26 U.S.C. § 7701 — Definitions

This section defines words that the rest of the tax code uses. Whenever another section uses one of these words, it means what this section says it means, unless the context clearly requires something else. (a) Definitions. This part gives 52 numbered definitions (two have been repealed, so their numbers are skipped). (1) Person. "Person" means an individual, a trust, an estate, a partnership, an association, a company, or a corporation. (2) Partnership and partner. A "partnership" is a syndicate, group, pool, joint venture, or other unincorporated organization that carries on a business, financial operation, or venture, as long as it is not a trust, an estate, or a corporation. A "partner" is a member of one of these groups. (3) Corporation. "Corporation" includes associations, joint-stock companies, and insurance companies. (4) Domestic. "Domestic," applied to a corporation or partnership, means it was created or organized in the United States or under U.S. or state law. For partnerships, the Secretary can write a rule that says otherwise. (5) Foreign. "Foreign," applied to a corporation or partnership, means it is not domestic. (6) Fiduciary. A "fiduciary" is a guardian, trustee, executor, administrator, receiver, conservator, or anyone else acting in a position of trust for another person. (7) Stock. "Stock" includes shares in an association, joint-stock company, or insurance company. (8) Shareholder. "Shareholder" includes a member of an association, joint-stock company, or insurance company. (9) United States. Used geographically, "United States" means only the states and the District of Columbia. (10) State. "State" includes the District of Columbia whenever that is needed to carry out the tax code. (11) Secretary of the Treasury and Secretary. "Secretary of the Treasury" means that person personally, not anyone working for him. "Secretary" means the Secretary of the Treasury or his delegate. (12) Delegate. "Or his delegate," used with the Secretary of the Treasury, means any Treasury officer, employee, or agency the Secretary has authorized (directly or through a chain of authorizations) to do the job described. Used with any other U.S. official, it works the same way. For taxes under chapters 1, 2, and 21 performed in Guam or American Samoa, "delegate" also includes an authorized officer or employee of any other federal department, agency, or territory. (13) Commissioner. "Commissioner" means the Commissioner of Internal Revenue. (14) Taxpayer. "Taxpayer" means any person subject to any federal tax. (15) Military or naval forces and armed forces of the United States. These terms include every regular and reserve unit under the Secretary of Defense, Army, Navy, or Air Force, plus the Coast Guard. They cover both commissioned officers and everyone below that rank. (16) Withholding agent. A "withholding agent" is anyone required to withhold tax under section 1441, 1442, 1443, or 1461. (17) Husband and wife. This is a narrow rule just for section 2516. If the husband and wife in that section are divorced, "wife" means "former wife" and "husband" means "former husband." If the payments described there actually flow from the wife to the husband instead of the usual direction, the words "husband" and "wife" swap so the rule still makes sense. (18) International organization. This means a public international organization that gets privileges, exemptions, and immunities under the International Organizations Immunities Act. (19) Domestic building and loan association. This term covers a domestic building and loan association, a domestic savings and loan association, or a federal savings and loan association that meets three tests: (A) a state or federal authority supervises and examines it; (B) its main business is taking the public's savings and investing them in loans; and (C) at least 60% of its total assets, measured at the end of the tax year (or, if the taxpayer chooses, averaged across the year), fall into a specific list — cash; U.S., state, or local government obligations (but not tax-exempt bonds under section 103); certificates or obligations of a state-chartered deposit-insurance corporation; loans secured by a member's own deposit; loans secured by residential real estate or church property (including loans to improve such property and certain ground rents), where a mixed-use building still counts as residential if at least 80% of its planned use is residential, and land-purchase loans count if there is reasonable assurance the land will become residential real property within three years; loans for urban-renewal housing projects approved under specific federal housing laws; loans secured by educational, health, or welfare institutions (including housing for their students, residents, or staff); property picked up through foreclosing on any of the loans above; student loans for college or vocational training; property the association uses in its own business; and REMIC interests, counted in proportion to how much of the REMIC's own assets fit these categories (a REMIC counts in full if 95% or more of its assets qualify, and a REMIC that holds interests