r/title-26-INTERNAL-REVENUE-CODE wiki — defined terms

“employment taxes” applies in that section

the term “employment taxes” means the taxes imposed by subtitle C. (d) Authority to abate penalty where deposit sent to Secretary The Secretary may abate the penalty imposed by subsection (a) with respect to the first time a depositor is required to make a deposit if the amount required to be deposited is inadvertently sent to the Secretary instead of to the appropriate government depository.

“underpayment” applies in that section

The term “underpayment” means the excess of the amount of the tax required to be deposited over the amount, if any, thereof deposited on or before the date prescribed therefor. (c) Exception for first-time depositors of employment taxes The Secretary may waive the penalty imposed by subsection (a) on a person’s inadvertent failure to deposit any employment tax if— (1) such person meets the requirements referred to in section 7430(c)(4)(A)(ii), (2) such failure— (A) occurs during the first quarter that such person was required to deposit any employment tax; or (B) if such person is required to change the frequency of deposits of any employment tax, relates to the first deposit to which such …

“disregard” applies in that section

The terms “negligence” and “disregard” have the same meaning as when such terms are used in section 6662.

“eligible child” applies in that section

The term “eligible child” has the meaning given such term under section 6434. (2) Negligence; disregard

“negligence” applies in that section

The terms “negligence” and “disregard” have the same meaning as when such terms are used in section 6662.

“disallowance of an applicable energy credit” applies in that section

the term “disallowance of an applicable energy credit” means the disallowance of a credit under section 45X, 45Y, or 48E by reason of overstating the material assistance cost ratio (as determined under section 7701(a)(52)) with respect to any qualified facility, energy storage technology, or facility which produces eligible components.

“disregard” applies in that section

the term “disregard” includes any careless, reckless, or intentional disregard. (d) Substantial understatement of income tax (1) Substantial understatement (A) In general For purposes of this section, there is a substantial understatement of income tax for any taxable year if the amount of the understatement for the taxable year exceeds the greater of— (i) 10 percent of the tax required to be shown on the return for the taxable year, or (ii) $5,000.

“gross valuation misstatements” applies in that section

The term “gross valuation misstatements” means— (A) any substantial valuation misstatement under chapter 1 as determined under subsection (e) by substituting— (i) in paragraph (1)(A), “200 percent” for “150 percent”, (ii) in paragraph (1)(B)(i)— (I) “400 percent” for “200 percent”, and (II) “25 percent” for “50 percent”, and (iii) in paragraph (1)(B)(ii)— (I) “$20,000,000” for “$5,000,000”, and (II) “20 percent” for “10 percent”.

“inconsistent estate basis” applies in that section

the term “inconsistent estate basis” means any portion of an underpayment attributable to the failure to comply with section 1014(f). (l) Increase in penalty in case of overstatement of qualified charitable contributions In the case of any portion of an underpayment which is attributable to one or more overstatements of the deduction provided in section 170(p), subsection (a) shall be applied with respect to such portion by substituting “50 percent” for “20 percent”.

“negligence” applies in that section

the term “negligence” includes any failure to make a reasonable attempt to comply with the provisions of this title, and

“net section 482 transfer price adjustment” applies in that section

The term “net section 482 transfer price adjustment” means, with respect to any taxable year, the net increase in taxable income for the taxable year (determined without regard to any amount carried to such taxable year from another taxable year) resulting from adjustments under section 482 in the price for any property or services (or for the use of property).

“nondisclosed noneconomic substance transaction” applies in that section

the term “nondisclosed noneconomic substance transaction” means any portion of a transaction described in subsection (b)(6) with respect to which the relevant facts affecting the tax treatment are not adequately disclosed in the return nor in a statement attached to the return. (3) Special rule for amended returns In no event shall any amendment or supplement to a return of tax be taken into account for purposes of this subsection if the amendment or supplement is filed after the earlier of the date the taxpayer is first contacted by the Secretary regarding the examination of the return or such other date as is specified by the Secretary.

“tax shelter” applies in that section

the term “tax shelter” means— (I) a partnership or other entity, (II) any investment plan or arrangement, or (III) any other plan or arrangement, if a significant purpose of such partnership, entity, plan, or arrangement is the avoidance or evasion of Federal income tax. (3) Secretarial list The Secretary may prescribe a list of positions which the Secretary believes do not meet 1 or more of the standards specified in paragraph (2)(B)(i), section 6664(d)(3), and section 6694(a)(1). Such list (and any revisions thereof) shall be published in the Federal Register or the Internal Revenue Bulletin.

“understatement” applies in that section

the term “understatement” means the excess of— (i) the amount of the tax required to be shown on the return for the taxable year, over (ii) the amount of the tax imposed which is shown on the return, reduced by any rebate (within the meaning of section 6211(b)(2)). The excess under the preceding sentence shall be determined without regard to items to which section 6662A applies.

“undisclosed foreign financial asset” applies in that section

the term “undisclosed foreign financial asset” means, with respect to any taxable year, any asset with respect to which information was required to be provided under section 6038, 6038B, 6038D, 6046A, or 6048 for such taxable year but was not provided by the taxpayer as required under the provisions of those sections. (3) Increase in penalty for undisclosed foreign financial asset understatements In the case of any portion of an underpayment which is attributable to any undisclosed foreign financial asset understatement, subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”.

“undisclosed foreign financial asset understatement” applies in that section

the term “undisclosed foreign financial asset understatement” means, for any taxable year, the portion of the understatement for such taxable year which is attributable to any transaction involving an undisclosed foreign financial asset. (2) Undisclosed foreign financial asset For purposes of this subsection,

“reportable transaction understatement” applies in that section

The term “reportable transaction understatement” means the sum of— (A) the product of— (i) the amount of the increase (if any) in taxable income which results from a difference between the proper tax treatment of an item to which this section applies and the taxpayer’s treatment of such item (as shown on the taxpayer’s return of tax), and (ii) the highest rate of tax imposed by section 1 (section 11 in the case of a taxpayer which is a corporation), and (B) the amount of the decrease (if any) in the aggregate amount of credits determined under subtitle A which results from a difference between the taxpayer’s treatment of an item to which this section applies (as shown on the taxpayer’s …

“charitable deduction property” applies in that section

The term “charitable deduction property” means any property contributed by the taxpayer in a contribution for which a deduction was claimed under section 170. For purposes of paragraph (3), such term shall not include any securities for which (as of the date of the contribution) market quotations are readily available on an established securities market. (B) Qualified appraisal

“qualified appraisal” applies in that section

The term “qualified appraisal” has the meaning given such term by section 170(f)(11)(E)(i). (C) Qualified appraiser

“qualified appraiser” applies in that section

The term “qualified appraiser” has the meaning given such term by section 170(f)(11)(E)(ii). (d) Reasonable cause exception for reportable transaction understatements (1) In general No penalty shall be imposed under section 6662A with respect to any portion of a reportable transaction understatement if it is shown that there was a reasonable cause for such portion and that the taxpayer acted in good faith with respect to such portion. (2) Exception Paragraph (1) shall not apply to any portion of a reportable transaction understatement which is attributable to one or more transactions described in section 6662(b)(6).

