25 in the case of distilled spirits brought

into the United States after June 30, 1999, and before January 1,

2004), or

(2) the tax imposed under section 5001(a)(1), on each proof

gallon.

(g) Drawback for medicinal alcohol, etc.

In the case of medicines, medicinal preparations, food products,

flavors, flavoring extracts, or perfume containing distilled

spirits, which are unfit for beverage purposes and which are

brought into the United States from Puerto Rico or the Virgin

Islands -

(1) subpart F of part II of subchapter A of chapter 51 shall be

applied as if -

(A) the use and tax determination described in section

5131(a) had occurred in the United States by a United States

person at the time the article is brought into the United

States, and

(B) the rate of tax were the rate applicable under subsection

(f) of this section, and

(2) no amount shall be covered into the treasuries of Puerto

Rico or the Virgin Islands.

(h) Manner of cover over of tax must be derived from this title

No amount shall be covered into the treasury of Puerto Rico or

the Virgin Islands with respect to taxes for which cover over is

provided under this section unless made in the manner specified in

this section without regard to -

(1) any provision of law which is not contained in this title

or in a revenue Act; and

(2) whether such provision of law is a subsequently enacted

provision or directly or indirectly seeks to waive the

application of this subsection.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 907; Pub. L. 85-859, title II,

Sec. 204(17), (18), Sept. 2, 1958, 72 Stat. 1430; Pub. L. 89-44,

title VIII, Sec. 808(b)(3), June 21, 1965, 79 Stat. 164; Pub. L.

94-202, Sec. 10(a), Jan. 2, 1976, 89 Stat. 1141; Pub. L. 94-455,

title XIX, Sec. 1906(a)(55), (b) (13)(A), Oct. 4, 1976, 90 Stat.

1832, 1834; Pub. L. 98-67, title II, Sec. 221(a), Aug. 5, 1983, 97

Stat. 395; Pub. L. 98-213, Sec. 5(c), Dec. 8, 1983, 97 Stat. 1460;

Pub. L. 98-369, div. B, title VI, Secs. 2681(a), 2682(a), July 18,

1984, 98 Stat. 1172, 1174; Pub. L. 99-514, title XVIII, Sec.

1879(i)(1), Oct. 22, 1986, 100 Stat. 2907; Pub. L. 100-418, title

I, Sec. 1214(p)(1), Aug. 23, 1988, 102 Stat. 1159; Pub. L. 103-66,

title XIII, Sec. 13227(e), Aug. 10, 1993, 107 Stat. 494; Pub. L.

103-465, title I, Sec. 136(b), Dec. 8, 1994, 108 Stat. 4841; Pub.

L. 106-170, title V, Sec. 512(a), Dec. 17, 1999, 113 Stat. 1924;

Pub. L. 106-200, title VI, Sec. 602(b), (c), May 18, 2000, 114

Stat. 305, 306; Pub. L. 107-147, title VI, Sec. 609(a), Mar. 9,

2002, 116 Stat. 60.)

-REFTEXT-

REFERENCES IN TEXT

The date of the enactment of the Trade and Development Act of

2000, referred to in subsec. (b)(3)(A), is the date of enactment of

Pub. L. 106-200, which was approved May 18, 2000.

Section 213 of the Caribbean Basin Economic Recovery Act,

referred to in subsec. (d)(3), is classified to section 2703 of

Title 19, Customs Duties.

The Harmonized Tariff Schedule of the United States (19 U.S.C.

1202), referred to in subsec. (e)(3), is not set out in the Code.

See Publication of Harmonized Tariff Schedule note set out under

section 1202 of Title 19.

-MISC1-

AMENDMENTS

2002 - Subsec. (f)(1). Pub. L. 107-147 substituted "January 1,

2004" for "January 1, 2002".

2000 - Subsec. (b)(3). Pub. L. 106-200, Sec. 602(b), amended

generally par. (3) heading and text of par. (3) introductory

provisions and subpar. (A). Prior to amendment, text of par. (3)

introductory provisions and subpar. (A) read as follows: "Beginning

with the calendar quarter ending September 30, 1975, and quarterly

thereafter, the Secretary shall determine the amount of all taxes

imposed by, and collected during the quarter under, the internal

revenue laws of the United States on articles produced in the

Virgin Islands and transported to the United States. The amount so

determined less 1 percent and less the estimated amount of refunds

or credits shall be subject to disposition as follows:

"(A) There shall be transferred and paid over, as soon as

practicable after the close of the quarter, to the Government of

the Virgin Islands from the amounts so determined a sum equal to

the total amount of the revenue collected by the Government of

the Virgin Islands during the quarter, as certified by the

Government Comptroller of the Virgin Islands. The moneys so

transferred and paid over shall constitute a separate fund in the

treasury of the Virgin Islands and may be expended as the

legislature may determine."

