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26 U.S.C. § 7512 — Separate accounting for certain collected taxes, etc.

submitted 68 years ago by Pub. L. 85-321 to r/title-26-INTERNAL-REVENUE-CODE · 343 words · no verdicts yet

in plain englishAI-generated · not legal advice

This law targets people who fail to collect or pay over certain federal taxes. After the IRS hand-delivers a notice, the person must deposit future collected taxes in a separate trust account. The IRS can cancel this requirement once it is satisfied the person will comply.

(a) General rule: This section applies to any person required to collect, account for, and pay over taxes under subtitle C (employment taxes) or chapter 33 (certain excise taxes). If that person (1) fails — at the required time and in the required way — to collect, truthfully account for, or pay over the tax, or fails to make required deposits, payments, or returns, and (2) is personally notified by hand of that failure, then the person must follow the special rules in subsection (b). If the person notified is a corporation, partnership, or trust, hand-delivering the notice to one officer, partner, or trustee counts as notifying the whole entity and everyone who works for it. (b) Requirements: Once a person has been notified this way, they must collect the taxes that become due after the notice. They must deposit that money in a separate bank account — as defined in section 581 — no later than the second banking day after collecting it. They must keep the money in that account until they pay it over to the United States. The account must be labeled a special fund held in trust for the United States, with the person acting as trustee. (c) Relief from further compliance with subsection (b): The Secretary can cancel the notification once satisfied that the person will follow all applicable tax laws and regulations going forward. The cancellation takes effect on whatever date the cancellation notice specifies.
the actual law source: uscode.house.gov ↗public domain
(a) General rule

Whenever any person who is required to collect, account for, and pay over any tax imposed by subtitle C or chapter 33—

(1)

at the time and in the manner prescribed by law or regulations (A) fails to collect, truthfully account for, or pay over such tax, or (B) fails to make deposits, payments, or returns of such tax, and

(2)

is notified, by notice delivered in hand to such person, of any such failure,

then all the requirements of subsection (b) shall be complied with. In the case of a corporation, partnership, or trust, notice delivered in hand to an officer, partner, or trustee, shall, for purposes of this section, be deemed to be notice delivered in hand to such corporation, partnership, or trust and to all officers, partners, trustees, and employees thereof.

(b) Requirements

Any person who is required to collect, account for, and pay over any tax imposed by subtitle C or chapter 33, if notice has been delivered to such person in accordance with subsection (a), shall collect the taxes imposed by subtitle C or chapter 33 which become collectible after delivery of such notice, shall (not later than the end of the second banking day after any amount of such taxes is collected) deposit such amount in a separate account in a bank (as defined in section 581), and shall keep the amount of such taxes in such account until payment over to the United States. Any such account shall be designated as a special fund in trust for the United States, payable to the United States by such person as trustee.

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

Whenever the Secretary is satisfied, with respect to any notification made under subsection (a), that all requirements of law and regulations with respect to the taxes imposed by subtitle C or chapter 33, as the case may be, will henceforth be complied with, he may cancel such notification. Such cancellation shall take effect at such time as is specified in the notice of such cancellation.

Source credit: (Added Pub. L. 85–321, § 1, Feb. 11, 1958, 72 Stat. 5; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–223, title I, § 101(c)(3), Apr. 2, 1980, 94 Stat. 251; Pub. L. 100–418, title I, § 1941(b)(2)(O), Aug. 23, 1988, 102 Stat. 1324.)

history & why it existsrecord from the source credit
  • 1958Enacted · Pub. L. 85-321 · 72 Stat. 5
  • 1976Amended · Pub. L. 94-455 · 90 Stat. 1834
  • 1980Amended · Pub. L. 96-223 · 94 Stat. 251
  • 1988Amended · Pub. L. 100-418 · 102 Stat. 1324

A history note hasn’t been published yet. The record shows enactment by Pub. L. 85-321 on 1958-02-11.

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