Internal Revenue Code - §6338 - CERTIFICATE OF SALE ; DEED OF REAL PROPERTY

 6338(a) CERTIFICATE OF SALE . --In the case of property sold as provided in section 6335, the Secretary shall give to the purchaser a certificate of sale upon payment in full of the purchase price. In the case of real property, such certificate shall set forth the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid therefor.

6338(b) DEED TO REAL PROPERTY. --In the case of any real property sold as provided in section 6335 and not redeemed in the manner and within the time provided in section 6337, the Secretary shall execute (in accordance with the laws of the State in which such real property is situated pertaining to sales of real property under execution) to the purchaser of such real property at such sale, upon his surrender of the certificate of sale, a deed of the real property so purchased by him, reciting the facts set forth in the certificate.

6338(c) REAL PROPERTY PURCHASED BY UNITED STATES. --If real property is declared purchased by the United States at a sale pursuant to section 6335, the Secretary shall at the proper time execute a deed therefor, and without delay cause such deed to be duly recorded in the proper registry of deeds.

.01 Amended by P.L. 94-455 (Deadwood Act), P.L. 89-719 and P.L. 85-866.  

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

(a) Certificate of sale. --In the case of property sold as provided in section 6335 (relating to sale of seized property), the district director shall give to the purchaser a certificate of sale upon payment in full of the purchase price. A certificate of sale of real property shall set forth the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid therefor.

(b) Deed to real property. --In the case of any real property sold as provided in section 6335 and not redeemed in the manner and within the time prescribed in section 6337, the district director shall execute (in accordance with the laws of the State in which the real property is situated pertaining to sales of real property under execution) to the purchaser of such real property at the sale or his assigns, upon surrender of the certificate of sale, a deed of the real property so purchased, reciting the facts set forth in the certificate.

(c) Deed to real property purchased by the United States . --If real property is declared purchased by the United States at a sale pursuant to section 6335, the district director shall at the proper time execute a deed therefor and shall, without delay, cause the deed to be duly recorded in the proper registry of deeds. [Reg. §301.6338-1.]

.01 Historical Comment: Proposed 12/11/54. Adopted 12/31/54 by T.D. 6119. Amended 11/10/59 by T.D. 6425 and 4/12/72 by T.D. 7180.

T.D. 6425 ¹, 1959-2 CB 384


SECTION 6203.--METHOD OF ASSESSMENT
26 CFR 301.6203 -1: Method of assessment. (Also Sections 6325, 6402, 6501, 6601, 6611, 6652, 6871; 301.6325 , 301.6402 -3, 301.6501 -1(a), 301.6601 , 301.6611 , 301.6652 , 301.6871 (a).)
TITLE 26--INTERNAL REVENUE, 1954.--CHAPTER I, SUBCHAPTER F, PART 301.--PROCEDURE AND ADMINISTRATION



Miscellaneous amendments to the Regulations on Procedure and Administration.

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

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

In order to conform the Regulations on Procedure and Administration (26 CFR Part 301) to (1) the amendments made to the Internal Revenue Code of 1954 by the Act of February 11, 19 58 (Public Law 85-323, 72 Stat. 8) [C.B. 1958-1, 630], The Tax Rate Extension Act of 1958 (72 Stat. 259) [P.L. 85-475, C.B. 1958-3, 73], the Social Security Amendments of 1958 (72 Stat. 1013) [P.L. 85-840, C.B. 1958-3, 85], the Technical Amendments Act of 1958 (72 Stat. 1606) [P.L. 85-866, C.B. 1958-3, 254], the Excise Tax Technical Changes Act of 1958 (72 Stat. 1275) [P.L. 85-859, C.B. 1958-3, 92], the Life Insurance Company Income Tax Act of 1959 (73 Stat. 112) [P.L. 86-69, page 654, this Bulletin], and the Tax Rate Extension Act of 1959 (73 Stat. 157) [P.L. 86-75, page 679, this Bulletin], and (2) 38 U.S.C. 562(c), as enacted into positive law by the Act of September 2, 19 58 (Public Law 85-857, 72 Stat. 1105), and 10 U.S.C. 1440, as enacted into positive law by the Act of August 10, 19 56 (Public Law 1028, 84th Cong., 70A Stat. 111), and in order to make certain other changes in such regulations, the regulations are amended as follows:

PARAGRAPH 1. Section 301.6203 -1 is amended to read as follows:

§301.6203-1 METHOD OF ASSESSMENT.--The district director shall appoint one or more assessment officers, including assessment officers in a Service Center servicing his district, 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 or the director of a Service Center 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.

PAR . 2. Section 301.6207 , as amended by Treasury Decision 6292, approved April 15, 19 58 [C.B. 1958-1, 476], is further amended to read as follows:

§301.6207 STATUTORY PROVISIONS; CROSS REFERENCES.

SEC . 6207. CROSS REFERENCES.

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(4) For assessment with respect to taxes required to be paid by chapter 52, see section 5703.

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

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

[Sec. 6206 as renumbered 6207 by sec. 4(b)(1), Act of Apr. 2, 19 56 (Pub. Law 466, 84th Cong., 70 Stat. 90) [C.B. 1956-1, 870] and as amended by sec. 204(2), (3), Excise Tax Technical Changes Act 1958 (72 Stat. 1428 [P.L. 85-859, C.B. 1958-3, 92]]

PAR . 3. Section 301.6212 is amended to read as follows:

§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 certified mail or 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 subtitle A or chapter 12, if mailed to the taxpayer at his last known address, shall be sufficient for purposes of subtitle A, chapter 12, 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 certified mail or registered mail to each spouse at his last known address.

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[Sec. 6212 as amended by secs. 76, 89(b), Technical Amendments Act 1958 (72 Stat. 1661, 1665)]

PAR . 4. Section 301.6212 -1 is amended to read as follows:

§301.6212-1 NOTICE OF DEFICIENCY.--(a) General rule.--If a district director (or an assistant regional commissioner, appellate) determines that there is a deficiency in respect of income, estate, or gift tax imposed by subtitle A or B, he is authorized to notify the taxpayer of the deficiency by registered mail prior to September 3, 19 58, and by either registered or certified mail on and after September 3, 19 58.

(b) Address for notice of deficiency. * * *

(2) Joint income tax returns.--If a joint income tax return has been filed by husband and wife, the district director (or assistant regional commissioner, appellate) may, unless the district director for the district in which such joint return was filed has been notified by either spouse that a separate residence has been established, send either a joint or separate notice of deficiency to the taxpayers at their last known address. If, however, the proper district director has been so notified, a separate notice of deficiency, that is, a duplicate original of the joint notice, must be sent by registered mail prior to September 3, 19 58, and by either registered or certified mail on and after September 3, 19 58, to each spouse at his or her last known address. The notice of separate residences should be addressed to the district director for the district in which the joint return was filed.

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PAR . 5. Section 301.6213 -1 is amended to read as follows:

§301.6213-1 RESTRICTIONS APPLICABLE TO DEFICIENCIES: PETITION TO TAX COURT.--(a) Time for filing petition and restrictions on assessment.--(1) Time for filing petition.--Within 90 days after notice of the deficiency is mailed (or within 150 days after mailing in the case of such notice addressed to a person outside the States of the Union and the District of Columbia), as provided in section 6212, a petition may be filed with the Tax Court of the United States for a redetermination of the deficiency. In determining such 90-day or 150-day period, Saturday, Sunday, or a legal holiday in the District of Columbia is not counted as the 90th or 150th day. In determining the time for filing a petition with the Tax Court in the case of a notice of deficiency mailed to a resident of Alaska prior to 12:01 p.m. (E.S.T.), January 3, 19 59, and in the case of a notice of deficiency mailed to a resident of Hawaii prior to 4:00 p.m. (E.D.S.T.), August 21, 19 59, the term "States of the Union" does not include Alaska or Hawaii, respectively, and the 150-day period applies. In determining the time within which a petition to the Tax Court may be filed in the case of a notice of deficiency mailed to a resident of Alaska after 12:01 p.m. E.S.T.), January 3, 19 59, and in the case of a notice of deficiency mailed to a resident of Hawaii after 4:00 p.m. (E.D.S.T.), August 21, 19 59, the term "States of the Union" includes Alaska and Hawaii, respectively, and the 90-day period applies.

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(c) Failure to file petition.--If no petitioner is filed with the Tax Court within the period prescribed in section 6213(a), the district director shall assess the amount determined as the deficiency and of which the taxpayer was notified by registered or certified mail and the taxpayer shall pay the same upon notice and demand therefor. In such case the district director will not be precluded from determining a further deficiency and notifying the taxpayer thereof by registered or certified mail. If a petition is filed with the Tax Court the taxpayer should notify the district director who issued the notice of deficiency that the petition has been filed in order to prevent an assessment of the amount determined to be the deficiency.

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PAR . 6. Section 301.6325 is amended to read as follows:

§301.6325 STATUTORY PROVISIONS; RELEASE OF LIEN OR PARTIAL DISCHARGE OF PROPERTY.

SEC . 6325. RELEASE OF LIEN OR PARTIAL DISCHARGE OF PROPERTY.

(a) RELEASE OF LIEN. * * *

(1) LIABILITY SATISFIED OR UNENFORCEABLE.--The Secretary or his delegate finds that the liability for the amount assessed, together with all interest in respect thereof, has been fully satisfied or has become legally unenforceable; or

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(c) ESTATE OR GIFT TAX.--Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of discharge of any or all of the property subject to any lien imposed by section 6324 if the Secretary or his delegate finds that the liability secured by such lien has been fully satisfied or provided for.