“rebate” applies throughout its part

the term “rebate” means so much of an abatement, credit, refund, or other repayment, as was made on the ground that the tax imposed was less than the excess of the amount specified in paragraph (1) over the rebates previously made. A rule similar to the rule of section 6211(b)(4) shall apply for purposes of this subsection. (b) Penalties applicable only where return filed The penalties provided in this part shall apply only in cases where a return of tax is filed (other than a return prepared by the Secretary under the authority of section 6020(b)).

“underpayment” applies throughout its part

the term “underpayment” means the amount by which any tax imposed by this title exceeds the excess of— (1) the sum of— (A) the amount shown as the tax by the taxpayer on his return, plus (B) amounts not so shown previously assessed (or collected without assessment), over (2) the amount of rebates made. For purposes of paragraph (2),

“excessive amount” applies in that section

the term “excessive amount” means in the case of any person the amount by which— (1) the amount claimed under section 6416(a)(4), 6420, 6421, 6427, or 6435, as the case may be, for any period, exceeds (2) the amount allowable under such section for such period. (c) Assessment and collection of penalty For assessment and collection of penalty provided by subsection (a), see section 6206.

“excessive amount” applies in that section

the term “excessive amount” means in the case of any person the amount by which the amount of the claim for refund or credit for any taxable year exceeds the amount of such claim allowable under this title for such taxable year. (c) Noneconomic substance transactions treated as lacking reasonable cause For purposes of this section, any excessive amount which is attributable to any transaction described in section 6662(b)(6) shall not be treated as due to reasonable cause. (d) Coordination with other penalties This section shall not apply to any portion of the excessive amount of a claim for refund or credit which is subject to a penalty imposed under part II of subchapter A of chapter 68.

“gross reportable amount” applies in that section

the term “gross reportable amount” means— (1) the gross value of the property involved in the event (determined as of the date of the event) in the case of a failure relating to section 6048(a), (2) the gross value of the portion of the trust’s assets at the close of the year treated as owned by the United States person in the case of a failure relating to section 6048(b)(1), and (3) the gross amount of the distributions in the case of a failure relating to section 6048(c). (d) Reasonable cause exception No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect.

“foreign tax redetermination” applies in that section

the term “foreign tax redetermination” means any redetermination for which a notice is required under subsection (c) of section 905 or paragraph (2) of section 404A(g).

“understatement of liability” applies in that section

the term “understatement of liability” means any understatement of the net amount payable with respect to any tax imposed by this title or any overstatement of the net amount creditable or refundable with respect to any such tax. Except as otherwise provided in subsection (d), the determination of whether or not there is an understatement of liability shall be made without regard to any administrative or judicial action involving the taxpayer. (f) Cross reference For definition of tax return preparer, see section 7701(a)(36).

“claim for refund” applies in that section

The term “claim for refund” means a claim for refund of, or credit against, any tax imposed by this title.

“return” applies in that section

The term “return” means any return of any tax imposed by this title, any administrative adjustment request under section 6227, and any partnership adjustment tracking report under section 6226(b)(4)(A). (2) Claim for refund

“gross valuation overstatement” applies in that section

the term “gross valuation overstatement” means any statement as to the value of any property or services if— (A) the value so stated exceeds 200 percent of the amount determined to be the correct valuation, and (B) the value of such property or services is directly related to the amount of any deduction or credit allowable under chapter 1 to any participant. (2) Authority to waive The Secretary may waive all or any part of the penalty provided by subsection (a) with respect to any gross valuation overstatement on a showing that there was a reasonable basis for the valuation and that such valuation was made in good faith.

“procures” applies in that section

the term “procures” includes— (A) ordering (or otherwise causing) a subordinate to do an act, and (B) knowing of, and not attempting to prevent, participation by a subordinate in an act. (2) Subordinate For purposes of paragraph (1),

“subordinate” applies in that section

the term “subordinate” means any other person (whether or not a director, officer, employee, or agent of the taxpayer involved) over whose activities the person has direction, supervision, or control. (d) Taxpayer not required to have knowledge Subsection (a) shall apply whether or not the understatement is with the knowledge or consent of the persons authorized or required to present the return, affidavit, claim, or other document.

“specified frivolous submission” applies in that section

The term “specified frivolous submission” means a specified submission if any portion of such submission— (i) is based on a position which the Secretary has identified as frivolous under subsection (c), or (ii) reflects a desire to delay or impede the administration of Federal tax laws. (B) Specified submission

“specified submission” applies in that section

The term “specified submission” means— (i) a request for a hearing under— (I) section 6320 (relating to notice and opportunity for hearing upon filing of notice of lien), or (II) section 6330 (relating to notice and opportunity for hearing before levy), and (ii) an application under— (I) section 6159 (relating to agreements for payment of tax liability in installments), (II) section 7122 (relating to compromises), or (III) section 7811 (relating to taxpayer assistance orders).

“listed transaction” applies in that section

The term “listed transaction” means a reportable transaction which is the same as, or substantially similar to, a transaction specifically identified by the Secretary as a tax avoidance transaction for purposes of section 6011. (d) Authority to rescind penalty (1) In general The Commissioner of Internal Revenue may rescind all or any portion of any penalty imposed by this section with respect to any violation if— (A) the violation is with respect to a reportable transaction other than a listed transaction, and (B) rescinding the penalty would promote compliance with the requirements of this title and effective tax administration.

