26 U.S.C. § 982 — Admissibility of documentation maintained in foreign countries
submitted 44 years ago by Pub. L. 97-248 to r/title-26-INTERNAL-REVENUE-CODE · 574 words · no verdicts yet
This section lets a court bar a taxpayer from introducing foreign documents if the taxpayer does not substantially comply with a formal document request within 90 days. It defines the request and documents, allows a proceeding to challenge the request, and pauses limitation periods while that proceeding is pending.
(a) If a taxpayer* does not substantially comply with a formal document request by the 90th day after the request was mailed, the Secretary* may ask a court where a civil case involving the examined item is pending to bar the taxpayer from introducing foreign-based documents covered by the request.
(b)(1) This bar does not apply if the taxpayer proves that reasonable cause prevented production. (2) The fact that a foreign country would impose a civil or criminal penalty for disclosure is not reasonable cause.
(c)(1) A “formal document request” is a request made after ordinary request procedures failed. It must ask for foreign-based documents, be sent by registered or certified mail to the taxpayer’s last known address, and state the time and place for production, why earlier documents were insufficient, what documents are sought, and the consequences of not producing them. (2)(A) The recipient may begin a proceeding to quash the request within 90 days after mailing. The Secretary may seek an order compelling compliance. (B) The United States district court where the recipient lives or is found has jurisdiction. An order denying the petition is final and appealable. (C) The 90-day period in subsection (a) stops while that proceeding is pending.
(d) “Foreign-based documentation” means documents outside the United States that may be relevant or material to the examined item. “Documentation” includes books and records. The Secretary and the court handling a challenge may extend the 90-day period.
(e) If a person takes action under subsection (c)(2), every limitation period under section 6501 for assessing or collecting tax and section 6531 for criminal prosecutions is paused for the time that proceeding and its appeals are pending.
If the taxpayer* fails to substantially comply with any formal document request arising out of the examination of the tax treatment of any item (hereinafter in this section referred to as the “examined item”) before the 90th day after the date of the mailing of such request on motion by the Secretary*, any court having jurisdiction of a civil proceeding in which the tax treatment of the examined item is an issue shall prohibit the introduction by the taxpayer of any foreign-based documentation covered by such request.
Subsection (a) shall not apply with respect to any documentation if the taxpayer establishes that the failure to provide the documentation as requested by the Secretary is due to reasonable cause.
For purposes of paragraph (1), the fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the requested documentation is not reasonable cause.
For purposes of this section—
The term “formal document request” means any request (made after the normal request procedures have failed to produce the requested documentation) for the production of foreign-based documentation which is mailed by registered or certified mail to the taxpayer at his last known address and which sets forth—
the time and place for the production of the documentation,
a statement of the reason the documentation previously produced (if any) is not sufficient,
a description of the documentation being sought, and
the consequences to the taxpayer of the failure to produce the documentation described in subparagraph (C).
Notwithstanding any other law or rule of law, any person to whom a formal document request is mailed shall have the right to begin a proceeding to quash such request not later than the 90th day after the day such request was mailed. In any such proceeding, the Secretary may seek to compel compliance with such request.
The United States district court for the district in which the person (to whom the formal document request is mailed) resides or is found shall have jurisdiction to hear any proceeding brought under subparagraph (A). An order denying the petition shall be deemed a final order which may be appealed.
The running of the 90-day period referred to in subsection (a) shall be suspended during any period during which a proceeding brought under subparagraph (A) is pending.
For purposes of this section—
The term “foreign-based documentation” means any documentation which is outside the United States and which may be relevant or material to the tax treatment of the examined item.
The term “documentation” includes books and records.
The Secretary, and any court having jurisdiction over a proceeding under subsection (c)(2), may extend the 90-day period referred to in subsection (a).
If any person takes any action as provided in subsection (c)(2), the running of any period of limitations under section 6501 (relating to the assessment and collection of tax) or under section 6531 (relating to criminal prosecutions) with respect to such person shall be suspended for the period during which the proceeding under such subsection, and appeals therein, are pending.
Source credit: (Added Pub. L. 97–248, title III, § 337(a), Sept. 3, 1982, 96 Stat. 629; amended Pub. L. 98–369, div. A, title VII, § 714(k), July 18, 1984, 98 Stat. 963.)
- 1982Enacted · Pub. L. 97-248 · 96 Stat. 629
- 1984Amended · Pub. L. 98-369 · 98 Stat. 963
A history note hasn’t been published yet. The record shows enactment by Pub. L. 97-248 on 1982-09-03.
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