(d) EFFECT OF CERTIFICATE OF RELEASE OR DISCHARGE.--A certificate of release or of discharge issued under this section shall be held conclusive that the lien upon the property covered by the certificate is extinguished.

(e) CROSS REFERENCES.--

(1) For single bond complying with the requirements of both subsection (a)(2) and section 6165, see section 7102.

(2) For other provisions relating to bonds, see generally chapter 73.

(3) For provisions relating to suits to enforce lien, see section 7403.

(4) For provisions relating to suits to clear title to realty, see section 7424.

[Sec. 6325 as amended by sec. 77, Technical Amendments Act 1958 (72 Stat. 1662) [P.L. 85-866, C.B. 1958-3, 254]]

PAR . 7. Section 301.6325 -1 is amended to read as follows:

§301.6325-1 RELEASE OF LIEN OR PARTIAL DISCHARGE OF PROPERTY.--(a) Release of lien.--(1) Liability satisfied or unenforceable.--The district director to whom is charged an assessment in respect of any internal revenue tax shall issue a certificate of release of any lien imposed with respect to such tax, whenever he finds that the liability for the amount assessed (together with all interest in respect thereof) has been satisfied or has become unenforceable as a matter of law (and not merely uncollectible or unenforceable as a matter of fact). Tax liabilities frequently are unenforceable in fact for the time being, due to the temporary nonpossession by the taxpayer of discoverable property or property rights. In all cases the liability for the payment of the tax continues until satisfaction of the tax in full or until the expiration of the statutory period for collection, including such extension of the period for collection as may be agreed upon in writing by the taxpayer and the district director. The form to be used by the district director is Form 669, "Certificate of Release of Federal Tax Lien".

(2) Bond accepted.--The district director may, in his discretion, issue a certificate of release of any tax lien if he is furnished and accepts a bond that is conditioned upon the payment of the amount assessed (together with all interest in respect thereof), within the time agreed upon in the bond, but not later than 6 months before the expiration of the statutory period for collection, including any period for collection agreed upon in writing by the district director and the taxpayer. For provisions relating to bonds, see sections 7101 and 7102 and the regulations thereunder.

(b) Discharge of specific property from the lien.--(1) Property double the amount of the liability.--(i) The district director may, in his discretion, issue a certificate of discharge of any part of the property subject to any tax lien if he determines that the fair market value of that part of the property remaining subject to the lien is at least double the sum of the amount of the unsatisfied liability secured by such lien and of the amount of all other liens upon such property which have priority to such lien. In general, fair market value is that amount which one ready and willing but not compelled to buy would pay to another ready and willing but not compelled to sell the property. The form to be used by the district director is Form 669-A, "Certificate of Discharge of Property from Federal Tax Lien". For information required to be submitted in an application for a certificate of discharge, see subparagraph (4) of this paragraph.

(ii) The following example illustrates a case in which a certificate of discharge may not be given under this subparagraph:

Example: The Federal tax liability secured by a lien is $1,000. The fair market value of all property which after the discharge will continue to be subject to the Federal tax lien is $10,000. There is a prior mortgage on the property of $5,000, including interest, and the property is subject to a prior lien of $100 for real estate taxes. Accordingly, the taxpayer's equity in the property over and above the amount of the mortgage and real estate taxes is $4,900, or nearly five times the amount required to pay the assessed tax on which the Federal tax lien is based. Nevertheless, a discharge under this subparagraph is not permissible. In the illustration, the sum of the amount of the Federal tax liability ($1,000) and of the amount of the prior mortgage and the lien for real estate taxes ($5,000$100=$5,100) is $6,100. Double this sum is $12,200, but the fair market value of the remaining property is only $10,000. Hence, a discharge of the property is not permissible under this subparagraph, since the Code requires that the fair market value of the remaining property be at least double the sum of two amounts, one amount being the outstanding Federal tax liability and the other amount being all prior liens upon such property. In order that the discharge may be issued, it would be necessary that the remaining property be worth not less than $12,200.

(2) Part payment.--The district director may, in his discretion, issue a certificate of discharge of any part of the property subject to the lien if there is paid over to him in part satisfaction of the liability secured by the lien an amount determined by him to be not less than the value of the interest of the United States in the property to be so discharged. In determining the amount to be paid, the district director will take into consideration all the facts and circumstances of the case, including the expenses to which the Government has been put in the matter. In no case shall the amount to be paid be less than the value of the interest of the United States in the property with respect to which the certificate of discharge is to be issued, as such value has been determined by the district director in the light of the fair market value of the property and the amount of all liens and encumbrances thereon having priority over the Federal tax lien. The form to be used by the district director is Form 669-B, "Certificate of Discharge of Property from Federal Tax Lien". For information required to be submitted in an application for a certificate of discharge, see subparagraph (4) of this paragraph.

(3) Interest of the United States valueless.--The district director may, in his discretion, issue a certificate of discharge of any part of the property subject to the lien if he determines that the interest of the United States in the property to be so discharged has no value. The form to be used by the district director is Form 669-C, "Certificate of Discharge of Property from Federal Tax Lien." For information required to be submitted in an application for a certificate of discharge, see subparagraph (4) of this paragraph.

(4) Application for certificate of discharge.--Any person desiring a certificate of discharge or property from a Federal tax lien shall submit to the district director to whom the assessment is charged a written application in triplicate, under penalties of perjury, requesting that the certificate be issued. The application shall contain the following information:

(i) A clear description of the property with respect to which the discharge is desired and, where applicable, of the property remaining subject to the lien;

(ii) The reason the discharge is sought;

(iii) A description of the Federal tax lien in respect of which the certificate of discharge is sought, including the amount, nature of the tax, the dates of assessment, and, if applicable, an appropriate reference to the registry and the page and volume of the book in which the notice of Federal tax lien is filed, indexed, or recorded, and the date of the filing of the notice;

(iv) A statement in numbered paragraphs of all facts material to the application, including the amount, character, and dates (both of execution and of record) of all encumbrances of record prior to the Federal lien, with an appropriate reference to the registry and the page and volume of the book in which each such encumbrance is recorded;

(v) The amounts, character, and dates of execution of any unrecorded encumbrances believed to be prior to the Federal tax lien, including information as to how and when such encumbrances arose;

(vi) In support of the application, the applicant must furnish proof sufficient to establish the fair market value of the property with respect to which the discharge is sought, and where applicable, proof sufficient to establish the fair market value of the property which will remain subject to the lien; and

(vii) Any other information which in the opinion of the applicant might have a bearing upon the determination to be made.

Applications submitted under subparagraph (1) or (3) of this paragraph do not require the submission of any sum of money for the discharge of the property from a tax lien. Since the amount to be paid for the issuance, under subparagraph (2) of this paragraph, of a certificate of discharge of property from a Federal tax lien is a matter for the determination of the district director after consideration of the facts and law involved, no sum of money or check should be submitted with the application. The district director shall cause a thorough investigation to be made as to the proof and accuracy of all material statements made in the application. Upon completion of such investigation the district director will make his determination and advise the applicant of the decision reached.

(c) Estate or gift tax liability fully satisfied or provided for.--(1) Certificate of discharge.--If the district director determines that the tax liability for estate or gift tax has been fully satisfied, he may issue a certificate of discharge of any or all property from the lien imposed thereon. If the district director determines that the tax liability for estate or gift tax has been adequately provided for, he may issue a certificate discharging particular items of property from the lien. The issuance of such a certificate is a matter resting within the discretion of the district director, and a certificate will be issued only in case there is actual need therefor. The primary purpose of such discharge is not to evidence payment or satisfaction of the tax, but to permit the transfer of property free from the lien in case it is necessary to clear title. The tax will be considered fully satisfied only when investigation has been completed and payment of the tax, including any deficiency determined, has been made.

(2) Application for certificate of discharge.--An application for a certificate of discharge of property from the lien for estate or gift tax should be filed with the district director charged with the assessment in respect of the tax. It should be made in writing under penalties of perjury and should explain the circumstances that require the discharge, and should fully describe the particular items for which the discharge is desired. In the case of an estate tax lien, the application should show the applicant's relationship to the estate, such as executor, heir, devisee, legatee, beneficiary, transferee, or purchaser. If the estate or gift tax return has not been filed, a statement under penalties of perjury may be required showing (i) the value of the property to be discharged, (ii) the basis for such valuation, (iii) in the case of the estate tax, the approximate value of the gross estate and the approximate value of the total real property included in the gross estate, (iv) in the case of the gift tax, the total amount of gifts made during the calendar year and the prior calendar years subsequent to the enactment of the Revenue Act of 1932 and the approximate value of all real estate subject to the gift tax lien, and (v) if the property is to be sold or otherwise transferred, the name and address of the purchaser or transferee and the consideration, if any, paid or to be paid by him.

(d) Effect of certificate of release or discharge of specific property.--A certificate of release of lien or a certificate discharging specific property from the lien issued under section 6325 shall be conclusive that the lien upon the property covered by the certificate is extinguished.

PAR . 8. Section 301.6334 , as amended by Treasury Decision 6292, approved April 15, 19 58 [C.B. 1958-1, 476], is further amended to read as follows:

§301.6334 STATUTORY PROVISIONS; PROPERTY EXEMPT FROM LEVY.

SEC . 6334. PROPERTY EXEMPT FROM LEVY.

(a) ENUMERATION. * * *

(4) UNEMPLOYMENT BENEFITS.--Any amount payable to an individual with respect to his enemployment (including any portion thereof payable with respect to dependents) under an unemployment compensation law of the United States, of any State or Territory, or of the District of Columbia or of the Commonwealth of Puerto Rico.