Subsec. (h). Pub. L. 106-200, Sec. 602(c), added subsec. (h).

1999 - Subsec. (f)(1). Pub. L. 106-170 amended par. (1)

generally. Prior to amendment, par. (1) read as follows: "$10.50

($11.30 in the case of distilled spirits brought into the United

States during the 5-year period beginning on October 1, 1993), or."

1994 - Subsec. (g). Pub. L. 103-465 substituted "flavoring

extracts, or perfume" for "or flavoring extracts" in introductory

provisions.

1993 - Subsec. (f)(1). Pub. L. 103-66 amended par. (1) generally,

substituting present provisions for "$10.50, or".

1988 - Subsec. (e)(3). Pub. L. 100-418 substituted "subheading

2208.40.00 of the Harmonized Tariff Schedule of the United States"

for "item 169.13 or 169.14 of the Tariff Schedules of the United

States".

1986 - Subsec. (g). Pub. L. 99-514 added subsec. (g).

1984 - Subsecs. (c)-(e). Pub. L. 98-369, Sec. 2681(a), added

subsecs. (c) and (d) and redesignated former subsec. (c) as (e).

Subsec. (f). Pub. L. 98-369, Sec. 2682(a), added subsec. (f).

1983 - Subsec. (b)(3). Pub. L. 98-213, Sec. 5(c), amended

language of Pub. L. 94-455, Sec. 1906(a)(55). See 1976 Amendment

note below.

Subsec. (c). Pub. L. 98-67 added subsec. (c).

1976 - Subsec. (a)(2). Pub. L. 94-455, Sec. 1906(b)(13)(A),

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

Subsec. (b)(3). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out

"or his delegate" after "Secretary" in provisions following subpar.

(B).

Pub. L. 94-455, Sec. 1906(a)(55)(B), as amended by Pub. L.

98-213, Sec. 5(c)(1), substituted "emergency relief purposes and

essential public projects" for "emergency relief purposes and

essential public projects, with the prior approval of the President

or his designated representative" in provisions following subpar.

(B). Prior to amendment by Pub. L. 98-213, the latter phrase had

been substituted for "approved emergency relief purposes and

essential public projects as provided in subparagraph (B)".

Pub. L. 94-455, Sec. 1906(a)(55)(C), struck out "including

payments under subparagraph (B)" after "public projects only" in

provisions following subpar. (B).

Subsec. (b)(3)(A). Pub. L. 94-455, Sec. 1906(a)(55)(D), as added

by Pub. L. 98-213, Sec. 5(c)(2), struck out proviso after

"determine" requiring approval of the President or his designated

representative before such moneys may be obligated or expended.

Subsec. (b)(3)(B), (C). Pub. L. 94-455, Sec. 1906(a)(55)(A),

redesignated subpar. (C) as (B). Former subpar. (B) relating to

disposition of internal revenue collections in Virgin Islands for

fiscal years ending June 30, 1955 and 1956 was struck out.

Pub. L. 94-202 substituted "calendar quarter ending September 30,

1975, and quarterly" for "fiscal year ending June 30, 1954, and

annually" and "quarter" for "fiscal year" in provisions preceding

subpar. (A), substituted "paid over, as soon as practicable after

the close of the quarter," for "paid over" and "quarter" for

"fiscal year" in subpar. (A), and substituted "with respect to the

four calendar quarters immediately preceding the beginning" for "at

the beginning" in provisions following subpar. (C).

1965 - Subsec. (a)(3). Pub. L. 89-44 inserted "(less the

estimated amount necessary for payment of refunds and drawbacks)"

after "transported to the United States".

1958 - Subsec. (a)(1). Pub. L. 85-859, Sec. 204(17), substituted

"section 5314" for "section 5318".

Subsec. (b)(1). Pub. L. 85-859, Sec. 204(18), substituted

"section 5314" for "section 5318".

EFFECTIVE DATE OF 2002 AMENDMENT

Pub. L. 107-147, title VI, Sec. 609(b), Mar. 9, 2002, 116 Stat.