“reportable transaction” applies in that section

The term “reportable transaction” means any transaction with respect to which information is required to be included with a return or statement because, as determined under regulations prescribed under section 6011, such transaction is of a type which the Secretary determines as having a potential for tax avoidance or evasion. (2) Listed transaction

“mortgage credit certificate” applies in that section

The term “mortgage credit certificate” has the meaning given to such term by section 25(c).

“tax-exempt organization” applies in that section

The term “tax-exempt organization” means any organization which— (A) is described in subsection (c) or (d) of section 501 and exempt from taxation under section 501(a), or (B) is a political organization (as defined in section 527(e)). (2) Day on which failure occurs The day on which any failure referred to in subsection (a) occurs shall be determined under rules similar to the rules of section 6710(d).

“dyed fuel” applies in that section

The term “dyed fuel” means any dyed diesel fuel or kerosene, whether or not the fuel was dyed pursuant to section 4082. (2) Nontaxable use

“nontaxable use” applies in that section

The term “nontaxable use” has the meaning given such term by section 4082(b). (d) Joint and several liability of certain officers and employees If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty.

“information return” applies throughout its part

The term “information return” means— (A) any statement of the amount of payments to another person required by— (i) section 6041(a) or (b) (relating to certain information at source), (ii) section 6042(a)(1) (relating to payments of dividends), (iii) section 6044(a)(1) (relating to payments of patronage dividends), (iv) section 6049(a) (relating to payments of interest), (v) section 6050A(a) (relating to reporting requirements of certain fishing boat operators), (vi) section 6050N(a) (relating to payments of royalties), (vii) section 6051(d) (relating to information returns with respect to income tax withheld), (viii) section 6050R (relating to returns relating to certain purchases of …

“payee statement” applies throughout its part

The term “payee statement” means any statement required to be furnished under— (A) section 6031(b) or (c), 6034A, or 6037(b) (relating to statements furnished by certain pass-thru entities), (B) section 6039(b) (relating to information required in connection with certain options), (C) section 6041(d) (relating to information at source), (D) section 6041A(e) (relating to returns regarding payments of remuneration for services and direct sales), (E) section 6042(c) (relating to returns regarding payments of dividends and corporate earnings and profits), (F) subsections (b) and (d) of section 6043A (relating to returns relating to taxable mergers and acquisitions), (G) section 6044(e) …

“required filing date” applies throughout its part

The term “required filing date” means the date prescribed for filing an information return with the Secretary (determined with regard to any extension of time for filing). (e) Special rule for certain partnership returns If any partnership return under section 6031(a) is required under section 6011(e) to be filed on magnetic media or in other machine-readable form, for purposes of this part, each schedule required to be included with such return with respect to each partner shall be treated as a separate information return.

“specified information reporting requirement” applies throughout its part

The term “specified information reporting requirement” means— (A) the notice required by section 6050K(c)(1) (relating to requirement that transferor notify partnership of exchange), (B) any requirement contained in the regulations prescribed under section 6109 that a person— (i) include his TIN on any return, statement, or other document (other than an information return or payee statement), (ii) furnish his TIN to another person, or (iii) include on any return, statement, or other document (other than an information return or payee statement) made with respect to another person the TIN of such person, 1 (C) any requirement under section 6109(h) that— (i) a person include on his return the …

“penalty” applies in that section

the term “penalty” includes any addition to tax or any additional amount.

“cash” applies in that section

The term “cash” includes any cash equivalent. (2) Cash equivalent

“cash equivalent” applies in that section

The term “cash equivalent” means— (A) foreign currency, (B) any bearer obligation, and (C) any medium of exchange which— (i) is of a type which has been frequently used in illegal activities, and (ii) is specified as a cash equivalent for purposes of this part in regulations prescribed by the Secretary. (3) Value of cash equivalent Any cash equivalent shall be taken into account— (A) in the case of a bearer obligation, at its face amount, and (B) in the case of any other cash equivalent, at its fair market value.

“executor” applies in that section

the term “executor” means the executor or administrator of the decedent appointed, qualified, and acting within the United States. (c) Cross reference For discharge of executor from personal liability for taxes imposed under chapter 11, see section 2204.

“lump-sum offer-in-compromise” applies in that section

the term “lump-sum offer-in-compromise” means any offer of payments made in 5 or fewer installments. (B) Periodic payment offers (i) In general The submission of any periodic payment offer-in-compromise shall be accompanied by the payment of the amount of the first proposed installment. (ii) Failure to make installment during pendency of offer Any failure to make an installment (other than the first installment) due under such offer-in-compromise during the period such offer is being evaluated by the Secretary may be treated by the Secretary as a withdrawal of such offer-in-compromise.

“applicable person” applies in that section

the term “applicable person” means— (1) the President, the Vice President, any employee of the executive office of the President, and any employee of the executive office of the Vice President; and (2) any individual (other than the Attorney General of the United States) serving in a position specified in section 5312 of title 5 , United States Code.

“seriously delinquent tax debt” applies in that section

the term “seriously delinquent tax debt” means an unpaid, legally enforceable Federal tax liability of an individual— (A) which has been assessed, (B) which is greater than $50,000, and (C) with respect to which— (i) a notice of lien has been filed pursuant to section 6323 and the administrative rights under section 6320 with respect to such filing have been exhausted or have lapsed, or (ii) a levy is made pursuant to section 6331.

“specified conduct” applies in that section

the term “specified conduct” means any action, or failure to take action, which is— (1) subject to penalty under section 6700, 6701, 6707, or 6708, or (2) in violation of any requirement under regulations issued under section 330 of title 31 , United States Code. (d) Citizens and residents outside the United States If any citizen or resident of the United States does not reside in, and does not have his principal place of business in, any United States judicial district, such citizen or resident shall be treated for purposes of this section as residing in the District of Columbia.

“administrative proceeding” applies in that section

The term “administrative proceeding” means any procedure or other action before the Internal Revenue Service. (6) Court proceedings

“applicable published guidance” applies in that section

the term “applicable published guidance” means— (I) regulations, revenue rulings, revenue procedures, information releases, notices, and announcements, and (II) any of the following which are issued to the taxpayer: private letter rulings, technical advice memoranda, and determination letters.