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[Sec. 6334 as amended by sec. 406, Social Security Amendments 1958 (72 Stat. 1047)]

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Sec. 562 [Title 38, United States Code]. Special provisions relating to pension. * * *

(c) Special pension shall not be subject to any attachment, execution, levy, tax lien, or detention under any process whatever.

[38 U.S.C. 562(c), enacted into positive law by Act of Sept. 2, 19 58 (Pub. Law 85-857, 72 Stat. 1105)]

Sec. 1440 [Title 10, United States Code]. Annuities not subject to legal process.--No annuity payable under this chapter (Chapter 73) is assignable or subject to execution levy, attachment, garnishment, or other legal process.

[10 U.S.C. 1440, enacted into positive law by Act of Aug. 10, 19 56 (Pub. Law 1028, 84th Cong., 70A Stat. 111)]

PAR . 9. Section 301.6334 -1, as amended by Treasury Decision 6292, approved April 15, 19 58, is further amended to read as follows:

§301.6334-1 PROPERTY EXEMPT FROM LEVY.--(1) Enumeration. * * *

(4) Unemployment benefits.--Any amount payable to an individual with respect to his unemployment (including any portion thereof payable with respect to dependents) under an unemployment compensation law of the United States, of any State or Territory, or of the District of Columbia or of the Commonwealth of Puerto Rico.

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(c) Other property.--Annuity or pension payments under the Railroad Retirement Act, benefits under the Railroad Unemployment Insurance Act, special pensions under 38 U.S.C. 562, and annuities payable under Chapter 73 of Title 10 of the United States Code are exempt from levy. No other property or rights to property are exempt from levy except the property specifically exempted by section 6334(a). No provision of a State law may exempt property or rights to property from levy for the collection of any Federal tax. Thus, property exempt from execution under State personal or homestead exemption laws is, nevertheless, subject to levy by the United States for collection of its taxes.

PAR . 10. Section 301.6338 is amended to read as follows:

§301.6338 STATUTORY PROVISIONS; CERTIFICATE OF SALE ; DEED OF REAL PROPERTY.

SEC . 6338. CERTIFICATE OF SALE ; DEED OF REAL PROPERTY. * * *

(c) REAL PROPERTY PURCHASED BY UNITED STATES.--If real property is declared purchased by the United States at a sale pursuant to section 6335, the Secretary or his delegate shall at the proper time execute a deed therefor after its preparation and the endorsement of approval as to its form by the United States attorney for the district in which the property is situated, and the Secretary or his delegate shall, without delay, cause the deed to be duly recorded in the proper registry of deeds.

[Sec. 6338 as amended by sec. 78, Technical Amendments Act 1958 (72 Stat. 1662]

PAR . 11. Section 301.6338 -1 is amended to read as follows:

§301.6338-1 CERTIFICATE OF SALE ; DEED OF REAL PROPERTY.

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(c) Deed to real property purchased by the United States.--If real property is declared purchased by the United States at a sale pursuant to section 6335, the district director shall at the proper time execute a deed therefor after its preparation and the endorsement of approval as to the form by the United States attorney for the district in which the property is situated, and the district director shall, without delay, cause the deed to be duly recorded in the proper registry of deeds.

PAR . 12. Section 301.6339 is amended to read as follows:

§301.6339 STATUTORY PROVISIONS; LEGAL EFFECT OF CERTIFICATE OF SALE OF PERSONAL PROPERTY AND DEED OF REAL PROPERTY.

SEC . 6339. LEGAL EFFECT OF CERTIFICATE OF SALE OF PERSONAL PROPERTY AND DEED OF REAL PROPERTY. * * *

(b) DEED OF REAL PROPERTY. * * *

(2) DEED AS CONVEYANCE OF TITLE.--If the proceedings of the Secretary or his delegate as set forth have been substantially in accordance with the provisions of law, such deed shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to real property thus sold at the lien of the United States attached thereto.

[Sec. 6339 as amended by sec. 79, Technical Amendments Act 1958 (72 Stat. 1662)]

PAR . 13. Section 31.6343-1 is amended to read as follows:

§301.6343-1 AUTHORITY TO RELEASE LEVY.--(a) Authority.--The district director may release the levy upon all or part of the property or rights to property levied upon as provided in paragraphs (b) and (c) of this section. A levy may be released under paragraph (b) of this section only if the delinquent taxpayer complies with such of the conditions thereunder as the district director may require and if the district director determines that such action will facilitate the collection of the liability. A release pursuant to paragraph (c) is considered to facilitate the collection of the liability. The release under this section shall not operate to prevent any subsequent levy.

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(c) Release where value of interest of United States is insufficient to meet expenses of sale.--The district director may release the levy as authorized under paragraph (a) of this section if he determines that the value of the interest of the United States in the seized property, or in the part of the seized property to be released, is insufficient to cover the expenses of the sale of such property.

PAR . 14. Section 301.6402 -3, as amended by Treasury Decision 6292, approved April 15, 19 58, is further amended to read as follows:

§301.6402-3 SPECIAL RULES APPLICABLE TO INCOME TAX.--(a) In the case of income tax, claims for refund may not only be made on Form 843 but may also be made on any individual, finduciary, or corporation income tax return, or on any amended income tax return.

(b) A properly executed individual, fiduciary, or corporation income tax return shall, at the election of the taxpayer, constitute a claim for refund or credit within the meaning of section 6402 and section 6511 for the amount of the overpayment disclosed by such return. For purposes of section 6511, such claim shall be considered as filed on the date on which such return is considered as filed, except that if the requirements of §301.7502-1, relating to timely mailing treated as timely filing, are met the claim shall be considered to be filed on the date of the postmark stamped on the cover in which the return was mailed. An election to treat the return as a claim for refund or credit shall be evidenced by a statement on the return setting forth the amount determined as an overpayment and advising whether such amount shall be refunded to the taxpayer or shall be applied as a credit against the taxpayer's estimated income tax for the taxable year immediately succeeding the taxable year for which such return is filed. If the taxpayer elects to have all or part of the overpayment shown by his return applied to his estimated income tax for his succeeding taxable year, no interest shall be allowed on such portion of the overpayment credited and such amount shall be applied as a payment on account of the estimated income tax for such year or the installments thereof.

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PAR . 15. Section 301.6412 , as amended by Treasury Decision 6292, approved April 15, 19 58, is further amended to read as follows:

§301.6412 STATUTORY PROVISIONS; FLOOR STOCKS REFUNDS.

SEC . 6412. FLOOR STOCKS REFUNDS.

(a) IN GENERAL.--

(1) PASSENGER AUTOMOBILES, ETC .--Where before July 1, 19 60, any article subject to the tax imposed by section 4061(a)(2) has been sold by the manufacturer, producer, or importer and on such date is held by a dealer and has not been used and is intended for sale, there shall be credited or refunded (without interest) to the manufacturer, producer, or importer an amount equal to the difference between the tax paid by such manufacturer, producer, or importer on his sale of the article and the amount of tax made applicable to such article on and after July 1, 19 60, if claim for such credit or refund is filed with the Secretary or his delegate on or before November 10, 19 60, based upon a request submitted to the manufacturer, producer, or importer before October 1, 19 60, by the dealer who held the article in respect of which the credit or refund is claimed, and, on or before November 10, 19 60, reimbursement has been made to such dealer by such manufacturer, producer, or importer for the tax reduction on such article or written consent has been obtained from such dealer to allowance of such credit or refund.

* * * * * * *

(d) SUGAR.--With respect to any sugar or articles composed in chief value of sugar upon which tax imposed under section 4501(b) has been paid and which, on June 30, 19 61, are held by the importer and intended for sale or other disposition, there shall be refunded (without interest) to such importer, subject to such regulations as may be prescribed by the Secretary or his delegate, an amount equal to the tax paid with respect to such sugar or articles composed in chief value of sugar, if claim for such refund is filed with the Secretary or his delegate on or before September 30, 19 61.

* * * * * * *

[Sec. 6412 as amended by sec. 3(b)(4), Tax Rate Extension Act 1955 (69 Stat. 15) [P.L. 18, C.B. 1955-1, 619]; sec. 3(b)(4), Tax Rate Extension Act 1956 (70 Stat. 67) [P.L. 458, C.B. 1956-1, 869]; sec. 19, Act of May 29, 19 56 (Pub. Law 545, 84th Cong., 70 Stat. 221) [C.B. 1956-1, 887]; sec. 208(a), Highway Revenue Act 1956 (70 Stat. 392) [P.L. 627, C.B. 1956-2, 1150]; sec. 3(b)(4), Tax Rate Extension Act 1957 (71 Stat. 10) [P.L. 85-12, C.B. 1957-1, 666]; sec. 3(b)(4), Tax Rate Extension Act 1958 (72 Stat. 260) [P.L. 85-475, C.B. 1958-3, 73]; sec. 162(a), Excise Tax Technical Changes Act 1958 (72 Stat. 1306) [P.L. 85-859, C.B. 1958-3, 92]; sec. 3(b)(3), Tax Rate Extension Act 1959 (73 Stat. 158) [P.L. 86-75, page 679, this Bulletin]]

PAR . 16. Section 301.6413 , as amended by Treasury Decision 6292, approved April 15, 19 58, [C.B. 1958-1, 476], is further amended to read as follows:

§301.6413 STATUTORY PROVISIONS; SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES.