in another REMIC applies these same look-through rules). (20) Employee. For certain specific rules only — group-term life insurance (section 79), accident and health coverage (sections 104-106), retirement and profit-sharing plans, and cafeteria plans (section 125) — "employee" also includes a full-time life insurance salesperson who counts as an employee under chapter 21. (21) Levy. "Levy" includes the power to seize property by distraint or any other means. (22) Attorney General. This means the Attorney General of the United States. (23) Taxable year. "Taxable year" is the calendar year, or the fiscal year within it, used to compute taxable income. For a short-period return, it's whatever period that return covers. (24) Fiscal year. A "fiscal year" is a 12-month accounting period ending on the last day of any month except December. (25) Paid or incurred, paid or accrued. These phrases are read according to whatever accounting method the taxpayer uses to compute taxable income. (26) Trade or business. This term includes holding a public office and performing its duties. (27) Tax Court. "Tax Court" means the United States Tax Court. (28) Other terms. A term used in one part of the tax code, when it also appears in another part, means the same thing in both places. (29) Internal Revenue Code. "Internal Revenue Code of 1986" means this title. "Internal Revenue Code of 1939" means the earlier code enacted in 1939, as later amended. (30) United States person. This means: (A) a U.S. citizen or resident; (B) a domestic partnership; (C) a domestic corporation; (D) any estate that is not a "foreign estate" under paragraph (31); and (E) any trust, but only if a U.S. court can primarily supervise how the trust is run, and one or more U.S. persons control every major decision the trust makes. (31) Foreign estate or trust. (A) A "foreign estate" is one whose income from outside the United States — income not tied to a U.S. trade or business — does not have to be reported as U.S. gross income. (B) A "foreign trust" is any trust that does not qualify as a United States person's trust under paragraph (30)(E). (32) Cooperative bank. This is a no-stock, mutual, nonprofit institution that (A) is supervised and examined by a state or federal authority, and (B) meets the same 60%-of-assets test that applies to a domestic building and loan association under paragraph (19)(B) and (C). (33) Regulated public utility. This is a long list of rate-regulated companies: (A) corporations selling electricity, gas, water, or sewer service, or providing certain local rail, trolley, bus, or motor-vehicle transportation, where a government body has set or approved the rates; (B) common-carrier gas pipelines regulated by the Federal Energy Regulatory Commission; (C) common-carrier railroads regulated by the Surface Transportation Board, and oil-pipeline carriers regulated by FERC or a state utility commission; (D) rate-regulated phone or telegraph companies; (E) common-carrier airlines regulated by the Secretary of Transportation; (F) water carriers regulated under federal shipping law; (G) rail carriers that leased almost all their railroad property to another railroad before 1954, under long leases that supply most of their income; and (H) parent railroad holding companies that get most of their income from the categories above. In general, a company in categories (A) through (F) only counts as a "regulated public utility" if at least 80% of its income comes from those regulated sources — but if a company shows its regulated and unregulated rates come from one connected system and the unregulated rates are just as fair to customers, the unregulated income counts toward that 80% too. (34) Repealed. (35) Enrolled actuary. This is a person enrolled by the Joint Board for the Enrollment of Actuaries, a board created under ERISA. (36) Tax return preparer. (A) This is anyone paid to prepare a tax return or refund claim, or who employs others to do so, including preparing a substantial part of one. (B) It does not include someone who only types or copies a return, an employee who prepares their own employer's return, someone preparing a return as a fiduciary, or someone preparing a refund claim in response to a deficiency notice or an audit-related waiver. (37) Individual retirement plan. This means an IRA account under section 408(a) or an IRA annuity under section 408(b). (38) Joint return. A "joint return" is a single return a husband and wife file together under section 6013. (39) Persons residing outside United States. A citizen or resident who cannot be found in any U.S. judicial district is treated as living in the District of Columbia for two purposes: (A) which court has jurisdiction, and (B) enforcing a summons. (40) Indian tribal government. (A) This is the governing body of a tribe, band, community, village, or group of Indians or Alaska Natives that the Secretary, after talking with the Secretary of the Interior, decides performs governmental functions. (B) For Alaska Natives specifically, such a decision grants only the powers listed in section 7871 — nothing more — and this rule does not prove or disprove any claim