6336 Code and Regulations

Internal Revenue Code §6336 - SALE OF PERISHABLE GOODS

If the Secretary determines that any property seized is liable to perish or become greatly reduced in price or value by keeping, or that such property cannot be kept without great expense, he shall appraise the value of such property and --

6336(1) RETURN TO OWNER. --If the owner of the property can be readily found, the Secretary shall give him notice of such determination of the appraised value of the property. The property shall be returned to the owner if, within such time as may be specified in the notice, the owner --

6336(1)(A) Pays to the Secretary an amount equal to the appraised value, or

6336(1)(B) Gives bond in such form, with such sureties, and in such amount as the Secretary shall prescribe, to pay the appraised amount at such time as the Secretary determines to be appropriate in the circumstances.

6336(2) IMMEDIATE SALE . --If the owner does not pay such amount or furnish such bond in accordance with this section, the Secretary shall as soon as practicable make public sale of the property in accordance with such regulations as may be prescribed by the Secretary.

.01 Amended by P.L. 94-455 (Deadwood Act).

§301.6336-1., Sale of perishable goods

(a) Appraisal of certain seized property. --If the district director determines that any property seized by levy is liable to perish or become greatly reduced in price or value by keeping, or that such property cannot be kept without great expense, he shall appraise the value of such property and return it to the owner if the owner complies with the conditions prescribed in paragraph (b) of this section or, if the owner does not comply with such conditions, dispose of the property in accordance with paragraph (c) of this section.

(b) Return to owner. --If the owner of the property can be readily found, the district director shall give him written notice of his determination of the appraised value of the property. However, if the district director determines that the circumstances require immediate action, he may give the owner an oral notice of his determination of the appraised value of the property, which notice shall be confirmed in writing prior to sale. The property shall be returned to the owner if, within the time specified in the notice, the owner --

(1) Pays to the district director an amount equal to the appraised value, or

(2) Gives an acceptable bond as prescribed by section 7101 and the regulations thereunder. Such bond shall be in an amount not less than the appraised value of the property and shall be conditioned upon the payment of such amount at such time as the district director determines to be appropriate in the circumstances.

(c) Immediate sale. --If the owner does not pay the amount of the appraised value of the seized property within the time specified in the notice, or furnish bond as provided in paragraph (b) within such time, the district director shall as soon as practicable make public sale of the property in accordance with the following terms and conditions --

(1) Notice of sale. --If the owner can readily be found, a notice shall be given to him. A notice of sale also shall be posted in two public places in the county in which the property is to be sold. The notice shall specify the time and place of sale, the property to be sold, and the manner and conditions of sale. The district director may give such other notice and in such other manner as he deems advisable under the circumstances.

(2) Sale . --The property shall be sold at public auction to the highest bidder.

(3) Terms. --The purchase price shall be paid in full upon acceptance of the highest bid. The payment shall be made in cash, or by a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States , or by a United States postal, bank express, or telegraph money order. [Reg. §301.6336-1.]

.01 Historical Comment: Proposed 12/11/54. Adopted 12/31/54 by T.D. 6119.

T.D. 6119., 1955-1 CB 145

SECTION 6201.--ASSESSMENT AUTHORITY
26 CFR 301.6201 -1: Assessment authority. (Also Sections 6301, 6402, 6404; 26 CFR 301.6301 -1, 301.6402 -1, 301.6404 -1.)
TITLE 26--INTERNAL REVENUE.--CHAPTER I, SUBCHAPTER F, PART 301

Regulations under chapters 63, 64, and 65 of the Internal Revenue Code of 1954, relating to assessment, collection, abatements, credits, and refunds.

TREASURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL REVENUE,
Washington 25, D. C.

To Officers and Employees of the Internal Revenue Service and Others Concerned:

On December 11, 19 54, there was published in the Federal Register (19 F. R. 8457) a notice of proposed rule making regarding regulations under chapter 63, relating to assessment, chapter 64 (except section 6316), relating to collection, and chapter 65, relating to abatements, credits, and refunds, of the Internal Revenue Code of 1954. On December 15, 19 54, a correction notice making four changes in the proposed regulations was published in the Federal Register (19 F. R. 8580). After consideration of all relevant matter presented by interested parties regarding the rules proposed, the following regulations are hereby adopted.

Sec.