SEC . 6413. SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES. * * *

(c) SPECIAL REFUNDS.--

(1) IN GENERAL.--If by reason of an employee receiving wages from more than one employer during a calendar year after the calendar year 1950 and prior to the calendar year 1955, the wages wages received by him during such year exceed $3,600, the employee shall be entitled (subject to the provisions of section 31(b)) to a credit or refund of any amount of tax, with respect to such wages, imposed by section 1400 of the Internal Revenue Code of 1939 and deducted from the employee's wages (whether or not paid to the Secretary or his delegate), which exceeds the tax with respect to the first $3,600 of such wages received; or if by reason of an employee receiving wages from more than one employer (A) during any calendar year after the calendar year 1954 and prior to the calendar year 1959, the wages received by him during such year exceed $4,200, or (B) during any calendar year after the calendar year 1958, the wages received by him during such year exceed $4,800, the employee shall be entitled (subject to the provisions of section 31(b)) to a credit or refund of any amount of tax, with respect to such wages, imposed by section 3101 and deducted from the employee's wages (whether or not paid to the Secretary or his delegate), which exceeds the tax with respect to the first $4,200 of such wages received in such calendar year after 1954 and before 1959, or which exceeds the tax with respect to the first $4,800 of such wages received in such calendar year after 1958.

(2) APPLICABILITY IN CASE OF FEDERAL AND STATE EMPLOYEES AND EMPLOYEES OF CERTAIN FOREIGN CORPORATIONS.--

(A) FEDERAL EMPLOYEES.--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, for purposes of this subsection, be deemed a separate employer, and the term "wages" includes for purposes of this subsection the amount, not to exceed $3,600 for the calendar year 1951, 1952, 1953, or 1954, $4,200 for the calendar year 1955, 1956, 1957, or 1958, or $4,800 for any calendar year after 1958, determined by each such head or agent as constituting wages paid to an employee.

* * * * * * *

[Sec. 6413 as amended by sec. 202, Social Security Amendments 1954 (68 Stat. 1089) [P.L. 761, C.B. 1954-2, 603]; sec. 402(d), Social Security Amendments 1958 (72 Stat. 1043) [P.L. 85-840, C.B. 1958-3, 85]]

PAR . 17. Section 301.6415 is amended to read as follows:

§301.6415 STATUTORY PROVISIONS; CREDITS OR REFUNDS TO PERSONS WHO COLLECTED CERTAIN TAXES.

SEC . 6415 CREDITS OR REFUNDS TO PERSONS WHO COLLECTED CERTAIN TAXES.

(a) ALLOWANCE OF CREDITS OR REFUNDS.--Credit or refund of any overpayment of tax imposed by section 4231(1), 4231(2), 4231(3), 4241, 4251, 5261, or 4286 may be allowed to the person who collected the tax and paid it to the Secretary or his delegate if such person establishes, under such regulations as the Secretary or his delegate may prescribe, that he has repaid the amount of such tax to the person from whom he collected it, or obtains the consent of such person to the allowance of such credit or refund. For purposes of this subsection, in the case of any payment outside the United States in respect of which tax is imposed under paragraph (1), (2), or (3) of section 4231, the person who paid for the admission or for the use of the box or seat shall be considered the person from whom the tax was collected.

(b) CREDIT ON RETURNS.--Any person entitled to a refund of tax imposed by section 4231(1), 4231(2), 4231(3), 4241, 4251, 4261, or 4286 paid, or collected and paid, to the Secretary or his delegate by him may, instead of filing a claim for refund, take credit therefor against taxes imposed by such section due upon any subsequent return.

(c) REFUND OF OVERCOLLECTIONS.--In case any person required under section 4231(1), 4231(2), 4231(3), 4241, 4251, 4261, or 4286 to collect any tax shall make an overcollection of such tax, such person shall, upon proper application, refund such overcollection to the person entitled thereto.

(d) REFUND OF TAXABLE PAYMENT.--Any person making a refund of any payment on which tax imposed by section 4231(1), 4231(2), 4231(3), 4241, 4251, 4261, or 4286 has been collected may repay therewith the amount of tax collected on such payment.

[Sec. 6415 as amended by sec. 4(b)(4), Tax Rate Extension Act 1958 (72 Stat. 260); sec. 163(d)(1), Excise Tax Technical Changes Act 1958 (72 Stat. 1311)]

PAR . 18. Section 301.6416 , as amended by Treasury Decision 6292, approved April 15, 19 58, is further amended to read as follows:

§301.6416. STATUTORY PROVISIONS; CERTAIN TAXES ON SALES AND SERVICES.

SEC . 6416. CERTAIN TAXES ON SALES AND SERVICES.

(a) CONDITION TO ALLOWANCE.--

(1) GENERAL RULE.--No credit or refund of any overpayment of tax imposed by section 4231(4), (5), or (6) (cabarets, etc.), chapter 31 (retailers taxes), or chapter 32 (manufacturers taxes) shall be allowed or made unless the person who paid the tax establishes, under regulations prescribed by the Secretary or his delegate, that he--

(A) Has not included the tax in the price of the article, admission, or service with respect to which it was imposed and has not collected the amount of the tax from the person who purchased such article, admission, or service;

(B) Has repaid the amount of the tax--

(i) In the case of any tax imposed by chapter 31 (other than the tax imposed by section 4041(a)(1) or (b)(1)), to the purchaser of the article,

(ii) In the case of any tax imposed by chapter 32 and the tax imposed by section 4041(a)(1) or (b)(1) (diesel and special motor fuels), to the ultimate purchaser of the article, or

(iii) In the case of any tax imposed by section 4231(4), (5), or (6) (cabarets, etc.) to the person who paid for the admission, refreshment, service, or merchandise;

(C) In the case of an overpayment under subsection (b)(2), (b)(3)(C) or (D), or (b)(4) of this section--

(i) Has repaid or agreed to repay the amount of the tax to the utimate [ultimate] vendor of the article, or

(ii) Has obtained the written consent of such ultimate vendor to the allowance of the credit or the making of the refund; or

(D) Has filed with the Secretary or his delegate the written consent of the person referred to in subparagraph (B)(i), (ii), or (iii), as the case may be, to the allowance of the credit or the making of the refund.

(2) EXCEPTIONS.--This subsection shall not apply to--

(A) The tax imposed by section 4041(a)(2) or (b)(2) (use of diesel and special motor fuels), and

(B) An overpayment of tax under paragraph (1), (3)(A) or (B), or (5) of subsection (b) of this section.

(3) SPECIAL RULES.--For purposes of this subsection--

(A) Any tax collected under section 4231(6) from a concessionaire and paid to the Secretary or his delegate shall be treated as paid by the concessionaire;

(B) If tax under chapter 31 was paid by a supplier pursuant to an agreement under section 6011(c), either the person who (without regard to section 6011(c)) was required to return and pay the tax or the supplier may be treated as the person who paid the tax;

(C) In any case in which the Secretary or his delegate determines that an article is not taxable, the term "ultimate purchaser" when used in paragraph (1)(B)(ii) of this subsection) includes a wholesaler, jobber, distributor, or retailer who, on the 15th day after the date of such determination, holds such article for sale; but only if claim for credit or refund by reason of this subparagraph is filed on or before the day for filing the return with respect to the taxes imposed under chapter 32 for the first period which begins more than 60 days after the date of such determination; and

(D) In applying paragraph (1)(C) to any overpayment under paragraph (2)(F), (3)(C) or (D), or (4) of subsection (b), the term "ultimate vendor" means the ultimate vendor of the other article.

(b) SPECIAL CASES IN WHICH TAX PAYMENTS CONSIDERED OVERPAYMENTS.--Under regulations prescribed by the Secretary or his delegate, credit or refund (without interest) shall be allowed or made in respect of the overpayments determined under the following paragraphs:

(1) PRICE READJUSTMENTS.--If the price of any article in respect of which a tax, based on such price, is imposed by chapter 31 or 32, is readjusted by reason of the return or repossession of the article or a covering or container, or by a bona fide discount, rebate, or allowance, the part of the tax proportionate to the part of the price repaid or credited to the purchaser shall be deemed to be an overpayment. The preceding sentence shall not apply in the case of an article in respect of which tax was computed under section 4223(b)(2); but if the price for which such article was sold is readjusted by reason of the return or repossession of the article, the part of the tax proportionate to the part of such price repaid or credited to the purchaser shall be deemed to be an overpayment.

(2) SPECIFIED USES AND RESALES.--The tax paid under chapter 32 (or under section 4041(a)(1) or (b)(1) in respect of any article shall be deemed to be an overpayment if such article was, by any person--

(A) Exported (except in any case to which subsection (g) applies);

(B) Used or sold for use as supplies for vessels or aircraft;

(C) Sold to a State or local government for the exclusive use of a State or local government;

(D) Sold to a nonprofit educational organization for its exclusive use;

(E) Resold to a manufacturer or producer for use by him as provided in subparagraph (A) or (B) of paragraph (3);

(F) In the case of a tire, inner tube, or receiving set, resold for use as provided in subparagraph (C) or (D) of paragraph (3) and the other article referred to in such subparagraph is by any person exported or sold as provided in such subparagraph;

(G) In the case of a liquid taxable under section 4041, sold for use as fuel in a diesel-powered highway vehicle or as fuel for the propulsion of a motor vehicle, motorboat, or airplane, if, (i) the vendee used such liquid otherwise than as fuel in such a vehicle, motorboat, or airplane or resold such liquid, or (ii) such liquid was (within the meaning of paragraphs (1), (2), and (3) of section 6420(c)) used on a farm for farming purposes;