that Alaska Natives hold sovereign authority over land or people. (41) TIN. "TIN" means the identifying number assigned under section 6109. (42) Substituted basis property. This is property that is either "transferred basis property" or "exchanged basis property." (43) Transferred basis property. This is property whose tax basis is set, in whole or part, by looking at the basis it had in the hands of the person who gave, granted, or transferred it. (44) Exchanged basis property. This is property whose tax basis is set, in whole or part, by looking at other property the same person held at some other time. (45) Nonrecognition transaction. This is any disposal of property where gain or loss is not recognized, in whole or part, under the income tax rules. (46) Determination of whether there is a collective bargaining agreement. When deciding whether "employee representatives" negotiated with an employer, a group does not count as employee representatives if more than half its members are owners, officers, or executives of the employer. And an agreement only counts as a collective bargaining agreement if it is genuinely between real employee representatives and one or more real employers. (47) Repealed. (48) Off-highway vehicles. (A) A vehicle is not a "highway vehicle" if it is specially built to carry a particular kind of load off the public road, and that special design substantially limits how well it could carry a load on the road. The design is judged only by the vehicle's physical features. Whether the limitation is "substantial" can depend on the vehicle's size, whether it meets highway licensing and safety rules, and whether it can sustain at least 25 miles per hour — it does not matter that the vehicle could carry more weight off-road than it is allowed to carry on the road. (B) A trailer or semitrailer built only to work as an enclosed, stationary shelter for an off-highway job at an off-highway site is also not a highway vehicle. (49) Qualified blood collector organization. This is a tax-exempt charity under section 501(c)(3) that mainly collects human blood, is registered with the Secretary for excise-tax-exemption purposes, and is registered with the FDA to collect blood. (50) Termination of United States citizenship. (A) A person keeps being treated as a U.S. citizen, for tax purposes, until the date their citizenship counts as given up under section 877A(g)(4). (B) The Secretary can write regulations excusing dual citizens — people who were citizens of the U.S. and another country from birth — from that rule. (51) Prohibited foreign entity. This long paragraph defines a category used to deny certain clean-energy tax credits. (A) A "prohibited foreign entity" is either a "specified foreign entity" or a "foreign-influenced entity." Generally the test is applied as of the last day of the tax year; for the first tax year after this paragraph became law, some categories are tested as of the first day instead. (B) A "specified foreign entity" is: a foreign entity of concern named in certain 2021 defense-authorization-law categories; an entity identified as a Chinese military company under that same law; an entity on certain lists required by a 2021 statute; an entity named under a 2024 defense-authorization provision; or a "foreign-controlled entity." (C) A "foreign-controlled entity" is: the government of a "covered nation" (at any level); an agency of that government; a citizen or national of a covered nation who is not a U.S. citizen, national, or lawful permanent resident; an entity organized in, or headquartered in, a covered nation; or an entity controlled by any of those. (D) A "foreign-influenced entity" is an entity where, during the year, a specified foreign entity can appoint one of its top officers, or a single specified foreign entity owns at least 25%, or specified foreign entities together own at least 40%, or at least 15% of its debt is held by specified foreign entities — or an entity that, in the previous year, paid a specified foreign entity under a deal that gives that foreign entity "effective control" over the entity's clean-energy facility or energy storage, or over the extraction, processing, recycling, or production steps for certain components. "Effective control" is defined broadly, and then — until the Secretary issues guidance — spelled out through a specific list: an unrestricted right to decide how much or when the entity produces, to decide who may buy the entity's output, to restrict access to production data or the production site to the foreign counterparty's own people, or to exclusively maintain or repair key equipment; and, for licensing deals involving intellectual property, retained rights to direct sourcing, direct plant operations, limit the taxpayer's use of the IP, collect royalties beyond ten years, force service contracts longer than two years, withhold the full know-how needed to make the product independently, or any such agreement entered into after this paragraph became law. A genuine, no-strings-attached sale of the IP is not "effective control" — but a "sale" where ownership reverts back to the foreign party later does not count as