26 U.S.C. § 7478 — Declaratory judgments relating to status of certain governmental obligations
submitted 48 years ago by Pub. L. 95-600 to r/title-26-INTERNAL-REVENUE-CODE · 271 words · no verdicts yet
The Tax Court can declare whether interest on a planned government bond will be tax-free, or rule on an IRS delay in deciding. Only the entity planning to issue the bonds can bring this case. It must first exhaust IRS options and file within 91 days of the IRS's decision.
(a) Creation of remedy: If there is a real dispute over (1) whether the IRS has decided that interest on planned government obligations will be excluded from gross income under section 103(a), or (2) the IRS's failure to decide that question, the Tax Court* can declare whether that interest will be excludable, once the right paperwork is filed. This declaration works like, and can be reviewed like, a regular Tax Court decision.
(b) Limitations:
(1) Petitioner: only the entity planning to issue the bonds can file this kind of case.
(2) Exhaustion of administrative remedies: the Tax Court cannot rule unless the petitioner has used up all available IRS appeal options. For an IRS failure to decide, the petitioner counts as having exhausted those options 180 days after asking for the determination, as long as they took all reasonable, timely steps to get an answer.
(3) Time for bringing action: if the IRS mails its decision by certified or registered mail, the case must be filed before the 91st day after that mailing.
In a case of actual controversy involving—
a determination by the Secretary* whether interest on prospective obligations will be excludable from gross income under section 103(a), or
a failure by the Secretary to make a determination with respect to any matter referred to in paragraph (1),
upon the filing of an appropriate pleading, the Tax Court* may make a declaration whether interest on such prospective obligations will be excludable from gross income under section 103(a). Any such declaration shall have the force and effect of a decision of the Tax Court and shall be reviewable as such.
A pleading may be filed under this section only by the prospective issuer.
The court shall not issue a declaratory judgment or decree under this section in any proceeding unless it determines that the petitioner has exhausted all available administrative remedies within the Internal Revenue Service. A petitioner shall be deemed to have exhausted its administrative remedies with respect to a failure of the Secretary to make a determination with respect to an issue of obligations at the expiration of 180 days after the date on which the request for such determination was made if the petitioner has taken, in a timely manner, all reasonable steps to secure such determination.
If the Secretary sends by certified or registered mail notice of his determination as described in subsection (a)(1) to the petitioner, no proceeding may be initiated under this section unless the pleading is filed before the 91st day after the date of such mailing.
Source credit: (Added Pub. L. 95–600, title III, § 336(a), Nov. 6, 1978, 92 Stat. 2841; amended Pub. L. 100–647, title I, § 1013(a)(42), Nov. 10, 1988, 102 Stat. 3544.)
- 1978Enacted · Pub. L. 95-600 · 92 Stat. 2841
- 1988Amended · Pub. L. 100-647 · 102 Stat. 3544
A history note hasn’t been published yet. The record shows enactment by Pub. L. 95-600 on 1978-11-06.
all 0 arguments · sorted by: best
no arguments yet — make the first case