“court proceeding” applies in that section

The term “court proceeding” means any civil action brought in a court of the United States (including the Tax Court and the United States Court of Federal Claims). (7) Position of United States

“position of the United States” applies in that section

The term “position of the United States” means— (A) the position taken by the United States in a judicial proceeding to which subsection (a) applies, and (B) the position taken in an administrative proceeding to which subsection (a) applies as of the earlier of— (i) the date of the receipt by the taxpayer of the notice of the decision of the Internal Revenue Service Independent Office of Appeals, or (ii) the date of the notice of deficiency. (d) Special rules for payment of costs (1) Reasonable administrative costs An award for reasonable administrative costs shall be payable out of funds appropriated under section 1304 of title 31 , United States Code.

“prevailing party” applies in that section

The term “prevailing party” means any party in any proceeding to which subsection (a) applies (other than the United States or any creditor of the taxpayer involved)— (i) which— (I) has substantially prevailed with respect to the amount in controversy, or (II) has substantially prevailed with respect to the most significant issue or set of issues presented, and (ii) which meets the requirements of the 1st sentence of section 2412(d)(1)(B) of title 28 , United States Code (as in effect on October 22, 1986 ) except to the extent differing procedures are established by rule of court and meets the requirements of section 2412(d)(2)(B) of such title 28 (as so in effect).

“qualified offer” applies in that section

The term “qualified offer” means a written offer which— (A) is made by the taxpayer to the United States during the qualified offer period; (B) specifies the offered amount of the taxpayer’s liability (determined without regard to interest); (C) is designated at the time it is made as a qualified offer for purposes of this section; and (D) remains open during the period beginning on the date it is made and ending on the earliest of the date the offer is rejected, the date the trial begins, or the 90th day after the date the offer is made. (2) Qualified offer period For purposes of this subsection,

“qualified offer period” applies in that section

the term “qualified offer period” means the period— (A) beginning on the date on which the first letter of proposed deficiency which allows the taxpayer an opportunity for administrative review in the Internal Revenue Service Independent Office of Appeals is sent, and (B) ending on the date which is 30 days before the date the case is first set for trial.

“reasonable administrative costs” applies in that section

The term “reasonable administrative costs” means— (A) any administrative fees or similar charges imposed by the Internal Revenue Service, and (B) expenses, costs, and fees described in paragraph (1)(B), except that any determination made by the court under clause (ii) or (iii) thereof shall be made by the Internal Revenue Service in cases where the determination under paragraph (4)(C) of the awarding of reasonable administrative costs is made by the Internal Revenue Service.

“reasonable litigation costs” applies in that section

The term “reasonable litigation costs” includes— (A) reasonable court costs, and (B) based upon prevailing market rates for the kind or quality of services furnished— (i) the reasonable expenses of expert witnesses in connection with a court proceeding, except that no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the United States, (ii) the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party’s case, and (iii) reasonable fees paid or incurred for the services of attorneys in connection with the court proceeding, …

“information return” applies in that section

the term “information return” means any statement described in section 6724(d)(1)(A).

“employment tax” applies in that section

The term “employment tax” means any tax imposed by subtitle C.

“judge” applies in that section

The term “judge” means the chief judge or a judge of the Tax Court; but such term does not include any individual performing judicial duties pursuant to subsection (c). (3) In any determination of length of service as judge there shall be included all periods (whether or not consecutive) during which an individual served as judge, as judge of the Tax Court of the United States, or as a member of the Board of Tax Appeals. (b) Retirement (1) Any judge shall retire upon attaining the age of 70.

“Tax Court” applies in that section

The term “Tax Court” means the United States Tax Court.;

“assassinated” applies in that section

The terms “assassinated” and “assassination” mean the killing of a judge or special trial judge that is motivated by the performance by the judge or special trial judge of his or her official duties. (b) Election (1) Judges Any judge may by written election filed while he is a judge (except that in the case of an individual who is not reappointed following expiration of his term of office, it may be made at any time before the day after the day on which his successor takes office) bring himself within the purview of this section.

“assassination” applies in that section

The terms “assassinated” and “assassination” mean the killing of a judge or special trial judge that is motivated by the performance by the judge or special trial judge of his or her official duties. (b) Election (1) Judges Any judge may by written election filed while he is a judge (except that in the case of an individual who is not reappointed following expiration of his term of office, it may be made at any time before the day after the day on which his successor takes office) bring himself within the purview of this section.

“chief judge” applies in that section

The term “chief judge” means the chief judge of the Tax Court.;

“dependent child” applies in that section

The term “dependent child” means an unmarried child, including a dependent stepchild or an adopted child, who is under the age of 18 years or who because of physical or mental disability is incapable of self-support.;

“judge” applies in that section

The term “judge” means the chief judge or a judge of the Tax Court, including any individual receiving retired pay (or compensation in lieu of retired pay) under section 7447 whether or not performing judicial duties pursuant to section 7447(c).;

“judge’s salary” applies in that section

The term “judge’s salary” means the salary of a judge received under section 7443(c), retired pay received under section 7447(d), and compensation (in lieu of retired pay) received under section 7447(c).;

“special trial judge” applies in that section

The term “special trial judge” means a judicial officer appointed pursuant to section 7443A, including any individual receiving an annuity under chapter 83 or 84 of title 5, United States Code.;

“special trial judge’s salary” applies in that section

The term “special trial judge’s salary” means the salary of a special trial judge received under section 7443A(d), any amount received as an annuity under chapter 83 or 84 of title 5, United States Code.;

“surviving spouse” applies in that section

The term “surviving spouse” means a surviving spouse of an individual, who either (A) shall have been married to such individual for at least 2 years immediately preceding his death or (B) is a parent of issue by such marriage, and who has not remarried.;

“survivors annuity fund” applies in that section

The term “survivors annuity fund” means the Tax Court judges survivors annuity fund established by this section.;

“Tax Court” applies in that section

The term “Tax Court” means the United States Tax Court.;

“unfunded liability” applies in that section

the term “unfunded liability” means the amount estimated by the Secretary to be equal to the excess (as of the close of the fiscal year involved) of— (i) the present value of all benefits payable from the survivors annuity fund (determined on an annual basis in accordance with section 9503 of title 31 , United States Code), over (ii) the sum of— (I) the present values of future deductions under subsection (c) and future deposits under subsection (d), plus (II) the balance in such fund as of the close of such fiscal year.