(II) In the case of a liquid in respect of which tax was paid under section 4041 at the rate of 3 cents a gallon, used during any calendar quarter in vehicles engaged in furnishing scheduled common carrier public passenger land transportation service along regular routes; except that (i) this subparagraph shall apply only if the 60 percent passenger fare revenue test set forth in section 6421(b)(2) is met with respect to such quarter, and (ii) the amount of such overpayment for such quarter shall be an amount determined by multiplying 1 cent for each gallon of liquid so used by the percentage which such person's tax-exempt passenger fare revenue (as defined in section 6421(d)(2)) derived from such scheduled service during such quarter was of his total passenger fare revenue (not including the tax imposed by section 4261, relating to the tax on transportation of persons) derived from such scheduled service during such quarter;

(I) In the case of a liquid in respect of which tax was paid under section 4041(a)(1) at the rate of 3 cents a gallon, used or resold for use as a fuel in a diesel-powered highway vehicle (i) which (at the time of such use or resale) is not registered, and is not required to be registered, for highway use under the the laws of any State or foreign country, or (ii) which, in the case of a diesel-powered highway vehicle owned by the United States, is not used on the highway; except that the amount of any overpayment by reason of this subparagraph shall not exceed an amount computed at the rate of 1 cent a gallon;

(J) In the case of a liquid in respect of which tax was paid under section 4041(b)(1) at the rate of 3 cents a gallon, used or resold for use otherwise than as a fuel for the propulsion of a highway vehicle (i) which (at the time of such use or resale) is registered, or is required to be registered, for highway use under the laws of any State or foreign country, or (ii) which, in the case of a highway vehicle owned by the United States, is used on the highway; except that the amount of any overpayment by reason of this subparagraph shall not exceed an amount computed at the rate of 1 cent a gallon;

(K) In the case of any article taxable under section 4061(b) (other than spark plugs and storage batteries), used or sold for use as repair or replacement parts or accessories for farm equipment (other than equipment taxable under section 4061(a));

(L) In the case of tread rubber in respect of which tax was paid under section 4071(a)(4), used or sold for use otherwise than in the recapping or retreading of tires of the type used on highway vehicles (as defined in section 4072(2)), unless credit or refund of such tax is allowable under subsection (b)(3);

(M) In the case of gasoline, used or sold for use in production of special motor fuels referred to in section 4041(b);

(N) In the case of lubricating oil, used or sold for non-lubricating purposes;

(O) In the case of lubricating oil in respect of which tax was paid at the rate of 6 cents a gallon, used or sold for use as cutting oils (within the meaning of section 4092(b)); except that the amount of such overpayment shall not exceed an amount computed at the rate of 3 cents a gallon;

(P) In the case of any musical instrument taxable under section 4151, sold to a religious institution for exclusively religious purposes;

(Q) In the case of unexposed motion picture film, used or sold for use in the making of newsreel motion picture film.

(3) TAX-PAID ARTICLES USED FOR FURTHER MANUFACTURE, ETC .--If the tax imposed by chapter 32 has been paid with respect to the sale of any article by the manufacturer, producer, or importer thereof to a second manufacturer or producer, such tax shall be deemed to be an overpayment by such second manufacturer or producer if--

(A) In the case of any article other than an article to which subparagraph (B), (C), or (D) applies, such article is used by the second manufacturer or producer as material in the manufacture or production of, or as a component part of, another article taxable under chapter 32 manufactured or produced by him;

(B) In the case of--

(i) A part or accessory taxable under section 4061(b),

(ii) A radio or television component taxable under section 4141, or

(iii) A camera lens taxable under section 4171,

such article is used by the second manufacturer or producer as material in the manufacture or production of, or as a component part of, any other article manufactured or produced by him;

(C) In the case of--

(i) A tire or inner tube taxable under section 4071, or

(ii) An automobile radio or television receiving set taxable under section 4141,

such article is sold by the second manufacturer or producer on or in connection with, or with the sale of, any other article manufactured or produced by him and such other article is by any person exported, sold to a State or local government for the exclusive use of a State or local government, sold to a nonprofit educational organization for its exclusive use, or used or sold for use as supplies for vessels or aircraft; or

(D) In the case of a radio receiving set or an automobile radio receiving set--

(i) Such set is used by the second manufacturer or producer as a component part of any other article manufactured or produced by him, and

(ii) Such other article is by any person exported, sold to a State or local government for the exclusive use of a State or local government, sold to a nonprofit educational organization for its exclusive use, or used or sold for use as supplies for vessels or aircraft.

For purposes of subparagraphs (A) and (B), an article shall be treated as having been used as a component part of another article if, had it not been broken or rendered useless in the manufacture or production of such other article, it would have been so used.

(4) TIRES, INNER TUBES, AND AUTOMOBILE RADIO AND TELEVISION RECEIVING SETS.--If--

(A) (i) A tire or inner tube taxable under section 4071, or automobile radio or television receiving set taxable under section 4141, is sold by the manufacturer, producer, or importer thereof on or in connection with, or with the sale of, any other article manufactured or produced by him, or

(ii) A radio receiving set or an automobile radio receiving set is used by the manufacturer thereof as a component part of any other article manufactured or produced by him; and

(B) Such other article is by any person exported, sold to a State or local government for the exclusive use of a State or local government, sold to a nonprofit educational organization for its exclusive use, or used or sold for use as supplies for vessels or aircraft,

any tax imposed by chapter 32 in respect of such tire, inner tube, or receiving set which has been paid by the manufacturer, producer, or importer thereof shall be deemed to be an overpayment by him.

(5) RETURN OF CERTAIN INSTALLMENT ACCOUNTS.--If--

(A) Tax was paid under section 4053(b)(1) or 4216(e)(1) in respect of any installment account,

(B) Such account is, under the agreement under which the account was sold, returned to the person who sold such account, and

(C) The consideration is readjusted as provided in such agreement,

the part of the tax paid under section 4053(b)(1) or 4216(e)(1) proportionate to the part of the consideration repaid or credited to the purchaser of such account shall be deemed to be an overpayment.

This subsection shall apply in respect of an article only if the exportation or use referred to in the applicable provision of this subsection occurs before any other use, or, in the case of a sale or resale, the use referred to in the applicable provision of this subsection is to occur before any other use.

(c) CREDIT FOR TAX PAID ON TIRES, INNER TUBES, OR RADIO OR TELEVISION RECEIVING SETS.--If tires, inner tubes, or automobile radio or television receiving sets on which tax has been paid under chapter 32 are sold on or in connection with, or with the sale of, another article taxable under chapter 32, there shall (under regulations prescribed by the Secretary or his delegate) be credited (without interest) against the tax imposed on the sale of such other article, an amount determined by multiplying the applicable percentage rate of tax for such other article by--

(1) The purchase price (less, in the case of tires, the part of such price attributable to the metal rim or rim base) if such tires or inner tubes were taxable under section 4071 (relating to tax on tires and inner tubes), or, in the case of automobile radio or television receiving sets, if such sets were taxable under section 4141; or

(2) If such tires, inner tubes, or automobile radio or television receiving sets were taxable under section 4218 (relating to use by manufacturer, producer, or importer), the price (less, in the case of tires, the part of such price attributable to the metal rim or rim base) at which such or similar tires, inner tubes, or sets are sold, in the ordinary course of trade, by manufacturers, producers, or importers thereof, as determined by the Secretary or his delegate.

The credit provided by this subsection shall be allowable only in respect of the first sale on or in connection with, or with the sale of, another article on the sale of which tax is imposed under chapter 32.

(d) MECHANICAL PENCILS TAXABLE AS JEWELRY.--If any article, on the sale of which tax has been paid under section 4201, is further manufactured or processed resulting in an article taxable under section 4001, the person who sells such article at retail shall, in the computation of the retailers' excise tax due on such sale, be entitled to a credit or refund, without interest, in an amount equal to the tax paid under section 4201.

(e) REFUND TO EXPORTER OR SHIPPER.--Under regulations prescribed by the Secretary or his delegate the amount of any tax imposed by subchapter E of chapter 31, or chapter 32 erroneously or illegally collected in respect of any article exported to a foreign country or shipped to a possession of the United States may be refunded to the exporter or shipper thereof, if the person who paid such tax waives his claim to such amount.

(f) CREDIT ON RETURNS.--Any person entitled to a refund of tax imposed by chapter 31 or 32, paid to the Secretary or his delegate may, instead of filing a claim for refund, take credit therefor against taxes imposed by such chapter due on any subsequent return.

(g) AUTOMOBILES, ETC .--Under regulations prescribed by the Secretary or his delegate, subsection (b)(2)(A) shall apply, in the case of any article subject to the tax imposed by sections 4061(a), 4111, 4121, and 4141, only if the article with respect to which the tax was paid was sold by the manufacturer, producer, or importer for export after receipt by him of notice of intent to export or to resell for export.

(h) ACCOUNTING PROCEDURES FOR LIKE ARTICLES.--Under regulations prescribed by the Secretary or his delegate, if any person uses or resells like articles, then for purposes of this section the manufacturer, producer, or importer of any such article may be identified, and the amount of tax paid under chapter 32 in respect of such article may be determined--

(1) On a first-in-first-out basis,

(2) On a last-in-first-out basis, or

(3) In accordance with any other consistent method approved by the Secretary or his delegate.

(i) MEANING OF TERMS.--For purposes of this section, and term used in this section has the same meaning as when used in chapter 31, 32, or 33, as the case may be.