60, provided that: "The amendment made by subsection (a) [amending

this section] shall apply to articles brought into the United

States after December 31, 2001."

EFFECTIVE DATE OF 2000 AMENDMENT

Pub. L. 106-200, title VI, Sec. 602(d), May 18, 2000, 114 Stat.

306, provided that: "The amendments made by this section [amending

this section and provisions set out as a note under this section]

shall apply with respect to transfers or payments made after the

date of the enactment of this Act [May 18, 2000]."

EFFECTIVE DATE OF 1999 AMENDMENT

Pub. L. 106-170, title V, Sec. 512(c), Dec. 17, 1999, 113 Stat.

1925, provided that: "The amendment made by subsection (a)

[amending this section] shall take effect on July 1, 1999."

EFFECTIVE DATE OF 1994 AMENDMENT

Amendment by Pub. L. 103-465 effective Jan. 1, 1995, see section

136(d) of Pub. L. 103-465, set out as a note under section 5001 of

this title.

EFFECTIVE DATE OF 1993 AMENDMENT

Amendment by Pub. L. 103-66 effective Oct. 1, 1993, see section

13227(f) of Pub. L. 103-66, set out as a note under section 56 of

this title.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-418 effective Jan. 1, 1989, and

applicable with respect to articles entered on or after such date,

see section 1217(b)(1) of Pub. L. 100-418, set out as an Effective

Date note under section 3001 of Title 19, Customs Duties.

EFFECTIVE DATE OF 1986 AMENDMENT

Section 1879(i)(2) of Pub. L. 99-514 provided that: "The

amendment made by paragraph (1) [amending this section] shall apply

to articles brought into the United States after the date of the

enactment of this Act [Oct. 22, 1986]."

EFFECTIVE DATE OF 1984 AMENDMENT

Section 2681(b) of Pub. L. 98-369, as amended by Pub. L. 99-514,

Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(1) In general. - Except as provided in paragraph (2), the

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

apply with respect to articles brought into the United States on or

after March 1, 1984.

"(2) Exception for puerto rico for periods before january 1,

1985. -

"(A) In general. - Subject to the limitations of subparagraphs

(B) and (C), the amendments made by subsection (a) [amending this

section] shall not apply with respect to articles containing

distilled spirits brought into the United States from Puerto Rico

after February 29, 1984, and before January 1, 1985.

"(B) $130,000,000 limitation. - In the case of such articles

brought into the United States after February 29, 1984, and

before July 1, 1984, the aggregate amount payable to Puerto Rico

by reason of subparagraph (A) shall not exceed the excess of -

"(i) $130,000,000, over

"(ii) the aggregate amount payable to Puerto Rico under

section 7652(a) of the Internal Revenue Code of 1986 [formerly

I.R.C. 1954] with respect to such articles which were brought

into the United States after June 30, 1983, and before March 1,

1984, and which would not meet the requirements of section

7652(c) of such Code.

"(C) $75,000,000 limitation. - The aggregate amount payable to

Puerto Rico by reason of subparagraph (A) shall not exceed

$75,000,000 in the case of articles -

"(i) brought into the United States after June 30, 1984, and

before January 1, 1985,

"(ii) which would not meet the requirements of section

7652(c) of such Code,

"(iii) which have been redistilled in Puerto Rico, and

"(iv) which do not contain distilled spirits derived from

cane.

"(3) Limitation on incentive payments to united states

distillers. -

"(A) In general. - In the case of articles to which this

paragraph applies, the aggregate amount of incentive payments

paid to any United States distiller with respect to such articles

shall not exceed the limitation described in subparagraph (C).

"(B) Articles to which paragraph applies. - This paragraph

shall apply to any article containing distilled spirits described

in clauses (i) through (iv) of paragraph (2)(C).

"(C) Limitation. -

"(i) In general. - The limitation described in this

subparagraph is $1,500,000.

"(ii) Special rule. - The limitation described in this

subparagraph shall be zero with respect to any distiller who

was not entitled to or receiving incentive payments as of March

1, 1984.

"(D) Payments in excess of limitation. - If any United States

distiller receives any incentive payment with respect to articles

to which this paragraph applies in excess of the limitation

described in subparagraph (C), such distiller shall pay to the

United States the total amount of such incentive payments with

respect to such articles in the same manner, and subject to the

same penalties, as if such amount were tax due and payable under

section 5001 of such Code on the date such payments were

received.