$BASSESSMENT

                   IN GENERAL


301.6201
           Statutory provisions; assessment authority.


301.6201
-1         Assessment authority.

                   Statutory provisions; establishment by regulations of mode or time


301.6202
           of assessment.


301.6203
           Statutory provisions; method of assessment.


301.6203
-1         Method of assessment.


301.6204
           Statutory provisions; supplemental assessments.


301.6204
-1         Supplemental assessment.

                   Statutory provisions; special rules applicable to certain employment


301.6205
           taxes.


301.6205
-1         Special rules applicable to certain employment taxes.


301.6206
           Statutory provisions; cross references.

$BDEFICIENCY

PROCEDURES


301.6211
           Statutory provisions; definition of a deficiency.


301.6211
-1         Deficiency defined.


301.6212
           Statutory provisions; notice of deficiency.


301.6212
-1         Notice of deficiency.

                   Statutory provisions; restrictions applicable to deficiencies; petition


301.6213
           to Tax Court.


301.6213
-1         Restrictions applicable to deficiencies; petition to Tax Court.


301.6214
           Statutory provisions; determinations by Tax Court.


301.6215
           Statutory provisions; assessment of deficiency found by Tax Court.


301.6215
-1         Assessment of deficiency found by Tax Court.


301.6216
           Statutory provisions; cross references.

$BCOLLECTION

                   GENERAL PROVISIONS


301.6301
           Statutory provisions; collection authority.


301.6301
-1         Collection authority.


301.6302
           Statutory provisions; mode or time of collection.

                   Use of Federal reserve banks and authorized commercial banks in

                   connection with the payment of certain employment and excise


301.6302
-1         taxes.


301.6303
           Statutory provisions; notice and demand for tax.


301.6303
-1         Notice and demand for tax.


301.6304
           Statutory provisions; collection under the Tariff Act.

                   RECEIPT OF PAYMENT


301.6311
           Statutory provisions; payment by check or money order.


301.6311
-1         Payment by check or money order.

                   Statutory provisions; payment by United States notes and certificates


301.6312
           of indebtedness.

                   Treasury certificates of indebtedness, Treasury notes, and Treasury


301.6312
-1         bills acceptable in payment of internal revenue taxes or stamps.

                   Certain Treasury savings notes acceptable in payment of certain


301.6312
-2         internal revenue taxes.


301.6313
           Statutory provisions; fractional parts of a cent.


301.6313
-1         Fractional parts of a cent.


301.6314
           Statutory provisions; receipt for taxes.


301.6314
-1         Receipt for taxes.


301.6315
           Statutory provisions; payments of estimated income tax.


301.6315
-1         Payments of estimated income tax.


301.6316
           Statutory provisions; payment by foreign currency.

                   LIEN FOR TAXES


301.6321
           Statutory provisions; lien for taxes.


301.6321
-1         Lien for taxes.


301.6322
           Statutory provisions; period of lien.

                   Statutory provisions; validity against mortgagees, pledgees, purchasers,


301.6323
           and judgment creditors.

                   Validity of lien against mortgagees, pledgees, purchasers, and judgment


301.6323
-1         creditors.


301.6324
           Statutory provisions; special liens for estate and gift taxes.

                   Special liens for estate and gift taxes; personal liability of transferees


301.6324
-1         and others.


301.6325
           Statutory provisions; release of lien or partial discharge of property.


301.6325
-1         Release of lien or partial discharge of property.


301.6326
           Statutory provisions; cross references.

                   SEIZURE OF PROPERTY FOR COLLECTION OF TAXES


301.6331
           Statutory provisions; levy and distraint.


301.6331
-1         Levy and distraint.


301.6332
           Statutory provisions; surrender of property subject to levy.


301.6332
-1         Surrender of property subject to levy.


301.6333
           Statutory provisions; production of books.


301.6333
-1         Production of books.


301.6334
           Statutory provisions; property exempt from levy.


301.6334
-1         Property exempt from levy.


301.6335
           Statutory provisions; sale of seized property.


301.6335
-1         Sale of seized property.


301.6336
           Statutory provisions; sale of perishable goods.


301.6336
-1         Sale of perishable goods.


301.6337
           Statutory provisions; redemption of property.


301.6337
-1         Redemption of property.


301.6338
           Statutory provisions; certificate of sale; deed of real property.


301.6338
-1         Certificate of sale; deed of real property.

