26 U.S.C. § 4961 — Abatement of second tier taxes where there is correction
submitted 46 years ago by Pub. L. 96-596 to r/title-26-INTERNAL-REVENUE-CODE · 469 words · no verdicts yet
A second-tier tax is not assessed, or is refunded or credited, when the taxable event is corrected during its correction period. The section also provides court procedures and temporarily suspends collection in stated circumstances.
(a) If a taxable event* is corrected during its correction period*, its second-tier tax, including interest, additions, and additional amounts, is not assessed; if assessed it is abated; if collected it is credited or refunded as an overpayment. (b) After a court’s liability decision is final, it may hold a supplemental proceeding to decide whether correction occurred. It may begin only by the 90th day after the correction period ends. A final decision in that proceeding counts as a final Tax Court* decision for section 6213(a). (c)(1) If within 90 days after assessment the first-tier tax is paid in full and a refund claim is filed, collection of the second-tier tax by levy* or court proceeding is barred until the paragraph (2) proceeding and related subsection (b) proceeding finally end. The proper court may enjoin collection despite section 7421(a). (2) If the refund claim is denied, the person must begin a section 7422 liability proceeding within 90 days or paragraph (1) ends the next day. (3) The section 6502 collection-limit period is suspended during the bar. (4) A Secretary* finding that collection is in jeopardy permits immediate collection.
If any taxable event* is corrected during the correction period* for such event, then any second tier tax* imposed with respect to such event (including interest, additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.
If the determination by a court that the taxpayer* is liable for a second tier tax has become final, such court shall have jurisdiction to conduct any necessary supplemental proceeding to determine whether the taxable event was corrected during the correction period. Such a supplemental proceeding may be begun only during the period which ends on the 90th day after the last day of the correction period. Where such a supplemental proceeding has begun, the reference in the second sentence of section 6213(a) to a final decision of the Tax Court* shall be treated as including a final decision in such supplemental proceeding.
If, not later than 90 days after the day on which the second tier tax is assessed, the first tier tax* is paid in full and a claim for refund of the amount so paid is filed, no levy* or proceeding in court for the collection of the second tier tax shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2) (and of any supplemental proceeding with respect thereto under subsection (b)). Notwithstanding section 7421(a), the collection by levy or proceeding may be enjoined during the time such prohibition is in force by a proceeding in the proper court.
If, within 90 days after the day on which his claim for refund is denied, the person against whom the second tier tax was assessed fails to begin a proceeding described in section 7422 for the determination of his liability for such tax, paragraph (1) shall cease to apply with respect to such tax, effective on the day following the close of the 90-day period referred to in this paragraph.
The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court with respect to any second tier tax described in paragraph (1) shall be suspended for the period during which the Secretary* is prohibited from collecting by levy or a proceeding in court.
If the Secretary makes a finding that the collection of the second tier tax is in jeopardy, nothing in this subsection shall prevent the immediate collection of such tax.
Source credit: (Added Pub. L. 96–596, § 2(c)(1), Dec. 24, 1980, 94 Stat. 3472; amended Pub. L. 99–514, title XVIII, § 1899A(50), Oct. 22, 1986, 100 Stat. 2961; Pub. L. 115–141, div. U, title IV, § 401(a)(325)(C), Mar. 23, 2018, 132 Stat. 1200.)
- 1980Enacted · Pub. L. 96-596 · 94 Stat. 3472
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2961
- 2018Amended · Pub. L. 115-141 · 132 Stat. 1200
A history note hasn’t been published yet. The record shows enactment by Pub. L. 96-596 on 1980-12-24.
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