genuine. The Secretary must issue guidance on all this by December 31, 2026, including rules against evasion. (E) Publicly traded companies get relief from some of these tests if their shares are regularly traded on a registered U.S. exchange or an approved market (not one based in a covered nation) — though extra rules still apply if a reporting foreign entity controls them or can appoint their officers, owns a large stake, or holds a large share of their public debt. (F) A "covered officer" is a board member, a top executive (CEO, COO, CFO, general counsel, senior VP, etc.), or anyone with similar power. (G) "Control" means owning more than 50% of a corporation (by vote or value), more than 50% of a partnership's profits or capital, or more than 50% of any other entity's beneficial interest. (H) Ownership is measured using the family- and entity-attribution rules of section 318(a)(2), applied similarly to non-corporate entities. (I) Several more terms — "applicable critical mineral," "covered nation," "eligible component," "energy storage technology," "qualified facility," and "related" — borrow their meanings from other listed sections. (J) When construction "begins" is decided under rules like existing IRS notices, as those notices stood on January 1, 2025. (K) The Secretary may issue further regulations to prevent people from getting around this paragraph. (52) Material assistance from a prohibited foreign entity. This paragraph works with paragraph (51) to limit tax credits. (A) A taxpayer gets "material assistance from a prohibited foreign entity" if its "material assistance cost ratio" falls below a required percentage — one test for clean-energy facilities and storage technology, another for facilities that make eligible components. (B) For facilities and storage technology, the required percentage rises each year construction begins: for facilities, 40% in 2026 up to 60% after 2029; for storage technology, 55% in 2026 up to 75% after 2029. (C) For components sold in a given year, the required percentage also rises by year and component type: solar components go from 50% (2026) to 85% (after 2029); wind components go from 85% (2026) to 90% (2027, the last year listed); inverters go from 50% to 70%; battery components go from 60% to 85%; and critical minerals require 0% through 2029, then rise from 25% (2030) to 50% (after 2032). By December 31, 2027, the Secretary must set specific percentages for each critical mineral that are at least as strict as these defaults, considering U.S. supply, supply-chain limits, processing capacity, and national security. (D) The "material assistance cost ratio" is: (total direct costs of the manufactured products or materials used, minus the part of those costs tied to a prohibited foreign entity) divided by (the total costs). Facilities and storage technology are measured by the cost of manufactured products built into them; eligible components are measured by their direct material costs. The Secretary must publish safe-harbor tables by December 31, 2026, to make these costs easy to prove. Until then, taxpayers can use the tables in IRS Notice 2025-08 or rely on a supplier's signed certification (which must include the supplier's tax ID, be signed under penalty of perjury, be kept for six years, and state which costs were not tied to a prohibited foreign entity) — unless the taxpayer knows, or has reason to know, that the product came from a prohibited foreign entity or that the certification is false, in which case the taxpayer must treat the whole cost as tied to a prohibited foreign entity and cannot rely on the certification. Taxpayers can elect to leave out of the ratio any costs locked in under a binding contract signed before June 16, 2025, if the property is placed in service (or, for components, the product is sold) before set deadlines. The Secretary must issue rules to stop taxpayers from stockpiling supplies to dodge this paragraph or from faking when construction "began." (E) More borrowed definitions apply here too — "eligible component," "energy storage technology," "manufactured product," and "qualified facility." (F) Ownership and beginning-of-construction are determined the same way as in paragraph (51). (G) The Secretary may issue further regulations, including rules for facilities that make more than one type of component. (b) Definition of resident alien and nonresident alien. This subsection explains, for most of the tax code (all but subtitle B), who counts as a resident alien. (1) In general. (A) A noncitizen is a "resident" for a calendar year if, and only if, at least one of three things is true: (i) they are a lawful permanent resident (green-card holder) at any point that year; (ii) they pass the "substantial presence test" described below; or (iii) they make the "first-year election" described below. (B) Anyone who is neither a U.S. citizen nor a resident under those rules is a "nonresident alien." (2) Special rules for first and last year of residency. (A) In a person's first year as a resident, they only count as a resident starting from their "residency starting date" — the date depends on which path made them a resident: for