"(E) Incentive payments. -

"(i) In general. - For purposes of this paragraph, the term

'incentive payment' means any payment made directly or

indirectly by the commonwealth of Puerto Rico to any United

States distiller as an incentive to engage in redistillation

operations.

"(ii) Transportation payments excluded. - Such term shall not

include any payment of a direct cost of transportation to or

from Puerto Rico with respect to any article to which this

paragraph applies."

Section 2682(b) of Pub. L. 98-369 provided that "The amendment

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

articles containing distilled spirits brought into the United

States after September 30, 1985."

EFFECTIVE DATE OF 1983 AMENDMENT

Section 221(b) of Pub. L. 98-67 provided that: "The amendment

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

articles imported into the United States after June 30, 1983."

EFFECTIVE DATE OF 1976 AMENDMENTS

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.

Section 10(b) of Pub. L. 94-202 provided that: "The amendments

made by paragraphs (1) and (2) of subsection (a) [amending this

section] shall apply with respect to all taxes imposed by, and

collected after June 30, 1975, under, the internal revenue laws of

the United States on articles produced in the Virgin Islands and

transported to the United States."

EFFECTIVE DATE OF 1965 AMENDMENT

Amendment by Pub. L. 89-44 effective July 1, 1965, see section

808(d)(1) of Pub. L. 89-44, set out as a note under section 5702 of

this title.

EFFECTIVE DATE OF 1958 AMENDMENT

Amendment by Pub. L. 85-859 effective July 1, 1959, see section

210(a)(1) of Pub. L. 85-859, set out as an Effective Date note

under section 5001 of this title.

SPECIAL COVER OVER TRANSFER RULES

Pub. L. 106-170, title V, Sec. 512(b), Dec. 17, 1999, 113 Stat.

1924, as amended by Pub. L. 106-200, Sec. 602(a), May 18, 2000, 114

Stat. 305, provided that: "Notwithstanding section 7652 of the

Internal Revenue Code of 1986, the following rules shall apply with

respect to any transfer before the first day of the month within

which the date of the enactment of the Trade and Development Act of

2000 [May 18, 2000] occurs, of amounts relating to the increase in

the cover over of taxes by reason of the amendment made by

subsection (a) [amending this section]:

"(1) Initial transfer of incremental increase in cover over. -

The Secretary of the Treasury shall, within 15 days after the

date of the enactment of this Act [Dec. 17, 1999], transfer an

amount equal to the lesser of -

"(A) the amount of such increase otherwise required to be

covered over after June 30, 1999, and before the date of the

enactment of this Act; or

"(B) $20,000,000.

"(2) Second transfer of incremental increase in cover over

attributable to periods before resumption of regular payments. -

The Secretary of the Treasury shall transfer on the first payment

date after the date of the enactment of the Trade and Development

Act of 2000 [May 18, 2000] an amount equal to the excess of -

"(A) the amount of such increase otherwise required to be

covered over after June 30, 1999, and before the first day of

the month within which such date of enactment occurs, over

"(B) the amount of the transfer described in paragraph (1)."

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.

PAYMENT TO PUERTO RICO OR VIRGIN ISLANDS OF AMOUNTS WITH RESPECT TO

MEDICINES, ETC. UNFIT FOR BEVERAGE PURPOSES

Section 1879(i)(3) of Pub. L. 99-514 provided that:

"(A) Section 7652 of the Internal Revenue Code of 1954 [now 1986]

(other than subsection (f) thereof) shall not prevent the payment

to Puerto Rico or the Virgin Islands of amounts with respect to

medicines, medicinal preparations, food products, flavors, or

flavoring extracts containing distilled spirits, which are unfit

for beverage purposes and which are brought into the United States

from Puerto Rico or the Virgin Islands on or before the date of the

enactment of this Act [Oct. 22, 1986].

"(B) With respect to articles brought into the United States

after September 27, 1985, subparagraph (A) shall apply only if the

Secretary of the Treasury or his delegate is satisfied that the

amounts paid to Puerto Rico or the Virgin Islands under

subparagraph (A) are being repaid to the proper persons who used

the distilled spirits in such articles."