“filing location” applies in that section

the term “filing location” means— (A) the office of the clerk of the Tax Court, or (B) any on-line portal made available by the Tax Court for electronic filing of petitions.

“foreign trust or estate” applies in that section

the term “foreign trust or estate” includes an estate or trust, any fiduciary of which is a foreign corporation or nonresident alien individual; and the term “control” is not limited to legal control. (c) Incidental powers The Tax Court and each division thereof shall have power to punish by fine or imprisonment, at its discretion, such contempt of its authority, and none other, as— (1) misbehavior of any person in its presence or so near thereto as to obstruct the administration of justice; (2) misbehavior of any of its officers in their official transactions; or (3) disobedience or resistance to its lawful writ, process, order, rule, decree, or command.

“retirement plan” applies in that section

the term “retirement plan” means— (1) a pension, profit-sharing, or stock bonus plan described in section 401(a) or a trust which is part of such a plan, or (2) an annuity plan described in section 403(a). (d) Cross reference For provisions concerning intervention by Pension Benefit Guaranty Corporation and Secretary of Labor in actions brought under this section and right of Pension Benefit Guaranty Corporation to bring action, see section 3001(c) of subtitle A of title III of the Employee Retirement Income Security Act of 1974.

“designated delivery service” applies in that section

the term “designated delivery service” means any delivery service provided by a trade or business if such service is designated by the Secretary for purposes of this section. The Secretary may designate a delivery service under the preceding sentence only if the Secretary determines that such service— (A) is available to the general public, (B) is at least as timely and reliable on a regular basis as the United States mail, (C) records electronically to its data base, kept in the regular course of its business, or marks on the cover in which any item referred to in this section is to be delivered, the date on which such item was given to such trade or business for delivery, and (D) meets …

“payment” applies in that section

the term “payment” includes “deposit”, and the reference to the postmark date refers to the date of mailing. (3) No application to certain deposits Paragraph (1) shall not apply with respect to any deposit of $20,000 or more by any person who is required to deposit any tax more than once a month.

“legal holiday” applies in that section

the term “legal holiday” means a legal holiday in the District of Columbia; and in the case of any return, statement, or other document required to be filed, or any other act required under authority of the internal revenue laws to be performed, at any office of the Secretary or at any other office of the United States or any agency thereof, located outside the District of Columbia but within an internal revenue district, the term “legal holiday” also means a Statewide legal holiday in the State where such office is located.

“Desert Shield services” applies in that section

the term “Desert Shield services” means any services in the Armed Forces of the United States or in support of such Armed Forces if— (A) such services are performed in the area designated by the President pursuant to this subparagraph as the “Persian Gulf Desert Shield area”, and (B) such services are performed during the period beginning on August 2, 1990 , and ending on the date on which any portion of the area referred to in subparagraph (A) is designated by the President as a combat zone pursuant to section 112. (g) Qualified hospitalization For purposes of subsection (a),

“qualified hospitalization” applies in that section

the term “qualified hospitalization” means— (1) any hospitalization outside the United States, and (2) any hospitalization inside the United States, except that not more than 5 years of hospitalization may be taken into account under this paragraph. Paragraph (2) shall not apply for purposes of applying this section with respect to the spouse of an individual entitled to the benefits of subsection (a).

“disaster area” applies in that section

the term “disaster area” means an area in which a major disaster for which the President provides financial assistance under section 408 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act ( 42 U.S.C. 5174 ) occurs.

“qualified State declared disaster” applies in that section

the term “qualified State declared disaster” means, with respect to any State, any natural catastrophe (including any hurricane, tornado, storm, high water, winddriven water, tidal wave, tsunami, earthquake, volcanic eruption, landslide, mudslide, snowstorm, or drought), or, regardless of cause, any fire, flood, or explosion, in any part of the State, which in the determination of the Governor of such State (or the Mayor, in the case of the District of Columbia) causes damage of sufficient severity and magnitude to warrant the application of the rules of this section. (3) State For purposes of this section,

“qualified taxpayer” applies in that section

the term “qualified taxpayer” means— (A) any individual whose principal residence (for purposes of section 1033(h)(4)) is located in a disaster area, (B) any taxpayer if the taxpayer’s principal place of business (other than the business of performing services as an employee) is located in a disaster area, (C) any individual who is a relief worker affiliated with a recognized government or philanthropic organization and who is assisting in a disaster area, (D) any taxpayer whose records necessary to meet a deadline for an act described in section 7508(a)(1) are maintained in a disaster area, (E) any individual visiting a disaster area who was killed or injured as a result of the disaster, …

“significant fire” applies in that section

the term “significant fire” means any fire with respect to which assistance is provided under section 420 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act. (f) 1 Application to limitation on credit or refund For purposes of section 6511(b)(2)(A), any period disregarded under this section with respect to the time prescribed for filing any return of tax shall be treated as an extension of time for filing such return.

“State” applies in that section

the term “State” includes the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. (d) Special rules for overpayments The rules of section 7508(b) shall apply for purposes of this section.

“agreement vessel” applies in that section

the term “agreement vessel” includes barges and containers which are part of the complement of such vessel and which are provided for in the agreement. (b) Requirements as to investments (1) In general Amounts in any capital construction fund shall be kept in the depository or depositories specified in the agreement and shall be subject to such trustee and other fiduciary requirements as may be specified by the Secretary.

“adjusted highest section 1 rate” applies in that section

the term “adjusted highest section 1 rate” means the highest rate of tax in effect under section 1 as of the end of the base year plus 1 percentage point (or, in the case of applicable election years beginning in 1987, 36 percent). (c) Refund of payments (1) In general If, for any applicable election year, the amount determined under subsection (b)(2) exceeds the amount determined under subsection (b)(1), the entity shall be entitled to a refund of such excess for such year. (2) Termination of elections, etc.