[Sec. 6416 as amended by sec. 2, Act of Aug. 11, 19 55 (Pub. Law 355, 84th Cong., 69 Stat. 676) [C.B. 1955-2, 765]; secs. 1(h), (i), 2(b), Act of Aug. 11, 19 55 (Pub. Law 367, 84th Cong., 69 Stat. 690) [C.B. 1955-2, 768]; sec. 2(b), Act of Apr. 2, 19 56 (Pub. Law 466, 84th Cong., 70 Stat. 90) [C.B. 1956-1, 870]; sec. 208(b), Highway Revenue Act 1956 (70 Stat. 393) [P.L. 627, C.B. 1956-2, 1150]; sec. 4(b)(5), (6), Tax Rate Extension Act 1956 (72 Stat. 260) [P.L. 85-475, C.B. 1958-3, 73]; sec. 163(a), (c), Excise Tax Technical Changes Act 1958 (72 Stat. 1306) [P.L. 85-859, C.B. 1958-3, 92]]

PAR . 19. Section 301.6420 is amended to read as follows:

§301.6420 STATUTORY PROVISIONS; GASOLINE USED ON FARMS.

SEC . 6420. GASOLINE USED ON FARMS. * * *

(c) MEANING OF TERMS. * * *

(3) FARMING PURPOSES. * * *

(A) By the owner, tenant, or operator of a farm, in connection with cultivating the soil, or in connection with raising or harvesting any agricultural or horticultural commodity, including the raising, shearing, feeding, caring for, training, and management of livestock, bees, poultry, and fur-bearing animals and wildlife, on a farm of which he is the owner, tenant, or operator; except that if such use is by any person other than the owner, tenant, or operator of such farm, then (i) for purposes of this subparagraph, in applying subsection (a) to this subparagraph, and for purposes of section 6416(b)(2)(G)(ii) (but not for purposes of section 4041), the owner, tenant, or operator of the farm on which gasoline or a liquid taxable under section 4041 is used shall be treated as the user and ultimate purchaser of such gasoline or liquid, and (ii) for purposes of applying section 6416(b)(2)(G)(ii), any tax paid under section 4041 in respect of a liquid used on a farm for farming purposes (within the meaning of this subparagraph) shall be treated as having been paid by the owner, tenant, or operator of the farm on which such liquid is used;

* * * * * * *

[Sec. 6420 as added by sec. 1, Act of Apr. 2, 19 56 (Pub. Law 466, 84th Cong., 70 Stat. 87), and as amended by sec. 163(d)(2), Excise Tax Technical Changes Act 1958 (72 Stat. 1311)]

PAR . 20. Section 301.6421 is amended to read as follows:

§301.6421 STATUTORY PROVISIONS, GASOLINE USED FOR CERTAIN NONHIGHWAY PURPOSES OR BY LOCAL TRANSIT SYSTEMS.

SEC . 6421. GASOLINE USED FOR CERTAIN NONHIGHWAY PURPOSES OR BY LOCAL TRANSIT SYSTEMS. * * *

(c) TIME FOR FILING CLAIMS; PERIOD COVERED.--

(1) GENERAL RULE.--Except as provided in paragraph (2), not more than one claim may be filed under subsection (a), and not more than one claim may be filed under subsection (b), by any person with respect to gasoline used during the one-year period ending on June 30 of any year. No claim shall be allowed under this paragraph with respect to any one-year period unless filed on or before September 30 of the year in which such one-year period ends.

(2) EXCEPTION.--If $1,000 or more is payable under this section to any person with respect to gasoline used during a calendar quarter, a claim may be filed under this section by such person with respect to gasoline used during such quarter. No claim filed under this paragraph shall be allowed unless filed on or before the last day of the first calendar quarter following the calendar quarter for which the claim is filed.

* * * * * * *

(i) CROSS REFERENCES. * * *

(2) For partial refund of tax in case of diesel fuel and special motor fuels used for certain nonhighway purposes, see section 6416(b)(2)(I) and (J).

(3) For partial refund of tax in case of diesel fuel and special motor fuels used by local transit systems, see section 6416(b)(2)(H).

* * * * * * *

[Sec. 6421 as added by sec. 208(c), Highway Revenue Act 1956 (70 Stat. 394) [P.L. 627, C.B. 1956-2, 1150], and as amended by sec. 2, Act of July 25, 19 56 (Pub. Law 796, 84th Cong., (70 Stat. 644) [C.B. 1956-2, 1180]; secs. 163(d)(3), 164, Excise Tax Technical Changes Act 1958 (72 Stat. 1312) [P.L. 85-859, C.B. 1958-3, 92]]

PAR . 21. Section 301.6422 , as amended by Treasury Decision 6292, approved April 15, 19 58, is further amended to read as follows:

§301.6422 STATUTORY PROVISIONS; CROSS REFERENCES.

SEC . 6422. CROSS REFERENCES.

* * * * * * *

(14) For special provisions relating to alcohol and tobacco taxes, see subtitle E.

[Sec. 6420 as renumbered 6422 by sec. 1, Act of Apr. 2, 19 56 (Pub. Law 466, 84th Cong., (70 Stat. 87); sec. 208(c), Highway Revenue Act 1956 (70 Stat. 394); and as amended by sec. 204(4), Excise Tax Technical Changes Act 1958 (72 Stat. 1429)]

PAR . 22. Immediately after §301.6422 insert the following new sections:

§301.6423 STATUTORY PROVISIONS; CONDITIONS TO ALLOWANCE IN THE CASE OF ALCOHOL AND TOBACCO TAXES.

SEC . 6423. CONDITIONS TO ALLOWANCE IN THE CASE OF ALCOHOL AND TOBACCO TAXES.

(a) CONDITIONS.--No credit or refund shall be allowed or made, in pursuance of a court decision or otherwise, of any amount paid or collected as an alcohol or tobacco tax unless the claimant establishes (under regulations prescribed by the Secretary or his delegate)--

(1) That he bore the ultimate burden of the amount claimed; or

(2) That he has unconditionally repaid the amount claimed to the person who bore the ultimate burden of such amount; or

(3) That (A) the owner of the commodity furnished him the amount claimed for payment of the tax, (B) he has filed with the Secretary or his delegate the written consent of such owner to the allowance to the claimant of the credit or refund, and (C) such owner satisfies the requirements of paragraph (1) or (2).

(b) FILING OF CLAIMS.--No credit or refund of any amount to which subsection (a) applies shall be allowed or made unless a claim therefor has been filed by the person who paid the amount claimed, and, except as hereinafter provided in this subsection, unless such claim is filed after April 30, 19 58, and within the time prescribed by law, and in accordance with regulations prescribed by the Secretary or his delegate. All evidence relied upon in support of such claim shall be clearly set forth and submitted with the claim. Any claimant who has on or before April 30, 19 58, filed a claim for any amount to which subsection (a) applies may, if such claim was not barred from allowance on April 30, 19 58, file a superseding claim after April 30, 19 58, and on or before April 30, 19 59, conforming to the requirements of this section and covering the amount (or any part thereof) claimed in such prior claim. No claim filed before May 1, 19 58, for the credit or refund of any amount to which subsection (a) applies shall be held to constitute a claim for refund or credit within the meaning of, or for purposes of, section 7422(a); except that any claimant who instituted a suit before June 15, 19 57, for recovery of any amount to which subsection (a) applies shall not be barred by this subsection from the maintenance of such suit as to any amount claimed in such suit on such date if in such suit he establishes the conditions to allowance required under subsection (a) with respect to such amount.

(c) PERIOD NOT EXTENDED.--Any suit or proceeding, with respect to any amount to which subsection (a) applies, which is barred on April 30, 19 58, shall remain barred. No claim for credit or refund of any such amount which is barred from allowance on April 30, 19 58, shall be allowed after such date in any amount.

(d) APPLICATION OF SECTION.--This section shall apply only if the credit or refund is claimed on the grounds that an amount of alcohol or tobacco tax was assessed or collected erroneously, illegally, without authority, or in any manner wrongfully, or on the grounds that such amount was excessive. This section shall not apply to--

(1) Any claim for drawback,

(2) Any claim made in accordance with any law expressly providing for credit or refund where a commodity is withdrawn from the market, returned to bond, or lost or destroyed, and

(3) Any amount claimed with respect to a commodity which has been lost, where a suit or proceeding was instituted before June 15, 19 57.

(e) MEANING OF TERMS.--For purposes of this section--

(1) ALCOHOL OR TOBACCO TAX.--The term "alcohol or tobacco tax" means--

(A) Any tax imposed by chapter 51 (other than part II of subchapter A, relating to occupational taxes) or by chapter 52 or by any corresponding provision of prior internal revenue laws, and

(B) In the case of any commodity of a kind subject to a tax described in subparagraph (A), any tax equal to any such tax, any additional tax, or any floor stocks tax.

(2) TAX.--The term "tax" includes a tax and an exaction denominated a "tax" and any penalty, addition to tax, additional amount, or interest applicable to any such tax.

(3) ULTIMATE BURDEN.--The claimant shall be treated as having borne the ultimate burden of an amount of an alcohol or tobacco tax for purposes of subsection (a)(1), and the owner referred to in subsection (a)(3) shall be treated as having borne such burden for purposes of such subsection, only if--

(A) He has not, directly or indirectly, been relieved of such burden or shifted such burden to any other person,

(B) No understanding or agreement exists for any such relief or shifting, and

(C) If he has neither sold nor contracted to sell the commodities involved in such claim, he agrees that there will be no such relief or shifting, and furnishes such bond as the Secretary or his delegate may require to insure faithful compliance with his agreement.

[Sec. 6423 as added by Act of Fed. 11, 1958 (Pub. Law 85-323, 72 Stat. 8) [C.B. 1958-1, 630]]

§301.6423-1 CONDITIONS TO ALLOWANCE IN THE CASE OF ALCOHOL AND TOBACCO TAXES.--For regulations under this section, see the regulations under Part 170 of this chapter, relating to distilled spirits, wine and beer, and the regulations under Part 296 of this chapter, relating to tobacco materials, tobacco products, and cigarette papers and tubes.