-EXEC-

EX. ORD. NO. 10602. SECRETARY OF THE INTERIOR AS REPRESENTATIVE OF

PRESIDENT

Ex. Ord. No. 10602, Mar. 24, 1955, 20 F.R. 1795, provided: "By

virtue of the authority vested in me by section 7652(b)(3) of the

Internal Revenue Code of 1954 [now I.R.C. 1986] (Public Law 591,

83rd Congress, 68A Stat. 907), I hereby designate the Secretary of

the Interior as the representative of the President to approve the

obligation and expenditure by the government of the Virgin Islands

of the moneys referred to in the said section 7652(b)(3)."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4132, 4612, 4662, 4672,

4682, 5001, 5008, 5010, 5061, 5314, 5702, 5703, 5705, 7809 of this

title; title 48 sections 1574a, 1574b, 1574c, 1644.

-End-

-CITE-

26 USC Sec. 7653 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter D - Possessions

-HEAD-

Sec. 7653. Shipments from the United States

-STATUTE-

(a) Tax imposed

(1) Puerto Rico

All articles of merchandise of United States manufacture coming

into Puerto Rico shall be entered at the port of entry upon

payment of a tax equal in rate and amount to the internal revenue

tax imposed in Puerto Rico upon the like articles of Puerto Rican

manufacture.

(2) Virgin Islands

There shall be imposed in the Virgin Islands upon articles

imported from the United States a tax equal to the internal

revenue tax imposed in such islands upon like articles there

manufactured.

(b) Exemption from tax imposed in the United States

Articles, goods, wares, or merchandise going into Puerto Rico,

the Virgin Islands, Guam, and American Samoa from the United States

shall be exempted from the payment of any tax imposed by the

internal revenue laws of the United States.

(c) Drawback of tax paid in the United States

All provisions of law for the allowance of drawback of internal

revenue tax on articles exported from the United States are, so far

as applicable, extended to like articles upon which an internal

revenue tax has been paid when shipped from the United States to

Puerto Rico, the Virgin Islands, Guam, or American Samoa.

(d) Cross reference

For the disposition of the proceeds of all taxes collected

under the internal revenue laws of the United States on

articles produced in Guam and transported into the United

States or its possessions, or consumed in Guam, see the Act of

August 1, 1950 (48 U.S.C. 1421h).

-SOURCE-

(Aug. 16, 1954, ch. 736 68A Stat. 908; Pub. L. 86-70, Sec. 22(f),

June 25, 1959, 73 Stat. 146; Pub. L. 86-624, Sec. 18(h), July 12,

1960, 74 Stat. 416; Pub. L. 94-455, title XIX, Sec. 1906(a)(56),

Oct. 4, 1976, 90 Stat. 1832.)

-REFTEXT-

REFERENCES IN TEXT

Act of August 1, 1950, referred to in subsec. (d), is act Aug. 1,

1950, ch. 512, 64 Stat. 384, as amended, known as the Organic Act

of Guam, which is classified principally to chapter 8A (Sec. 1421

et seq.) of Title 48, Territories and Insular Possessions. For

complete classification of this Act to the Code, see Short Title

note set out under section 1421 of Title 48 and Tables.

-MISC1-

AMENDMENTS

1976 - Subsec. (d). Pub. L. 94-455 struck out "ch. 512, 64 Stat.

392, section 30" after "August 1, 1950".

1960 - Subsec. (d). Pub. L. 86-624 substituted "or its

possessions" for ", its possessions or the Territory of Hawaii".

1959 - Subsec. (d). Pub. L. 86-70 substituted "its possessions or

the Territory of Hawaii" for "its Territories or possessions".

EFFECTIVE DATE OF 1960 AMENDMENT

Amendment by Pub. L. 86-624 effective Aug. 21, 1959, see section

18(k) of Pub. L. 86-624, set out as a note under section 3121 of

this title.

EFFECTIVE DATE OF 1959 AMENDMENT

Amendment by Pub. L. 86-70 effective Jan. 3, 1959, see section

22(i) of Pub. L. 86-70, set out as a note under section 3121 of

this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 5003 of this title.

-End-

-CITE-

26 USC Sec. 7654 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter D - Possessions

-HEAD-

Sec. 7654. Coordination of United States and certain possession

individual income taxes

-STATUTE-

(a) General rule

The net collection of taxes imposed by chapter 1 for each taxable

year with respect to an individual to whom section 931 or 932(c)

applies shall be covered into the Treasury of the specified

possession of which such individual is a bona fide resident.