                   Statutory provisions; legal effect of certificate of sale of personal


301.6339
           property and deed of real property.

                   Legal effect of certificate of sale of personal property and deed of


301.6339
-1         real property.


301.6340
           Statutory provisions; records of sale.


301.6340
-1         Records of sale.


301.6341
           Statutory provisions; expense of levy and sale.


301.6341
-1         Expense of levy and sale.


301.6342
           Statutory provisions; application of proceeds of levy.


301.6342
-1         Application of proceeds of levy.


301.6343
           Statutory provisions; authority to release levy.


301.6343
-1         Authority to release levy.


301.6344
           Statutory provisions; cross references.

BAbatements,

Credits and

Refunds

                   PROCEDURE IN GENERAL


301.6401
           Statutory provisions; amounts treated as overpayments.


301.6401
-1         Amounts treated as overpayments.


301.6402
           Statutory provisions; authority to make credits or refunds.


301.6402
-1         Authority to make credits or refunds.


301.6402
-2         Claims for credit or refund.


301.6402
-3         Special rules applicable to income tax.


301.6402
-4         Payments in excess of amounts shown on return.


301.6402
-5         Claim for payment of judgment obtained against district director.

                   Claim for payment of judgment obtained in United States district


301.6402
-6         court against the United States.

                   Claim for payment of judgment obtained in the Court of Claims


301.6402
-7         against the United States.


301.6403
           Statutory provisions; overpayment of installment.


301.6403
-1         Overpayment of installment.


301.6404
           Statutory provisions; abatements.


301.6404
-1         Abatements.


301.6405
           Statutory provisions; reports of refunds and credits.


301.6405
-1         Reports of refunds and credits.


301.6406
           Statutory provisions; prohibition of administrative review of decisions.


301.6407
           Statutory provisions; date of allowance of refund or credit.


301.6407
-1         Date of allowance of refund or credit.

                   RULES OF SPECIAL APPLICATION


301.6411
           Statutory provisions; tentative carryback adjustments.


301.6411
-1         Tentative carryback adjustments.


301.6412
           Statutory provisions; floor stock refunds.


301.6412
-1         Floor stocks refunds.

                   Statutory provisions; special rules applicable to certain employment


301.6413
           taxes.


301.6413
-1         Special rules applicable to certain employment taxes.


301.6414
           Statutory provisions; income tax withheld.


301.6414
-1         Income tax withheld.

                   Statutory provisions; credits or refunds to persons who collected certain


301.6415
           taxes.


301.6415
-1         Credits or refunds to persons who collected certain taxes.


301.6416
           Statutory provisions; certain taxes on sales and services.


301.6416
-1         Certain taxes on sales and services.


301.6417
           Statutory provisions; coconut and palm oil.


301.6417
-1         Coconut and palm oil.


301.6418
           Statutory provisions; sugar.


301.6418
-1         Sugar.


301.6419
           Statutory provisions; excise tax on wagering.


301.6419
-1         Excise tax on wagering.


301.6420
           Statutory provisions; cross references.

                   EFFECTIVE DATE 
AND
 RELATED PROVISIONS


301.7851
           Statutory provisions; applicability of revenue laws.

AUTHORITY: §§ 301.6201 to 301.7851 issued under sec. 7805, 68A Stat. 917; 26 U. S. C. 7805.

ASSESSMENT

IN GENERAL

SEC . 301.6201 . STATUTORY PROVISIONS; ASSESSMENT AUTHORITY.

SEC . 6201. ASSESSMENT AUTHORITY.

(a) Authority of Secretary or delegate. The Secretary or his delegate is authorized and required to make the inquiries, determinations, and assessments of all taxes (including interest, additional amounts, additions to the tax, and assessable penalties) imposed by this title, or accruing under any former internal revenue law, which have not been duly paid by stamp at the time and in the manner provided by law. Such authority shall extend to and include the following:

(1) Taxes shown on return.--The Secretary or his delegate shall assess all taxes determined by the taxpayer or by the Secretary or his delegate as to which returns or lists are made under this title.

(2) Unpaid taxes payable by stamp.