PAR . 23. Section 301.6501 (a) is amended to read as follows:

§301.6501 (a) STATUTORY PROVISIONS; LIMITATIONS ON ASSESSMENT AND COLLECTION; GENERAL RULE.

SEC . 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION.

(a) GENERAL RULE.--Except as otherwise provided in this section, the amount of any tax imposed by this title shall be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed) or, if the tax is payable by stamp, at any time after such tax became due and before the expiration of 3 years after the date on which any part of such tax was paid, and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period.

[Sec. 6501(a) as amended by sec. 165(a), Excise Tax Technical Changes Act 1958 (72 Stat. 1313)]

PAR . 24. Section 31.6501(a)-1 is amended to read as follows:

§301.6501 (a)-1 PERIOD OF LIMITATIONS UPON ASSESSMENT AND COLLECTION.--(a) The amount of any tax imposed by the Internal Revenue Code of 1954 (other than a tax collected by means of stamps) shall be assessed within 3 years after the return was filed. For rules applicable in cases where the return is filed prior to the due date thereof, see section 6501(b). In the case of taxes payable by stamp, assessment shall be made at any time after the tax became due and before the expiration of 3 years after the date on which any part of the tax was paid. For exceptions and additional rules, see subsection (b) to (g) of section 6501, and for cross references to other provisions relating to limitations on assessment and collection, see sections 6501(h) and 6504.

* * * * * * *

PAR . 25. Section 301.6501 (c) is amended to read as follows:

§301.6501 (c) STATUTORY PROVISIONS; LIMITATIONS ON ASSESSMENT AND COLLECTION; EXCEPTIONS.

SEC . 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION. * * *

(c) EXCEPTIONS. * * *

(6) TAX RESULTING FROM CERTAIN DISTRIBUTIONS OR FROM TERMINATION AS LIFE INSURANCE COMPANY.--In the case of any tax imposed under section 802(a)(1) by reason of section 802(b)(3) on account of a termination of the taxpayer as an insurance company or as a life insurance company to which section 815(d)(2)(A) applies, or on account of a distribution by the taxpayer to which section 815(d)(2)(B) applies, such tax may be assessed within 3 years after the return was filed (whether or not such return was filed on or after the date prescribed) for the taxable year for which the taxpayer ceases to be an insurance company, the second taxable year for which the taxpayer is not a life insurance company, or the taxable year in which the distribution is actually made, as the case may be.

[Sec. 6501(c) as amended by sec. 3(g), Life Insurance Company Income Tax Act 1959 (73 Stat. 140) [P.L. 86-69, page 654, this Bulletin]]

PAR . 26. Section 301.6501 (d) is amended to read as follows:

§301.6501 (d) STATUTORY PROVISIONS; LIMITATIONS OF ASSESSMENT AND COLLECTION; REQUEST FOR PROMPT ASSESSMENT.

SEC . 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION. * * *

(d) REQUEST FOR PROMPT ASSESSMENT.--Except as otherwise provided in subsection (c), (e), or (f), in the case of any tax (other than the tax imposed by chapter 11 of subtitle B, relating to estate taxes) for which return is required in the case of a decedent, or by his estate during the period of administration, or by a corporation, the tax shall be assessed, and any proceeding in court without assessment for the collection of such tax shall be begun, within 18 months after written request therefor (filed after the return is made and filed in such manner and such form as may be prescribed by regulations of the Secretary or his delegate) by the executor, administrator, or other fiduciary representing the estate of such decedent, or by the corporation, but not after the expiration of 3 years after the return was filed. This subsection shall not apply in the case of a corporation unless--

(1) (A) such written request notifies the Secretary or his delegate that the corporation contemplates dissolution at or before the expiration of such 18-month period, (B) the dissolution is in good faith begun before the expiration of such 18-month period, and (C) the dissolution is completed;

(2) (A) such written request notifies the Secretary or his delegate that a dissolution has in good faith been begun, and (B) the dissolution is completed; or

(3) a dissolution has been completed at the time such written request is made.

[Sec. 6501(d) as amended by sec. 80, Technical Amendments Act 1958 (72 Stat. 1662)]

PAR . 27. Section 301.6501 (d)-1 is amended to read as follows:

§301.6501 (d)-1 REQUEST FOR PROMPT ASSESSMENT.--(a) Except as otherwise provided in section 6501(c), (e), or (f), any tax for which a return is required and for which:

(1) A decedent or an estate of a decedent may be liable, other than the estate tax imposed by chapter 11, or

(2) A corporation which is contemplating dissolution, is in the process of dissolution, or has been dissolved, may be liable,

shall be assessed, or a proceeding in court without assessment for the collection of such tax shall be begun, within 18 months after the receipt of a written request for prompt assessment thereof.

* * * * * * *

(c) In the case of a corporation the 18-month period shall not apply unless:

(1) The written request notifies the district director that the corporation contemplates dissolution at or before the expiration of such 18-month period; the dissolution is in good faith begun before the expiration of such 18-month period; and the dissolution so begun is completed either before or after the expiration of such 18-month period; or

(2) The written request notifies the district director that a dissolution has in good faith been begun, and the dissolution is completed either before or after the expiration of such 18-month period; or

(3) A dissolution has been completed at the time the written request is made.

PAR . 28. Section 301.6501 (g) is amended to read as follows:

§301.6501 (g) STATUTORY PROVISIONS; LIMITATIONS ON ASSESSMENT AND COLLECTION; CERTAIN INCOME TAX RETURNS OF CORPORATIONS.

SEC . 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION. * * *

(g) CERTAIN INCOME TAX RETURNS OF CORPORATIONS. * * *

(2) EXEMPT ORGANIZATIONS.--If a taxpayer determines in good faith that it is an exempt organization and files a return as such under section 6033, and if such taxpayer is thereafter held to be a taxable organization for the taxable year for which the return is filed, such return shall be deemed the return of the organization for purposes of this section.

[Sec. 6501(g) as amended by sec. 81(a), Technical Amendments Act 1958 (72 Stat. 1662)]

PAR . 29. Section 301.6501 (h) is redesignated §301.6501(i) and amended to read as follows:

§301.6501 (i) STATUTORY PROVISIONS; LIMITATIONS ON ASSESSMENT AND COLLECTION; JOINT INCOME RETURN AFTER SEPARATE RETURN.

SEC . 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION. * * *

(i) JOINT INCOME RETURN AFTER SEPARATE RETURN.--For period of limitations for assessment and collection in the case of a joint income return filed after separate returns have been filed, see section 6013(b)(3) and (4).

[Sec. 6501(i) as redesignated by sec. 81(b), Technical Amendments Act 1958 (72 Stat. 1663)]

PAR . 30. Immediately after §301.6501(g)-1 insert the following new sections:

§301.6501 (h) STATUTORY PROVISIONS; LIMITATIONS ON ASSESSMENT AND COLLECTION; NET OPERATING LOSS CARRYBACKS.

SEC . 6501. LIMITATIONS ON ASSESSMENT AND COLLECTION. * * *

(h) NET OPERATING LOSS CARRYBACKS.--In the case of a deficiency attributable to the application to the taxpayer of a net operating loss carryback (including deficiencies which may be assessed pursuant to the provisions of section 6213(b)(2)), such deficiency may be assessed at any time before the expiration of the period within which a deficiency for the taxable year of the net operating loss which results in such carryback may be assessed.

[Sec. 6501(h) as added by sec. 81(b), Technical Amendments Act 1958 (72 Stat. 1663)]

§301.6501 (h)-1 NET OPERATING LOSS CARRYBACKS.--In the case of a deficiency attributable to the application to the taxpayer of a net operating loss carryback (including deficiencies which may be assessed pursuant to the provisions of section 6213(b)(2)), such deficiency may be assessed at any time before the expiration of the period within which a deficiency for the taxable year of the net operating loss which results in such carryback may be assessed.

PAR . 31. Section 301.6503 (d) is amended to read as follows:

§301.6503(d) STATUTORY PROVISIONS; SUSPENSION OF RUNNING OF PERIOD OF LIMITATION; EXTENSIONS OF TIME FOR PAYMENT OF ESTATE TAX.

SEC . 6503. SUSPENSION OF RUNNING OF PERIOD OF LIMITATION. * * *

(d) EXTENSIONS OF TIME FOR PAYMENT OF ESTATE TAX.--The running of the period of limitations for collection of any tax imposed by chapter 11 shall be suspended for the period of any extension of time for payment granted under the provisions of section 6161(a)(2) or (b)(2) or under the provisions of section 6166.

[Sec. 6503(d) as amended by sec. 206(d), Small Business Tax Revision Act 1958 (72 Stat. 1685) [P.L. 85-866, C.B. 1958-3, 254]]

PAR . 32. Section 301.6503 (d)-1 is amended to read as follows:

§3016503 (d)-1 SUSPENSION OF RUNNING OF PERIOD OF LIMITATION; EXTENSION OF TIME FOR PAYMENT OF ESTATE TAX.--Where an estate is granted an extension of time as provided in section 6161(a)(2) or (b)(2), or under the provisions of section 6166, for payment of any estate tax, the running of the period of limitations for collection of such tax is suspended for the period of time for which the extension is granted.

PAR . 33. Section 301.6504 , as amended by Treasury Decision 6292, approved April 15, 19 58 [C.B. 1958-1, 476], is further amended to read as follows:

§301.6504 STATUTORY PROVISIONS; CROSS REFERENCES.

SEC . 6504. CROSS REFERENCES. * * *

(15) Assessment and collection of interest, see section 6601(h).