(b) Definition and special rule

For purposes of this section -

(1) Net collections

In determining net collections for a taxable year, an

appropriate adjustment shall be made for credits allowed against

the tax liability and refunds made of income taxes for the

taxable year.

(2) Specified possession

The term "specified possession" means Guam, American Samoa, the

Northern Mariana Islands, and the Virgin Islands.

(c) Transfers

The transfers of funds between the United States and any

specified possession required by this section shall be made not

less frequently than annually.

(d) Federal personnel

In addition to the amount determined under subsection (a), the

United States shall pay to each specified possession at such times

and in such manner as determined by the Secretary -

(1) the amount of the taxes deducted and withheld by the United

States under chapter 24 with respect to compensation paid to

members of the Armed Forces who are stationed in such possession

but who have no income tax liability to such possession with

respect to such compensation by reason of the Soldiers' and

Sailors' Civil Relief Act (50 App. U.S.C. 501 et seq.), and

(2) the amount of the taxes deducted and withheld under chapter

24 with respect to amounts paid for services performed as an

employee of the United States (or any agency thereof) in a

specified possession with respect to an individual unless section

931 or 932(c) applies.

(e) Regulations

The Secretary shall prescribe such regulations as may be

necessary to carry out the provisions of this section and sections

931 and 932, including regulations prohibiting the rebate of taxes

covered over which are allocable to United States source income and

prescribing the information which the individuals to whom such

sections may apply shall furnish to the Secretary.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 909; Pub. L. 92-606, Sec. 1(b),

Oct. 31, 1972, 86 Stat. 1495; Pub. L. 94-455, title XIX, Sec.

1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97-248, title

III, Secs. 307(a)(16), 308(a), Sept. 3, 1982, 96 Stat. 590, 591;

Pub. L. 98-67, title I, Sec. 102(a), Aug. 5, 1983, 97 Stat. 369;

Pub. L. 99-514, title XII, Sec. 1276(a), Oct. 22, 1986, 100 Stat.

2599; Pub. L. 100-647, title I, Sec. 1012(y), Nov. 10, 1988, 102

Stat. 3530.)

-REFTEXT-

REFERENCES IN TEXT

The Soldiers' and Sailors' Civil Relief Act, referred to in

subsec. (d)(1), is act Oct. 17, 1940, ch. 888, 54 Stat. 1178, as

amended, which is classified to section 501 et seq. of the Appendix

to Title 50, War and National Defense. For complete classification

of this Act to the Code, see section 501 of the Appendix to Title

50 and Tables.

-MISC1-

AMENDMENTS

1988 - Subsec. (a). Pub. L. 100-647 substituted "an individual to

whom" for "an individual to which".

1986 - Pub. L. 99-514 amended section generally, substituting

provisions relating to coordination of United States and certain

possession individual income taxes for provisions relating to

coordination of United States and Guam individual income taxes.

1983 - Subsec. (d). Pub. L. 98-67 repealed amendments made by

Pub. L. 97-248. See 1982 Amendment note below.

1982 - Subsec. (d). Pub. L. 97-248 provided that, applicable to

payments of interest, dividends, and patronage dividends paid or

credited after June 30, 1983, subsec. (d) is amended by inserting

"subchapter A of" before "chapter 24". Section 102(a), (b) of Pub.

L. 98-67, title I, Aug. 5, 1983, 97 Stat. 369, repealed subtitle A

(Secs. 301-308) of title III of Pub. L. 97-248 as of the close of

June 30, 1983, and provided that the Internal Revenue Code of 1954

[now 1986] [this title] shall be applied and administered (subject

to certain exceptions) as if such subtitle A (and the amendments

made by such subtitle A) had not been enacted.

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

delegate" after "Secretary" wherever appearing.

1972 - Pub. L. 92-606 substituted provisions relating to

individual income taxes in Guam and their sharing by the United

States and Guam, for provisions relating to payment to Guam and

American Samoa of proceeds of tax on coconut and other vegetable

oils.

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 OF 1986 AMENDMENT

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

after Dec. 31, 1986, with certain exceptions and qualifications,

see section 1277 of Pub. L. 99-514, set out as a note under section

931 of this title.

EFFECTIVE DATE OF 1972 AMENDMENT

Amendment by Pub. L. 92-606 applicable with respect to taxable

years beginning after Dec. 31, 1972, see section 2 of Pub. L.

92-606, set out in part as an Effective Date note under section 931

of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 932, 6688, 7809 of this

title; title 48 section 1421i.