“applicable election year” applies in that section

The term “applicable election year” means any taxable year of a partnership or S corporation with respect to which an election is in effect under section 444. (3) Requirement of reporting Each partnership or S corporation which makes an election under section 444 shall include on any required return or statement such information as the Secretary shall prescribe as is necessary to carry out the provisions of this section. (4) Net required payment balance

“applicable payment” applies in that section

The term “applicable payment” means amounts paid by a partnership or S corporation which are includible in gross income of a partner or shareholder. (B) Exceptions The term “applicable payment” shall not include any— (i) gain from the sale or exchange of property between the partner or shareholder and the partnership or S corporation, and (ii) dividend paid by the S corporation. (4) Applicable percentage The applicable percentage is the percentage determined in accordance with the following table: If the applicable election year of the partnership or S corporation begins during: The applicable percentage is: 1987 25 1988 50 1989 75 1990 or thereafter 100.

“base year” applies in that section

The term “base year” means, with respect to any applicable election year, the taxable year of the partnership or S corporation preceding such applicable election year. (B) Applicable election year

“deferral period” applies in that section

The term “deferral period” has the meaning given to such term by section 444(b)(4). (2) Years (A) Base year

“deferral ratio” applies in that section

the term “deferral ratio” means the ratio which the number of months in the deferral period of the base year bears to the number of months in the partnership’s or S corporation’s taxable year. (2) Net income Net income is determined by taking into account the aggregate amount of the following items— (A) Partnerships In the case of a partnership, net income shall be the amount (not below zero) determined by taking into account the aggregate amount of the partnership’s items described in section 702(a) (other than credits and tax-exempt income).

“guaranteed payment” applies in that section

the term “guaranteed payment” means any payment referred to in section 707(c). (e) Other definitions and special rules For purposes of this section— (1) Deferral period

“net required payment balance” applies in that section

The term “net required payment balance” means the excess (if any) of— (A) the aggregate of the required payments under this section for all preceding applicable election years, over (B) the aggregate amount allowable as a refund to the entity under subsection (c) for all preceding applicable election years. (f) Administrative provisions (1) In general Except as otherwise provided in this subsection or in regulations prescribed by the Secretary, any payment required by this section shall be assessed and collected in the same manner as if it were a tax imposed by subtitle C.

“required payment” applies in that section

the term “required payment” means, with respect to any applicable election year of a partnership or S corporation, an amount equal to— (1) the excess of the product of— (A) the applicable percentage of the adjusted highest section 1 rate, multiplied by (B) the net base year income of the entity, over (2) the net required payment balance. For purposes of paragraph (1)(A),

“underpayment” applies in that section

the term “underpayment” means the excess of the amount of the payment required under this section over the amount (if any) of such payment paid on or before the date prescribed therefor. No penalty shall be imposed under this subparagraph on any failure which is shown to be due to reasonable cause and not willful neglect. (B) Negligence and fraud penalties made applicable For purposes of part II of subchapter A of chapter 68, any payment required by this section shall be treated as a tax. (C) Willful failure If any partnership or S corporation willfully fails to comply with the requirements of this section, section 444 shall cease to apply with respect to such partnership or S corporation.

“tables” applies in that section

the term “tables” includes formulas.

“valuation date” applies in that section

the term “valuation date” means the date as of which the valuation is made. (e) Tables to include formulas For purposes of this section,

“major income categories” applies in that section

The term “major income categories” means the following: (A) Social security, medicare, and unemployment and other retirement taxes. (B) Personal income taxes. (C) Corporate income taxes. (D) Borrowing to cover the deficit. (E) Excise, customs, estate, gift, and miscellaneous taxes. (3) Required footnotes The pie-shaped graph showing the major outlay categories shall include the following footnotes: (A) A footnote to the category referred to in paragraph (1)(A) showing the percentage of the total outlays which is for defense, the percentage of total outlays which is for veterans, and the percentage of total outlays which is for foreign affairs.

“major outlay categories” applies in that section

The term “major outlay categories” means the following: (A) Defense, veterans, and foreign affairs. (B) Social security, medicare, and other retirement. (C) Physical, human, and community development. (D) Social programs. (E) Law enforcement and general government. (F) Interest on the debt. (2) Major income categories

“federally authorized tax practitioner” applies in that section

The term “federally authorized tax practitioner” means any individual who is authorized under Federal law to practice before the Internal Revenue Service if such practice is subject to Federal regulation under section 330 of title 31 , United States Code. (B) Tax advice

“tax advice” applies in that section

The term “tax advice” means advice given by an individual with respect to a matter which is within the scope of the individual’s authority to practice described in subparagraph (A). (b) Section not to apply to communications regarding tax shelters The privilege under subsection (a) shall not apply to any written communication which is— (1) between a federally authorized tax practitioner and— (A) any person, (B) any director, officer, employee, agent, or representative of the person, or (C) any other person holding a capital or profits interest in the person, and (2) in connection with the promotion of the direct or indirect participation of the person in any tax shelter (as defined in …

“clinic” applies in that section

The term “clinic” includes— (A) a clinical program at an accredited law, business, or accounting school in which students represent low-income taxpayers in controversies arising under this title; and (B) an organization described in section 501(c) and exempt from tax under section 501(a) which satisfies the requirements of paragraph (1) through representation of taxpayers or referral of taxpayers to qualified representatives. (3) Qualified representative

“qualified low-income taxpayer clinic” applies in that section

The term “qualified low-income taxpayer clinic” means a clinic that— (i) does not charge more than a nominal fee for its services (except for reimbursement of actual costs incurred); and (ii) (I) represents low-income taxpayers in controversies with the Internal Revenue Service; or (II) operates programs to inform individuals for whom English is a second language about their rights and responsibilities under this title.

“qualified representative” applies in that section

The term “qualified representative” means any individual (whether or not an attorney) who is authorized to practice before the Internal Revenue Service or the applicable court. (c) Special rules and limitations (1) Aggregate limitation Unless otherwise provided by specific appropriation, the Secretary shall not allocate more than $6,000,000 per year (exclusive of costs of administering the program) to grants under this section. (2) Limitation on annual grants to a clinic The aggregate amount of grants which may be made under this section to a clinic for a year shall not exceed $100,000.