a green-card holder, it's the first day that year they were present in the U.S. while holding the green card; for someone passing the substantial presence test, it's the first day that year they were present in the U.S.; for someone making the first-year election, it's the first day they are treated as a resident under that election. (B) In a person's last year, they stop being treated as a resident for the part of the year after their last day of U.S. presence, but only if, for that later part of the year, they have a closer connection to a foreign country than to the U.S., and they are not a resident again the next year. (C) Up to — but never more than — 10 days of presence can be ignored if the person shows a closer connection to a foreign country for those days. (3) Substantial presence test. (A) A person passes this test for a "current year" if they were in the U.S. at least 31 days that year, and if a weighted count of their U.S. days adds up to 183 or more: count every day in the current year fully, every day in the year before at one-third weight, and every day in the year before that at one-sixth weight. (B) Even if the math above says yes, the person does not pass the test if they were in the U.S. fewer than 183 days in the current year and they can show they have a tax home in, and a closer connection to, a foreign country. (C) That escape in (B) does not apply to anyone who, during the year, had a pending green-card application or otherwise took steps to become a lawful permanent resident. (D) A day does not count as a U.S. day if the person was an "exempt individual" that day, or if a medical condition that started while they were in the U.S. kept them from leaving. (4) First-year election. (A) A noncitizen can qualify for this election if: they are not a resident under the green-card or substantial-presence rules for this year (the "election year") or the year before it; they will be a resident under the substantial-presence test the year after the election year; and they were present in the U.S. for at least 31 straight days during the election year, and present for at least 75% of the days in the "testing period" running from the start of that 31-day stretch through the end of the election year (up to 5 absent days can still count as present). (B) If they qualify and choose to, they are treated as a resident for the election year. (C) Their residency starts on the first day of the earliest 31-day stretch that qualifies. (D) The same day-counting rules used for the substantial presence test apply here too. (E) The election is made on that year's tax return, and cannot be filed before the person has actually met the substantial presence test for the following year. (F) Once made, the election stays in effect for that year unless the Secretary agrees to let the person revoke it. (5) Exempt individual defined. (A) A person is "exempt" on any day they are a foreign-government-related individual, a teacher or trainee, a student, or a professional athlete temporarily in the U.S. for a charity sports event (one held mainly to benefit a 501(c)(3) charity, that gives all its net proceeds to that charity, and that runs mostly on volunteers). (B) "Foreign-government-related individual" covers people here on diplomatic status, on a visa the Secretary treats as full diplomatic status, as a full-time employee of an international organization, or as an immediate family member of someone in either category. (C) "Teacher or trainee" means someone here on a J or Q visa (other than as a student) who is substantially following that visa's rules. (D) "Student" means someone here on an F, M, J, or Q visa as a student, substantially following that visa's rules. (E) Limits: a teacher or trainee cannot claim the exemption if they were already exempt as a teacher, trainee, or student for 2 of the past 6 years (4 years, for certain compensated researchers under section 872(b)(3)). A student cannot claim the exemption after their 5th exempt year unless they prove to the Secretary that they do not intend to live in the U.S. permanently and that they still meet the student rules. (6) Lawful permanent resident. Someone is a lawful permanent resident whenever they hold that immigration status and it has not been revoked or found to have been abandoned. A person stops being a lawful permanent resident, for this section, once they start being treated as a resident of another country under a tax treaty, do not give up that treaty's benefits, and tell the Secretary they are doing this. (7) Presence in the United States. (A) Generally, being physically in the U.S. for any part of a day counts as a day of presence. (B) A day does not count for someone who regularly commutes into the U.S. for work from a home in Canada or Mexico. (C) A day does not count for someone just passing through the U.S. between two foreign points, if they are here less than 24 hours. (D) A day does not count for a foreign ship's crew member temporarily here, unless that person also does business in the U.S. that day. (8) Annual statements. The Secretary can require a person claiming the closer-connection exceptions in (3)(B) or (3)(D) to file