(A) Omitted stamps.--Whenever any article upon which a tax is required to be paid by means of a stamp is sold or removed for sale or use by the manufacturer thereof or whenever any transaction or act upon which a tax is required to be paid by means of a stamp occurs without the use of the proper stamp, it shall be the duty of the Secretary or his delegate, upon such information as he can obtain, to estimate the amount of tax which has been omitted to be paid and to make assessment therefor upon the person or persons the Secretary or his delegate determines to be liable for such tax.

(B) Check or money order not duly paid.--In any case in which a check or money order received under authority of section 6311 as payment for stamps is not duly paid, the unpaid amount may be immediately assessed as if it were a tax imposed by this title, due at the time of such receipt, from the person who tendered such check or money order.

(3) Erroneous income tax prepayment credits.--If on any return or claim for refund of income taxes under subtitle A there is an overstatement of the credit for income tax withheld at the source, or of the amount paid as estimated income tax, the amount so overstated which is allowed against the tax shown on the return or which is allowed as a credit or refund may be assessed by the Secretary or his delegate in the same manner as in the case of a mathematical error appearing upon the return.

(b) Estimated income tax.--No unpaid amount of estimated tax under section 6153 or 6154 shall be assessed.

(c) Compensation of child.--Any income tax under chapter 1 assessed against a child, to the extent attributable to amounts includible in the gross income of the child, and not of the parent, solely by reason of section 73(a), shall, if not paid by the child, for all purposes be considered as having also been properly assessed against the parent.

(d) Deficiency proceedings.--For special rules applicable to deficiencies of income, estate, and gift taxes, see subchapter B.

SEC . 301.6201 -1. ASSESSMENT AUTHORITY--(a) In general.--The District Director is authorized and required to make all inquiries necessary to the determinations and assessments of all taxes imposed by the Internal Revenue Code of 1954 or any prior internal revenue law. He is further authorized and required to make the determinations and the assessments of such taxes. However, certain inquiries and determinations are, by direction of the Commissioner, made by other officials, such as Assistant Regional Commissioners. The term "taxes" includes interest, additional amounts, additions to the taxes, and assessable penalties. The authority of the District Director to make assessments includes the following:

(1) Taxes shown on return.--The District Director shall assess all taxes determined by the taxpayer or by the District Director and disclosed on a return or list.

(2) Unpaid taxes payable by stamp. (i) If without the use of the proper stamp:

(a) Any article upon which a tax is required to be paid by means of a stamp is sold or removed for sale or use by the manufacturer thereof, or

(b) Any transaction or act upon which a tax is required to be paid by means of a stamp occurs:

the District Director, upon such information as he can obtain, must estimate the amount of the tax which has not been paid and must make assessment therefor upon the person the District Director determines to be liable for the tax. However, the District Director may not assess any tax which is payable by stamp unless the taxpayer fails to pay such tax at the time and in the manner provided by law or regulations.

(ii) If a taxpayer gives a check or money order as payment for stamps but the check or money order is not paid upon presentment, then the District Director shall assess the amount of the check or money order against the taxpayer as if it were a tax due at the time the check or money order was received by the District Director.

(3) Erroneous income tax prepayment credits.--If the amount of income tax withheld or the amount of estimated income tax paid is overstated by a taxpayer on a return or on a claim for refund, the amount so overstated which is allowed against the tax shown on the return or which is allowed as a credit or refund shall be assessed by the District Director in the same manner as in the case of a mathematical error on the return. See section 6213(b)(1), relating to exceptions to restrictions on assessment.

(b) Estimated income tax.--The District Director shall not assess any amount of estimated income tax required to be paid under section 6153 or 6154 which is unpaid.

(c) Compensation of child.--Any income tax assessed against a child, to the extent of the amount attributable to income included in the gross income of the child solely by reason of section 73(a) or the corresponding provision of prior law, if not paid by the child, shall, for the purposes of the income tax imposed by chapter 1 (or the corresponding provisions of prior law), be considered as having also been properly assessed against the parent. In any case in which the earnings of the child are included in the gross income of the child solely by reason of section 73(a) or the corresponding provision of prior law, the parent's liability is an amount equal to the amount by which the tax assessed against the child (and not paid by him) has been increased by reason of the inclusion of such earnings in the gross income of the child. Thus, if for the calendar year 1954 the child has income of $1,000 from investments and of $3,000 for services rendered, and the latter amount is includible in the gross income of the child under section 73(a) and the child has no wife or dependents, the tax liability determined under section 3 is $625. If the child had only the investment income of $1,000, his tax liability would be $62. If the tax of $625 is assessed against the child, the difference between $625 and $62, or $563, is the amount of such tax which is considered to have been properly assessed against the parent, if not paid by the child.