“applicable taxpayer” applies in that section

The term “applicable taxpayer” means a taxpayer whose income for the taxable year does not exceed an amount equal to the completed phaseout amount under section 32(b) for a married couple filing a joint return with three or more qualifying children, as determined in a revenue procedure or other published guidance. (4) Underserved population

“eligible organization” applies in that section

The term “eligible organization” means— (i) an institution of higher education which is described in section 102 (other than subsection (a)(1)(C) thereof) of the Higher Education Act of 1965 ( 20 U.S.C. 1002 ), as in effect on the date of the enactment of this section, and which has not been disqualified from participating in a program under title IV of such Act, (ii) an organization described in section 501(c) and exempt from tax under section 501(a), (iii) a local government agency, including— (I) a county or municipal government agency, and (II) an Indian tribe, as defined in section 4(13) of the Native American Housing Assistance and Self-Determination Act of 1996 ( 25 U.S.C.

“qualified entity” applies in that section

The term “qualified entity” means any entity which— (i) is an eligible organization, (ii) is in compliance with Federal tax filing and payment requirements, (iii) is not debarred or suspended from Federal contracts, grants, or cooperative agreements, and (iv) agrees to provide documentation to substantiate any matching funds provided pursuant to the grant program under this section. (B) Eligible organization

“qualified return preparation program” applies in that section

The term “qualified return preparation program” means any program— (A) which provides assistance to individuals, not less than 90 percent of whom are applicable taxpayers, in preparing and filing Federal income tax returns, (B) which is administered by a qualified entity, (C) in which all volunteers who assist in the preparation of Federal income tax returns meet the training requirements prescribed by the Secretary, and (D) which uses a quality review process which reviews 100 percent of all returns. (2) Qualified entity (A) In general

“underserved population” applies in that section

The term “underserved population” includes populations of persons with disabilities, persons with limited English proficiency, Native Americans, individuals living in rural areas, members of the Armed Forces and their spouses, and the elderly. (f) Special rules and limitations (1) Duration of grants Upon application of a qualified return preparation program, the Secretary is authorized to award a multi-year grant not to exceed 3 years. (2) Aggregate limitation Unless otherwise provided by specific appropriation, the Secretary shall not allocate more than $30 million per fiscal year (exclusive of costs of administering the program) to grants under this section.

“certified individual” applies in that section

the term “certified individual” means any individual for whom a qualified health insurance costs credit eligibility certificate is in effect. (d) Qualified health insurance costs eligibility certificate (1) In general For purposes of this section,

“qualified health insurance costs eligibility certificate” applies in that section

the term “qualified health insurance costs eligibility certificate” means any written statement that an individual is an eligible individual (as defined in section 35(c)) if such statement provides such information as the Secretary may require for purposes of this section and— (A) in the case of an eligible TAA recipient (as defined in section 35(c)(2)) or an eligible alternative TAA recipient (as defined in section 35(c)(3)), is certified by the Secretary of Labor (or by any other person or entity designated by the Secretary), or (B) in the case of an eligible PBGC pension recipient (as defined in section 35(c)(4)), is certified by the Pension Benefit Guaranty Corporation (or by any other …

“annual advance amount” applies in that section

the term “annual advance amount” means, with respect to any taxpayer for any calendar year, the amount (if any) which is estimated by the Secretary as being equal to 50 percent of the amount which would be treated as allowed under subpart C of part IV of subchapter A of chapter 1 by reason of section 24(i)(1) for the taxpayer’s taxable year beginning in such calendar year if— (A) the status of the taxpayer as a taxpayer described in section 24(i)(1) is determined with respect to the reference taxable year, (B) the taxpayer’s modified adjusted gross income for such taxable year is equal to the taxpayer’s modified adjusted gross income for the reference taxable year, (C) the only children of …

“reference taxable year” applies in that section

the term “reference taxable year” means, with respect to any taxpayer for any calendar year, the taxpayer’s taxable year beginning in the preceding calendar year or, in the case of taxpayer who did not file a return of tax for such taxable year, the taxpayer’s taxable year beginning in the second preceding calendar year.

“eligible employer” applies in that section

The term “eligible employer” means an eligible employer (as defined in section 408(p)(2)(C)(i)(I)) which has at least 1 employee who is not a highly compensated employee (as defined in section 414(q)) and is participating in the plan. The determination of whether an employer is an eligible employer under subparagraph (B) shall be made as of the date of the request described in such subparagraph. (iii) Determination of average fees charged For purposes of any determination of average fees charged, any request to which subparagraph (B) applies shall not be taken into account.

“pension benefit plan” applies in that section

The term “pension benefit plan” means a pension, profit-sharing, stock bonus, annuity, or employee stock ownership plan. (ii) Eligible employer

“base amount” applies in that section

the term “base amount” means the greater of— (I) the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with calendar year 2019 (rounded to the nearest multiple of $1,000,000), or (II) $200,000,000. (ii) Inflation adjustment In the case of any calendar year after 2021,

“specified matching amount” applies in that section

The term “specified matching amount” means, with respect to any calendar year, the lesser of— (i) the excess (if any) of— (I) the cost to Puerto Rico of the earned income tax credit for taxable years beginning in or with such calendar year, over (II) the base amount for such calendar year, or (ii) the product of 3, multiplied by the base amount for such calendar year. (B) Base amount (i) Base amount for 2021 In the case of calendar year 2021,

“third-party recordkeeper” applies in that section

the term “third-party recordkeeper” means— (A) any mutual savings bank, cooperative bank, domestic building and loan association, or other savings institution chartered and supervised as a savings and loan or similar association under Federal or State law, any bank (as defined in section 581), or any credit union (within the meaning of section 501(c)(14)(A)), (B) any consumer reporting agency (as defined under section 603(f) of the Fair Credit Reporting Act ( 15 U.S.C. 1681a(f) )), (C) any person extending credit through the use of credit cards or similar devices, (D) any broker (as defined in section 3(a)(4) of the Securities Exchange Act of 1934 ( 15 U.S.C.

“closed” applies in that section

The term “closed” means the date on which the later of the following occurs; (i) all criminal proceedings (other than appeals) are concluded, or (ii) covert activities are concluded, whichever occurs later. (B) Employees

“employees” applies in that section

The term “employees” has the meaning given such term by section 2105 of title 5 , United States Code. (C) Undercover investigative operation

“undercover investigative operation” applies in that section

The term “undercover investigative operation” means any undercover investigative operation of the Service; except that, for purposes of subparagraphs (A) and (C) of paragraph (4), such term only includes an operation which is exempt from section 3302 or 9102 of title 31, United States Code.