a yearly statement explaining the basis for that claim. (9) Taxable year. (A) A noncitizen with no established tax year is treated as using the calendar year. (B) If that person actually reports on a fiscal year rather than a calendar year, their resident status for a calendar year is applied to whatever part of their fiscal year falls within it. (10) Coordination with section 877. If someone was a resident for at least 3 straight calendar years, then stops being a resident, but becomes a resident again before the third calendar year after that gap ends, they are taxed for the gap period under the expatriate rules of section 877(b) — but only if that produces more tax than the regular nonresident rules of section 871 would. (11) Regulations. The Secretary shall write regulations needed to carry out this subsection. (c) Includes and including. When this title defines a term using the words "includes" or "including," that list does not shut out other things that also fit the term's ordinary meaning. (d) Commonwealth of Puerto Rico. Wherever this title refers to a "possession of the United States," that also means the Commonwealth of Puerto Rico, unless the context clearly says otherwise. (e) Treatment of certain contracts for providing services, etc. This subsection, for income-tax purposes, decides when a "service contract" is really a lease. (1) In general. A contract that claims to be a service contract is treated as a property lease if it really is one, judged by factors including: whether the customer physically possesses the property, controls it, or has a real economic stake in it; whether the service provider bears no risk if the deal goes badly; whether the provider does not also use the property for other customers at the same time; and whether the total price does not run well above what renting the property would cost. (2) Other arrangements. A deal that is not a formal service contract — including one run through a partnership or similar pass-through entity — is tested the same way and treated as a lease if it really is one. (3) Special rules for contracts or arrangements involving solid waste disposal, energy, and clean water facilities. Contracts that claim to be service contracts for running a qualified solid waste disposal facility, selling power from a cogeneration or alternative-energy facility, running a water treatment plant, or running a storage facility are treated as service contracts (the opposite default from paragraph (1)), unless paragraph (4) below takes that away. This paragraph defines each facility type: a solid waste disposal facility that serves the public in one or more government areas; a cogeneration facility that makes both power and useful heat from one energy source; an alternative-energy facility whose main energy source is not oil, gas, coal, or nuclear; a water treatment works under federal clean-water law; and a storage facility using energy storage technology as defined under section 48. (4) Paragraph (3) not to apply in certain cases. The special service-contract treatment in (3) does not apply if the customer (or someone related to them) actually operates the facility, bears a real financial risk if the deal falls through, benefits financially when running costs come in low, or has an option to buy the facility below fair market value. Some things don't count against the customer here: temporary shutdowns for repairs or the provider's bankruptcy, cost savings from better efficiency, a right to inspect the facility, sovereign powers the customer already has, a right to act after a real breach of contract, or how costs get split up if the law changes. (5) Exception for certain low-income housing. This whole subsection does not apply to certain low-income housing if it is run by or for a qualifying nonprofit and at least 80% of its units go to low-income tenants, under standards from before the 1990 tax law changed them. (6) Regulations. The Secretary may write regulations to carry out this subsection. (f) Use of related persons or pass-thru entities. The Secretary must write regulations to stop people from using related parties or pass-through entities to dodge the tax rules on linking borrowed money to specific investments, or on shifting risk. (g) Clarification of fair market value in the case of nonrecourse indebtedness. When figuring gain or loss on property for income-tax purposes, the property's fair market value is never treated as less than any nonrecourse debt (a loan the lender can only collect by taking the property) that is secured by it. (h) Motor vehicle operating leases. (1) A motor-vehicle agreement that would otherwise count as a lease, but that includes a "terminal rental adjustment clause," is still treated as a lease — and the person leasing the vehicle (the lessee) is not treated as its owner while the lease runs. (2) To count as this kind of agreement: (B) the lessor's own personal liability, plus the value of any collateral they've pledged, must be enough to cover the money borrowed to buy the vehicle; (C) the lessee must sign a separate statement, under penalty of perjury, saying they plan to use the vehicle more than half the