SEC . 301.6202 . STATUTORY PROVISIONS; ESTABLISHMENT BY REGULATIONS OF MODE OR TIME OF ASSESSMENT.

SEC . 6202. ESTABLISHMENT BY REGULATIONS OF MODE OR TIME OF ASSESSMENT.

If the mode or time for the assessment of any internal revenue tax (including interest, additional amounts, additions to the tax, and assessable penalties) is not otherwise provided for, the Secretary or his delegate may establish the same by regulations.

SEC . 301.6203 . STATUTORY PROVISIONS; METHOD OF ASSESSMENT.

SEC . 6203. METHOD OF ASSESMENT.

The assessment shall be made by recording the liability of the taxpayer in the office of the Secretary or his delegate in accordance with rules or regulations prescribed by the Secretary or his delegate. Upon request of the taxpayer, the Secretary or his delegate shall furnish the taxpayer a copy of the record of the assessment.

SEC . 301.6203 -1. METHOD OF ASSESSMENT.

The District Director shall appoint one or more assessment officers, and the assessment shall be made by an assessment officer signing the summary record of assessment. The summary record, through supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable period if applicable, and the amount of the assessment. The amount of the assessment shall in the case of tax shown on a return by the taxpayer, be the amount so shown, and in all other cases the amount of the assessment shall be the amount shown on the supporting list or record. The date of the assessment is the date the summary record is signed by an assessment officer. If the taxpayer requests a copy of the record of assessment, the District Director shall furnish the taxpayer a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed.

SEC . 301.6204 . STATUTORY PROVISION; SUPPLEMENTAL ASSESSMENTS.

SEC . 6204. SUPPLEMENTAL ASSESSMENT.

(a) General rule.--The Secretary or his delegate may, at any time within the period prescribed for assessment, make a supplemental assessment whenever it is ascertained that any assessment is imperfect or incomplete in any material respect.

(b) Restrictions on assessment.--For restrictions on assessment of deficiencies in income, estate, and gift taxes, see section 6213.

SEC . 301.6204 -1. SUPPLEMENTAL ASSESSMENT.--If any assessment is incomplete or incorrect in any material respect, the District Director, subject to the restrictions with respect to the assessment of deficiencies in income, estate, and gift taxes, and subject to the applicable period of limitations, may make a supplemental assessment for the purpose of correcting or completing the original assessment.

SEC . 301.6205 . STATUTORY PROVISIONS; SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES.

SEC . 6205. SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES.

(a) Adjustment of tax.

(1) General rule.--If less than the correct amount of tax imposed by section 3101, 3111, 3201, 3221, or 3402 is paid with respect to any payment of wages or compensation, proper adjustments, with respect to both the tax and the amount to be deducted, shall be made, without interest, in such manner and at such times as the Secretary or his delegate may by regulations prescribe.

(2) United States as employer.--For purposes of this subsection, in the case of remuneration received from the United States or a wholly owned instrumentality thereof during any calendar year, each head of a Federal agency or instrumentality who makes a return pursuant to section 3122 and each agent, designated by the head of a Federal agency or instrumentality, who makes a return pursuant to such section shall be deemed a separate employer.

(b) Underpayments.--If less than the correct amount of tax imposed by section 3101, 3111, 3201, 3221, or 3402 is paid or deducted with respect to any payment of wages or compensation and the underpayment cannot be adjusted under subsection (a) of this section, the amount of the underpayment shall be assessed and collected in such manner and at such times (subject to the statute of limitations properly applicable thereto) as the Secretary or his delegate may by regulations prescribe.

SEC . 301.6205 -1. SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES. For regulations under this section, see the Employment Tax Regulations (Pt. 31 of this chapter).

SEC . 301.6206 . STATUTORY PROVISIONS; CROSS REFERENCES.

SEC . 6206. CROSS REFERENCES.

(1) For prohibition of suits to restrain assessment of any tax, see section 7421.

(2) For prohibition of assessment of taxes against insolvent banks, see section 7507.

(3) For assessment where property subject to tax has been sold in a distraint proceeding without the tax having been assessed prior to such sale, see section 6342.