“records” applies in that section

the term “records” includes books, papers, and other data. (d) Restriction on examination of records No examination of any records required to be produced under a summons as to which notice is required under subsection (a) may be made— (1) before the close of the 23rd day after the day notice with respect to the summons is given in the manner provided in subsection (a)(2), or (2) where a proceeding under subsection (b)(2)(A) was begun within the 20-day period referred to in such subsection and the requirements of subsection (b)(2)(B) have been met, except in accordance with an order of the court having jurisdiction of such proceeding or with the consent of the person beginning the …

“applicable 5-year period” applies in that section

the term “applicable 5-year period” means the 5-year period beginning on the date the notice taken into account for purposes of subsection (c)(1) was provided. For purposes of the preceding sentence, the rules of subsection (c)(2) shall apply. (g) Treatment of final report of revenue agent Any final report of an agent of the Internal Revenue Service shall be treated as a determination of the Secretary under paragraph (1) of section 7428(a), and any church receiving such a report shall be treated for purposes of sections 7428 and 7430 as having exhausted the administrative remedies available to it. (h) Definitions For purposes of this section— (1) Church

“appropriate high-level Treasury official” applies in that section

The term “appropriate high-level Treasury official” means the Secretary of the Treasury or any delegate of the Secretary whose rank is no lower than that of a principal Internal Revenue officer for an internal revenue region. (i) Section not to apply to criminal investigations, etc.

“church” applies in that section

The term “church” includes— (A) any organization claiming to be a church, and (B) any convention or association of churches. (2) Church tax inquiry

“church records” applies in that section

The term “church records” means all corporate and financial records regularly kept by a church, including corporate minute books and lists of members and contributors. (B) Exception Such term shall not include records acquired— (i) pursuant to a summons to which section 7609 applies, or (ii) from any governmental agency. (5) Inquiry notice date

“church tax examination” applies in that section

The term “church tax examination” means any examination for purposes of making a determination described in paragraph (2) of— (A) church records at the request of the Internal Revenue Service, or (B) the religious activities of any church. (4) Church records (A) In general

“church tax inquiry” applies in that section

The term “church tax inquiry” means any inquiry to a church (other than an examination) to serve as a basis for determining whether a church— (A) is exempt from tax under section 501(a) by reason of its status as a church, or (B) is carrying on an unrelated trade or business (within the meaning of section 513) or otherwise engaged in activities which may be subject to taxation under this title. (3) Church tax examination

“examination notice date” applies in that section

The term “examination notice date” means the date the notice with respect to a church tax examination is provided under subsection (b) to the church. (7) Appropriate high-level Treasury official

“inquiry notice date” applies in that section

The term “inquiry notice date” means the date the notice with respect to a church tax inquiry is provided under subsection (a). (6) Examination notice date

“computer software executable code” applies in that section

The term “computer software executable code” means— (A) any object code, machine code, or other code readable by a computer when loaded into its memory and used directly by such computer to execute instructions; and (B) any related user manuals. (4) Owner The term “owner” shall, with respect to any software, include the developer of the software. (5) Related person A person shall be treated as related to another person if such persons are related persons under section 267 or 707(b). (6) Tax-related computer software source code

“computer software source code” applies in that section

The term “computer software source code” means— (A) the code written by a programmer using a programming language which is comprehensible to appropriately trained persons and is not capable of directly being used to give instructions to a computer; (B) related programmers’ notes, design documents, memoranda, and similar documentation; and (C) related customer communications. (3) Computer software executable code

“software” applies in that section

The term “software” includes computer software source code and computer software executable code. (2) Computer software source code

“tax-related computer software source code” applies in that section

The term “tax-related computer software source code” means the computer source code for any computer software program intended for accounting, tax return preparation or compliance, or tax planning.

“proceeds” applies in that section

the term “proceeds” includes— (1) penalties, interest, additions to tax, and additional amounts provided under the internal revenue laws, and (2) any proceeds arising from laws for which the Internal Revenue Service is authorized to administer, enforce, or investigate, including— (A) criminal fines and civil forfeitures, and (B) violations of reporting requirements.

“direct cost of processing operations” applies in that section

the term “direct cost of processing operations” has the same meaning as when used in section 213 of the Caribbean Basin Economic Recovery Act. (e) Shipments of rum to the United States (1) Excise taxes on rum covered into treasuries of Puerto Rico and Virgin Islands All taxes collected under section 5001(a)(1) on rum imported into the United States (less the estimated amount necessary for payment of refunds and drawbacks) shall be covered into the treasuries of Puerto Rico and the Virgin Islands.

“Federal excise tax subsidy” applies in that section

the term “Federal excise tax subsidy” means any subsidy— (i) of a kind different from, or (ii) in an amount per value or volume of production greater than, the subsidy which Puerto Rico or the Virgin Islands offers generally to industries producing articles not subject to Federal excise taxes. (3) Direct costs of processing operations For purposes of this subsection,

“rum” applies in that section

the term “rum” means any article classified under subheading 2208.40.00 of the Harmonized Tariff Schedule of the United States ( 19 U.S.C. 1202 ). (4) Coordination with subsections (a) and (b) Paragraph (1) shall not apply with respect to any rum subject to tax under subsection (a) or (b).

“specified possession” applies in that section

The term “specified possession” means Guam, American Samoa, the Northern Mariana Islands, and the Virgin Islands. (c) Transfers The transfers of funds between the United States and any specified possession required by this section shall be made not less frequently than annually.

“alternative energy facility” applies throughout this title

the term “alternative energy facility” means a facility for producing electrical or thermal energy if the primary energy source for the facility is not oil, natural gas, coal, or nuclear power. (E) Water treatment works facility For purposes of subparagraph (A),

“applicable critical mineral” applies in that section

The term “applicable critical mineral” has the same meaning given such term under section 45X(c)(6). (ii) Covered nation

“Attorney General” applies throughout this title

The term “Attorney General” means the Attorney General of the United States. (23) Taxable year

“cogeneration facility” applies throughout this title

the term “cogeneration facility” means a facility which uses the same energy source for the sequential generation of electrical or mechanical power in combination with steam, heat, or other forms of useful energy. (D) Alternative energy facility For purposes of subparagraph (A),

“Commissioner” applies throughout this title

The term “Commissioner” means the Commissioner of Internal Revenue. (14) Taxpayer