time for business, and acknowledging in writing that they will not be treated as the owner for tax purposes; and (D) the lessor must not know that statement is false. (3) A "terminal rental adjustment clause" is a clause that lets the rent go up or down based on what the lessor gets when the vehicle is later sold — this also covers a clause that makes a dealer-lessee buy the vehicle back at a set price and resell it, if that achieves the same result. (i) Taxable mortgage pools. (1) A "taxable mortgage pool" is treated as its own separate corporation and cannot join a consolidated tax return with any other corporation. (2) It is any entity, other than a REMIC, where: substantially all its assets are debt obligations, more than half of which are real estate mortgages; it owes debt with two or more different maturity dates; and the payments on that debt track the payments coming in on the mortgages. Even part of an entity can count as its own taxable mortgage pool. A domestic building and loan association is never treated as one. Regulations can treat different classes of equity interest that mirror the debt's maturities as if they were debt. (3) If a real estate investment trust, or its qualified REIT subsidiary, is itself a taxable mortgage pool, its shareholders get adjustments like those under section 860E(d), as regulations describe. (j) Tax treatment of Federal Thrift Savings Fund. (1) The Thrift Savings Fund is treated as a tax-exempt retirement trust under section 401(a); contributions and distributions are treated the way they would be for such a trust; and letting an employee choose between the Fund or cash does not, by itself, make Fund contributions count as if the employee had received them. (2) The Fund does not have to meet the usual nondiscrimination rules for 401(k) plans or matching contributions, as long as it follows this section. (3) None of this changes how those contributions count as "wages" for Social Security purposes. (4) "Member," "employee," and "Thrift Savings Fund" mean whatever they mean under the relevant Title 5 civil-service law. (5) No law outside this title controls how the Fund or its contributions and distributions are taxed. (k) Treatment of certain amounts paid to charity. If a payment that could otherwise have gone to a federal officer or employee is instead sent to a charity under section 170(c) (because of a specific federal ethics-law provision), then (1) that officer or employee is not treated as having received the payment for any federal or state tax purpose, and (2) neither they nor anyone else gets a tax deduction for it. Members of Congress and the Delegate or Resident Commissioner count as federal officers or employees for this rule. (l) Regulations relating to conduit arrangements. The Secretary can write regulations that treat a financing deal routed through multiple parties as if it happened directly between two or more of them, whenever that stops people from dodging tax. (m) Designation of contract markets. If the Commodity Futures Trading Commission designates a contract market in a way that would not have been allowed before the Commodity Futures Modernization Act of 2000, that designation still applies for tax purposes, unless the Secretary's regulations say otherwise. (n) Convention or association of churches. An organization that is otherwise a convention or association of churches does not lose that status just because individual people, not only churches, are members or can vote in it. (o) Clarification of economic substance doctrine. (1) When the "economic substance doctrine" applies to a deal, that deal only counts as having economic substance if it meaningfully changes the taxpayer's actual economic position (apart from tax effects) and the taxpayer had a real, substantial reason for doing it apart from taxes. (2) A deal's profit potential only counts toward meeting that test if the expected pre-tax profit is substantial compared with the tax benefits being claimed — and fees and other transaction costs, including foreign taxes under regulations, count against that profit. (3) A state or local tax effect linked to a federal tax effect is treated the same as the federal tax effect. (4) A financial-accounting benefit does not count as a real business purpose if it exists only because federal taxes went down. (5) Some terms: "economic substance doctrine" means the existing common-law rule that tax benefits do not apply to a deal that lacks real economic substance or a business purpose; this whole rule only applies to an individual's deals if they are business or income-related, not personal; whether the doctrine applies to a given deal at all is decided the same way it always was, as if this codification had never happened; and "transaction" includes a series of transactions. (p) Cross references. (1) Other basic definitions — like singular meaning plural, masculine including feminine, what "officer" or "oath" means, county including parish, and vessel, vehicle, and company including their successors — are found in Title 1 of the U.S. Code, not here. (2) How cross-references generally work in this title is explained in section 7806(a).