(4) For assessment in case of sale or removal of tobacco, snuff, cigars, and cigarettes without the use of proper stamps, see section 5703(d).

(5) For assessment in case of distilled spirits removed from place where disstilled and not deposited in bonded warehouse, see section 5006(c).

(6) For assessment in case of certain spirits subject to excessive leakage, see section 5006(b).

(7) For assessment of deficiencies in production of distilled spirits, see section 5007(e)(1).

(8) For period of limitation upon assessment, see chapter 66.

(9) For assessment under the provisions of the Tariff Act of 1930 of the taxes imposed by section 4501(b), and subchapters A, B, C, D, and E of chapter 38, see sections 4504 and 4601, respectively.

DEFICIENCY PROCEDURES

SEC . 301.6211 . STATUTORY PROVISIONS; DEFINITION OF A DEFICIENCY.

SEC . 6211. DEFINITION OF A DEFICIENCY.

(a) In general. For purposes of this title in the case of income, estate, and gift taxes, imposed by subtitles A and B, the term "deficiency" means the amount by which the tax imposed by subtitles A or B exceeds the excess of:

(1) The sum of:

(A) The amount shown as the tax by the taxpayer upon his return, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus

(B) The amounts previously assessed (or collected without assessment) as a deficiency, over:

(2) the amount of rebates, as defined in subsection (b)(2), made.

(b) Rules for application of subsection (a). For purposes of this section:

(1) The tax imposed by chapter 1 and the tax shown on the return shall both be determined without regard to payments on account of estimated tax, without regard to the credit under section 31, and without regard to so much of the credit under section 32 as exceeds 2 percent of the interest on obligations described in section 1451.

(2) The term "rebate" means so much of an abatement, credit, refund, or other repayment, as was made on the ground that the tax imposed by subtitles A or B was less than the excess of the amount specified in subsection (a)(1) over the rebates previously made.

(3) The computation by the Secretary or his delegate, pursuant to section 6014, of the tax imposed by chapter 1 shall be considered as having been made by the taxpayer and the tax so computed considered as shown by the taxpayer upon his return.

SEC . 301.6211 -1 DEFICIENCY DEFINED.--(a) In the case of the income tax imposed by subtitle A, the estate tax imposed by chapter 11, or the gift tax imposed by chapter 12, the term "deficiency" means the excess of the tax (income, estate, or gift tax, as the case may be) over the sum of the amount shown as such tax by the taxpayer upon his return and the amounts previously assessed (or collected without assessment) as a deficiency; but such sum shall first be reduced by the amount of rebates made. If no return is made, or if the return (except a return of income tax on Form 1040A pursuant to section 6014) does not show any tax, for the purpose of the definition "the amount shown as the tax by the taxpayer upon his return" shall be considered as zero. Accordingly, in any such case, if no deficiencies with respect to the tax have been assessed, or collected without assessment, and no rebates with respect to the tax have been made, the deficiency is the amount of the tax imposed by subtitle A, chapter 11, or chapter 12. Additional tax shown on an "amended return," so-called, filed after the due date of the return, is a deficiency within the meaning of the Internal Revenue Code.

(b) For purposes of the definition, the income tax imposed by subtitle A and the income tax shown on the return shall both be determined without regard to the credit provided in section 31 for income tax withheld at the source and without regard to so much of the credit provided in section 32 for income taxes withheld at the source as exceeds 2 percent of the interest on tax-free covenant bonds described in section 1451. Payments on account of estimated income tax, like other payments of tax by the taxpayer, shall likewise be disregarded in the determination of a deficiency.

(c) The computation by the District Director, pursuant to section 6014(a), of the income tax imposed by subtitle A shall be considered as having been made by the taxpayer and the tax so computed shall be considered as the tax shown by the taxpayer upon his return.

(d) If so much of the credit claimed on the return for income taxes withheld at the source as exceeds 2 percent of the interest on tax-free covenant bonds is greater than the amount of such credit allowable, the unpaid portion of the tax attributable to such difference will be collected not as a deficiency but as an underpayment of the tax shown on the return.