-End-

-CITE-

26 USC Sec. 7655 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 78 - DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE

Subchapter D - Possessions

-HEAD-

Sec. 7655. Cross references

-STATUTE-

(a) Imposition of tax in possessions

For provisions imposing tax in possessions, see -

(1) Chapter 2, relating to self-employment tax;

(2) Chapter 21, relating to the tax under the Federal

Insurance Contributions Act.

(b) Other provisions

For other provisions relating to possessions of the United

States, see -

(1) Section 931, relating to income tax on residents of

Guam, American Samoa, or the Northern Mariana Islands;

(2) Section 933, relating to income tax on residents of

Puerto Rico.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 909; Pub. L. 85-859, title II,

Sec. 204(19), Sept. 2, 1958, 72 Stat. 1430; Pub. L. 91-513, title

III, Sec. 1102(k), Oct. 27, 1970, 84 Stat. 1293; Pub. L. 94-455,

title XIX, Sec. 1904(b)(6)(B), Oct. 4, 1976, 90 Stat. 1815; Pub. L.

99-514, title XII, Sec. 1272(d)(11), Oct. 22, 1986, 100 Stat. 2594;

Pub. L. 101-508, title XI, Sec. 11801(c)(22)(E), Nov. 5, 1990, 104

Stat. 1388-528.)

-REFTEXT-

REFERENCES IN TEXT

The Federal Insurance Contributions Act, referred to in subsec.

(a)(2), 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

1990 - Subsec. (a)(2), (3). Pub. L. 101-508, Sec.

11801(c)(22)(E)(i), substituted period for semicolon at end of par.

(2) and struck out par. (3) which cross-referenced former chapter

37 relating to tax on sugar.

Subsec. (b)(2), (3). Pub. L. 101-508, Sec. 11801(c)(22)(E)(ii),

substituted period for semicolon at end of par. (2) and struck out

par. (3) which cross-referenced former section 6418(b) relating to

the exportation of sugar to Puerto Rico.

1986 - Subsec. (b). Pub. L. 99-514 added par. (1) and

redesignated former pars. (1) and (2) as (2) and (3), respectively.

1976 - Subsec. (a)(3), (5). Pub. L. 94-455 substituted "Chapter

37" for "Subchapter A of chapter 37" in par. (5) and redesignated

par. (5) as (3).

1970 - Subsec. (a)(3), (4). Pub. L. 91-513 struck out pars. (3)

and (4) relating to taxes in respect of narcotic drugs and taxes in

respect of marihuana, respectively, and making references to parts

I and III of subchapter A of chapter 39 and to parts II and III of

subchapter A of chapter 39, respectively.

1958 - Subsec. (a)(5), (6). Pub. L. 85-859 redesignated par. (6)

as (5) and struck out former par. (5) which contained a cross

reference to chapter 51 of this title.

EFFECTIVE DATE OF 1986 AMENDMENT

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

after Dec. 31, 1986, with certain exceptions and qualifications,

see section 1277 of Pub. L. 99-514, set out as a note under section

931 of this title.

EFFECTIVE DATE OF 1970 AMENDMENT

Amendment by Pub. L. 91-513 effective on first day of seventh

calendar month that begins after Oct. 26, 1970, see section 1105(a)

of Pub. L. 91-513, set out as an Effective Date note under section

951 of Title 21, Food and Drugs.

EFFECTIVE DATE OF 1958 AMENDMENT

Amendment by Pub. L. 85-859 effective Sept. 3, 1958, see section

210(a)(1) of Pub. L. 85-859, set out as an Effective Date note

under section 5001 of this title.

SAVINGS PROVISION

For provisions that nothing in amendment by Pub. L. 101-508 be

construed to affect treatment of certain transactions occurring,

property acquired, or items of income, loss, deduction, or credit

taken into account prior to Nov. 5, 1990, for purposes of

determining liability for tax for periods ending after Nov. 5,

1990, see section 11821(b) of Pub. L. 101-508, set out as a note

under section 29 of this title.

Prosecutions for any violation of law occurring, and civil

seizures or forfeitures and injunctive proceedings commenced, prior

to the effective date of amendment of this section by section 1102

of Pub. L. 91-513 not to be affected or abated by reason thereof,

see section 1103 of Pub. L. 91-513, set out as a note under

sections 171 to 174 of Title 21, Food and Drugs.

-End-