26 U.S.C. § 6851 — Termination assessments of income tax

submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 679 words · no verdicts yet

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The Secretary can act fast if a taxpayer seems to be fleeing the country or hiding property. In that case, the Secretary may immediately assess and demand the unpaid tax. A citizen who is leaving may get this requirement waived. An alien usually needs a tax-compliance certificate before leaving.

(a) Authority for making. Suppose the Secretary believes a taxpayer plans to quickly leave the country, move or hide property, or hide themselves. This also applies if the taxpayer does something else that could block tax collection. In that case, the Secretary must immediately calculate that person's income tax. This covers the current year, the prior year, or both. That tax becomes due right away. The Secretary must assess it, with interest and penalties, and demand immediate payment. For the current year, the tax covers only the period up to the determination date, treated as a full tax year. Money collected this way counts as a payment toward that year's tax. This power doesn't apply to a prior year after that year's return was due, including extensions. (b) Notice of deficiency. After such an assessment, the Secretary must mail a formal deficiency notice for the taxpayer's whole tax year. This notice is due within sixty days of the later of the return's due date or its filing date. That later notice can list a different amount than what was first assessed. (c) Citizens. For a citizen about to leave the country, the Secretary may waive any of this section's requirements. (d) Departure of aliens. An alien generally cannot leave the United States without first getting a certificate from the Secretary. That certificate shows they met their income tax obligations. The Secretary need not enforce this early if satisfied the alien's departure won't jeopardize tax collection. (e) Related provisions apply. Rules in section 6861 about collecting unpaid amounts also apply here. So do rules about canceling an assessment when there's no real jeopardy. (f) Cross references. Other provisions cover immediate levies in jeopardy cases and court review of jeopardy determinations.

facts

- Placement: 26 U.S.C. § 6851, titled "Termination assessments of income tax," located within the Internal Revenue Code. - Length: The provision contains 679 words. - Original enactment: Enacted August 16, 1954, by ch. 736, 68A Stat. 833. - Amendments: Amended twice, by Pub. L. 85–866 (Sept. 2, 1958) and Pub. L. 94–455 (Oct. 4, 1976). - Source credit: The source credit references three distinct statutory enactments/amendments.

the actual law source: uscode.house.gov ↗public domain

(a) Authority for making

(1) In general

If the Secretary finds that a taxpayer designs quickly to depart from the United States or to remove his property therefrom, or to conceal himself or his property therein, or to do any other act (including in the case of a corporation distributing all or a part of its assets in liquidation or otherwise) tending to prejudice or to render wholly or partially ineffectual proceedings to collect the income tax for the current or the immediately preceding taxable year unless such proceeding be brought without delay, the Secretary shall immediately make a determination of tax for the current taxable year or for the preceding taxable year, or both, as the case may be, and notwithstanding any other provision of law, such tax shall become immediately due and payable. The Secretary shall immediately assess the amount of the tax so determined (together with all interest, additional amounts, and additions to the tax provided by law) for the current taxable year or such preceding taxable year, or both, as the case may be, and shall cause notice of such determination and assessment to be given the taxpayer, together with a demand for immediate payment of such tax.

(2) Computation of tax

In the case of a current taxable year, the Secretary shall determine the tax for the period beginning on the first day of such current taxable year and ending on the date of the determination under paragraph (1) as though such period were a taxable year of the taxpayer, and shall take into account any prior determination made under this subsection with respect to such current taxable year.

(3) Treatment of amounts collected

Any amounts collected as a result of any assessments under this subsection shall, to the extent thereof, be treated as a payment of tax for such taxable year.

(4) This section inapplicable where section 6861 applies

This section shall not authorize any assessment of tax for the preceding taxable year which is made after the due date of the taxpayer’s return for such taxable year (determined with regard to any extensions).

(b) Notice of deficiency

If an assessment of tax is made under the authority of subsection (a), the Secretary shall mail a notice under section 6212(a) for the taxpayer’s full taxable year (determined without regard to any action taken under subsection (a)) with respect to which such assessment was made within 60 days after the later of (i) the due date of the taxpayer’s return for such taxable year (determined with regard to any extensions), or (ii) the date such taxpayer files such return. Such deficiency may be in an amount greater or less than the amount assessed under subsection (a).

In the case of a citizen of the United States or of a possession of the United States about to depart from the United States, the Secretary may, at his discretion, waive any or all of the requirements placed on the taxpayer by this section.

(d) Departure of alien

Subject to such exceptions as may, by regulations, be prescribed by the Secretary—

(1)

No alien shall depart from the United States unless he first procures from the Secretary a certificate that he has complied with all the obligations imposed upon him by the income tax laws.

(2)

Payment of taxes shall not be enforced by any proceedings under the provisions of this section prior to the expiration of the time otherwise allowed for paying such taxes if, in the case of an alien about to depart from the United States, the Secretary determines that the collection of the tax will not be jeopardized by the departure of the alien.

(e) Sections 6861(f) and (g) to apply

The provisions of section 6861(f) (relating to collection of unpaid amounts) and 6861(g) (relating to abatement if jeopardy does not exist) shall apply with respect to any assessment made under subsection (a).

(f) Cross references

(1)

For provisions permitting immediate levy in case of jeopardy, see section 6331(a).

(2)

For provisions relating to the review of jeopardy, see section 7429.

Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 833; Pub. L. 85–866, title I, § 87, Sept. 2, 1958, 72 Stat. 1665; Pub. L. 94–455, title XII, § 1204(b), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1696, 1834.)

history & why it existsrecord from the source credit

1954Enacted · Act of Aug. 16, 1954, ch. 736
1958Amended · Pub. L. 85-866 · 72 Stat. 1665
1976Amended · Pub. L. 94-455 · 90 Stat. 1696, 1834

The record establishes that this section was originally enacted as part of the Internal Revenue Code of 1954, chapter 736, on August 16, 1954, appearing at 68A Stat. 833. The source credit shows two subsequent amendments: one by Public Law 85–866, title I, § 87, enacted September 2, 1958, and another by Public Law 94–455, title XII, § 1204(b) and title XIX, § 1906(b)(13)(A), enacted October 4, 1976. Beyond these citations, the source credit does not detail the substantive content of each amendment. Historical context for this specific provision is limited by what can be responsibly stated. The section was part of the broader 1954 recodification of the Internal Revenue Code, an effort generally understood to have reorganized and modernized federal tax law rather than to introduce novel policy in most instances. The subject matter of this section—authority to make immediate ("termination") assessments of income tax when a taxpayer appears likely to depart the country, conceal assets, or otherwise frustrate collection—is consistent with longstanding tax-administration concerns about jeopardy to revenue collection, a category of concern reflected elsewhere in the Code's jeopardy-assessment provisions. The 1976 amendments came via Public Law 94–455, commonly known as the Tax Reform Act of 1976, an omnibus measure addressing numerous aspects of federal tax administration and substantive tax law; the specific intent behind its changes to this section is not established by the record provided. No further legislative history is available here to explain the particular design choices in this provision.

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