(e) This section may be illustrated by the following examples:

Example (1). The amount of income tax shown by the taxpayer upon his return for the calendar year 1954 was $1,600. The taxpayer had no amounts previously assessed (or collected without assessment) as a deficiency. He claimed a credit in the amount of $2,050 for tax withheld at source on wages under section 3402 and a refund of $450 (not a rebate under sec. 6211) was made to him as an overpayment of tax for the taxable year. It is later determined that the correct tax for the taxable year is $1,850.

A deficiency of $250 is determined as follows:

Tax imposed by subtitle A ---                                                              $1,850

Tax shown on return ---                                                     $1,600

Tax previously assessed (or collected without assessment) as a

deficiency ---                                                                None

Total ---                                                                    1,600

Amount of rebates made ---                                                    None

Balance ---                                                                                 1,600

Deficiency ---                                                                                250

Example (2). The taxpayer made a return for the calendar year 1954 showing a tax of $1,250 before any credits for tax withheld at the source. He claimed a credit in the amount of $800 for tax withheld at source on wages under section 3402 and $60 for tax paid at source under section 1451 upon interest on bonds containing a tax-free covenant. The taxpayer had no amounts previously assessed (or collected without assessment) as a deficiency. The District Director determines that the 2 percent tax paid at the source on tax-free covenant bonds is $40 instead of $60 as claimed by the taxpayer and that the tax imposed by subtitle A is $1,360 (total tax $1,400 less $40 paid at source on tax-free covenant bonds). A deficiency in the amount of $170 is determined as follows:

Tax imposed by subtitle A ($1,400 minus $40) ---                                           $1,360

Tax shown on return ($1,250 minus $60) ---                                  $1,190

Tax previously assessed (or collected without assessment) as a

deficiency ---                                                                None

Total ---                                                                    1,190

Amount of rebates made ---                                                    None

Balance ---                                                                                 1,190

Deficiency ---                                                                                170

(f) As used in section 6211, the term "rebate" means so much of an abatement, credit, refund, or other repayment as is made on the ground that the tax imposed by subtitle A or B is less than the excess of (1) the amount shown as the tax by the taxpayer upon his return increased by the amount previously assessed (or collected without assessment) as a deficiency over (2) the amount of rebates previously made. For example, assume that the amount of income tax shown by the taxpayer upon his return for the taxable year is $600 and the amount claimed as a credit under section 31 for income tax withheld at the source is $900. If the District Director determines that the tax imposed by subtitle A is $600 and makes a refund of $300, no part of such refund constitutes a "rebate" since the refund is not made on the ground that the tax imposed by subtitle A is less than the tax shown on the return. If, however, the District Director determines that the tax imposed by subtitle A is $500 and refunds $400, the amount of $100 of such refund would contsitute a rebate since it is made on the ground that the tax imposed by subtitle A ($500) is less than the tax shown on the return ($600). The amount of such rebate ($100) would be taken into account in arriving at the amount of any deficiency subsequently determined.

SEC . 301.6212 . STATUTORY PROVISIONS; NOTICE OF DEFICIENCY.

SEC . 6212. NOTICE OF DEFICIENCY.

(a) In general.--If the Secretary or his delegate determines that there is a deficiency in respect of any tax imposed by subtitles A or B, he is authorized to send notice of such deficiency to the taxpayer by registered mail.

(b) Address for notice of deficiency.

(1) Income and gift taxes.--In the absence of notice to the Secretary or his delegate under section 6903 of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by chapter 1 or 12, if mailed to the taxpayer at his last known address, shall be sufficient for purposes of such chapter and this chapter even if such taxpayer is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence.

(2) Joint income tax return. In the case of a joint income tax return filed by husband and wife, such notice of deficiency may be a single joint notice, except that if the Secretary or his delegate has been notified by either spouse that separate residences have been established, then, in lieu of the single joint notice, a duplicate original of the joint notice shall be sent by registered mail to each spouse at his last known address.

(3) Estate tax.--In the absence of notice to the Secretary or his delegate under section 6903 of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by chapter 11, if addressed in the name of the decedent or other person subject to liability and mailed to his last known address, shall be sufficient for purposes of chapter 11 and of this chapter.

(1) General rule.--If the Secretary or his delegate has mailed to the taxpayer a notice of deficiency as provided in subsection (a), and the taxpayer files a petition with the Tax Court within the time prescribed in section 6213(a), the Secretary or his delegate shall have no right to determine any additional deficiency of income tax for the same taxable year, of gift tax for the same calendar year, or of estate tax in respect