[Sec. 6504 as amended by sec. 4(d), Act of Apr. 2, 19 56 (Pub. Law 466, 84th Cong., 70 Stat. 91); sec. 208(e)(5), Highway Revenue Act 1956 (70 Stat. 397); sec. 84(b), Technical Amendments Act 1958 (72 Stat. 1664)]

PAR . 34. Section 301.6511 (a) is amended to read as follows:

§301.6511 (a) STATUTORY PROVISIONS; LIMITATIONS ON CREDIT OR REFUND; PERIOD OF LIMITATION ON FILING CLAIM.

SEC . 6511. LIMITATIONS ON CREDIT OR REFUND.

(a) PERIOD OF LIMITATION ON FILING CLAIM.--Claim for credit or refund of an overpayment of any tax imposed by this title in respect of which tax the taxpayer is required to file a return shall be filed by the taxpayer within 3 years from the time the return was filed or 2 years from the time the tax was paid, whichever of such periods expires the later, or if no return was filed by the taxpayer, within 2 years from the time the tax was paid. Claim for credit or refund of an overpayment of any tax imposed by this title which is required to be paid by means of a stamp shall be filed by the taxpayer within 3 years from the time the tax was paid.

[Sec. 6511(a) as amended by sec. 82(a), Technical Amendments Act 1958 (72 Stat. 1663)]

PAR . 35. Section 301.6511 (a)-1 is amended to read as follows:

§301.6511 (a)-1 PERIOD OF LIMITATION ON FILING CLAIM.--(a) In the case of any tax (other than a tax payable by stamp):

(1) If a return is filed, a claim for credit or refund of an overpayment must be filed by the taxpayer within 3 years from the time the return was filed or within 2 years from the time the tax was paid, whichever of such periods expires the later.

* * * * * * *

PAR . 36. Section 301.6511 (b) is amended to read as follows:

§301.6511 (b) STATUTORY PROVISIONS; LIMITATIONS ON CREDIT OR REFUND; LIMITATION ON ALLOWANCE OF CREDITS AND REFUNDS.

SEC . 6511. LIMITATIONS ON CREDIT OR REFUND. * * *

(b) LIMITATION ON ALLOWANCE OF CREDITS AND REFUNDS. * * *

(2) LIMIT ON AMOUNT OF CREDIT OR REFUND.--

(A) LIMIT WHERE CLAIM FILED WITHIN 3-YEAR PERIOD.--If the claim was filed by the taxpayer during the 3-year period prescribed in subsection (a), the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return. If the tax was required to be paid by means of a stamp, the amount of the credit or refund shall not exceed the portion of the tax paid within the 3 years immediately preceding the filing of the claim.

(B) LIMIT WHERE CLAIM NOT FILED WITHIN 3-YEAR PERIOD. If the claim was not filed within such 3-year period, the amount of the credit or refund shall not exceed the portion of the tax paid during the 2 years immediately preceding the filing of the claim.

* * * * * * *

[Sec. 6511(b)(2) as amended by sec. 82(b), (c), Technical Amendments Act 1958 (72 Stat. 1663)]

PAR . 37. Section 301.6511 (b)-1 is amended to read as follows:

* * * * * * *

§301.6511 (b)-1 LIMITATIONS ON ALLOWANCE OF CREDITS AND REFUNDS.

(b) Limit on amount to be credited or refunded.--(1) * * *

(i) If a return was filed, and a claim is filed within 3 years from the time the return was filed, the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return.

PAR . 38. Section 301.6511 (d) is amended to read as follows:

§301.6511 (d) STATUTORY PROVISIONS; LIMITATIONS ON CREDIT OR REFUND; SPECIAL RULES APPLICABLE TO INCOME TAXES.

SEC . 6511. LIMITATIONS ON CREDIT OR REFUND. * * *

(d) SPECIAL RULES APPLICABLE TO INCOME TAXES. * * *

(2) SPECIAL PERIOD OF LIMITATION WITH RESPECT TO NET OPERATING LOSS CARRYBACKS.--

(A) PERIOD OF LIMITATION.--If the claim for credit or refund relates to an overpayment attributable to a net operating loss carryback, in lieu of the 3-year period of limitation prescribed in subsection (a), the period shall be that period which ends with the expiration of the 15th day of the 40th month (or 39th month, in the case of a corporation) following the end of the taxable year of the net operating loss which results in such carryback, or the period prescribed in subsection (c) in respect of such taxable year, whichever expires later. In the case of such a claim, the amount of the credit or refund may exceed the portion of the tax paid within the period provided in subsection (b)(2) or (c), whichever is applicable, to the extent of the amount of the overpayment attributable to such carryback.

* * * * * * *

[Sec. 6511(d) as amended by sec. 82(d), Technical Amendments Act 1958 (72 Stat. 1663)]

PAR . 39. Section 301.6511 (d)-1 is amended to read as follows:

§301.6511 (d)-1 OVERPAYMENT OF INCOME TAX ON ACCOUNT OF BAD DEBTS, WORTHLESS SECURITIES, ETC .--(a)(1) * * *

(ii) The effect that the deductibility of a debt or loss described in subdivision (i) of this subparagraph has on the application to the taxpayer of a carryover, then in lieu of the 3-year period from the time the return was filed in which claim may be filed or credit or refund allowed, as prescribed in section 6511(a) or (b), the period shall be 7 years from the date prescribed by law for filing the return (determined without regard to any extension of time for filing such return) for the taxable year for which the claim is made or the credit or refund allowed or made.

* * * * * * *

PAR . 40. Section 301.6511 (d)-2 is amended to read as follows:

§301.6511 (d)-2 OVERPAYMENT OF INCOME TAX ON ACCOUNT OF NET OPERATING LOSS CARRYBACKS.--(a) Special period of limitation.--(1) If the claim for credit or refund relates to an overpayment of income tax attributable to a net operating loss carryback, provided in section 172(b), then in lieu of the 3-year period from the time the return was filed in which the claim may be filed or credit or refund allowed, as prescribed in section 6511(a) or (b), the period shall be whichever of the following 2 periods expires later:

(i) The period which ends with the expiration of the fifteenth day of the fortieth month (or thirty-ninth month, in the case of a corporation) following the end of the taxable year of the net operating loss which resulted in the carryback; or

(ii) The period which ends with the expiration of the period prescribed in section 6511(c) within which a claim for credit or refund may be filed with respect to the taxable year of the net operating loss which resulted in the carryback.

* * * * * * *

PAR . 41. Section 301.6532 is amended to read as follows:

§301.6532 STATUTORY PROVISIONS; PERIODS OF LIMITATION ON SUITS.

SEC . 6532. PERIODS OF LIMITATION ON SUITS.

(a) SUITS BY TAXPAYERS FOR REFUNDS.

(1) GENERAL RULE.--No suit or proceeding under section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum, shall be begun before the expiration of 6 months from the date of filing the claim required under such section unless the Secretary or his delegate renders a decision thereon within that time, nor after the expiration of 2 years from the date of mailing by certified mail or registered mail by the Secretary or his delegate to the taxpayer of a notice of the disallowance of the part of the claim to which the suit or proceeding relates.

* * * * * * *

(4) RECONSIDERATION AFTER MAILING OF NOTICE.--Any consideration, reconsideration, or action by the Secretary or his delegate with respect to such claim following the mailing of a notice by certified mail or registered mail of disallowance shall not operate to extend the period within which suit may be begun.

* * * * * * *

[Sec. 6532 as amended by sec. 89(b), Technical Amendments Act 1958 (72 Stat. 1665)]

PAR . 42. Section 301.6532 -1 is amended to read as follows:

§301.6532-1 PERIODS OF LIMITATION ON SUITS BY TAXPAYERS.--(a) No suit or proceeding under section 7422(a) for the recovery of any internal revenue tax, penalty, or other sum shall be begun until whichever of the following first occurs:

(1) The expiration of 6 months from the date of the filing of the claim for credit or refund, or

(2) A decision is rendered on such claim prior to the expiration of 6 months after the filing thereof.

Except as provided in paragraph (b) of this section, no suit or proceeding for the recovery of any internal revenue tax, penalty, or other sum may be brought after the expiration of 2 years from the date of mailing by registered mail prior to September 3, 19 58, or by either registered or certified mail on or after September 3, 19 58, by a district director or an assistant regional commissioner to a taxpayer of a notice of disallowance of the part of the claim to which the suit or proceeding relates.

* * * * * * *

(c) The taxpayer may sign a waiver of the requirement that he be mailed a notice of disallowance. Such waiver is irrevocable and will commence the running of the 2-year period described in paragraph (a) of this section on the date the waiver is filed. The waiver shall set forth:

(1) The type of tax and the taxable period covered by the taxpayer's claim for refund;

(2) The amount of the claim;

(3) The amount of the claim disallowed;

(4) A statement that the taxpayer agrees the filing of the waiver will commence the running of the 2-year period provided for in section 6532(a)(1) as if a notice of disallowance had been sent the taxpayer by either registered or certified mail.

The filing of such a waiver prior to the expiration of 6 months from the date the claim was filed does not permit the filing of a suit for refund prior to the time specified in section 6532(a)(1) and paragraph (a) of this section.

(d) Any consideration, reconsideration, or other action with respect to a claim after the mailing by registered mail prior to September 3, 19 58, or by either registered or certified mail on or after September 3, 19 58, of a notice of disallowance or after the execution of a waiver referred to in paragraph (c) of this section, shall not extend the period for bringing suit or other proceeding under section 7422(a).

PAR . 43. Section 301.6601 is amended to read as follows:

§301.6601 STATUTORY PROVISIONS; INTEREST ON UNDERPAYMENT, NONPAYMENT OR EXTENSIONS OF TIME FOR PAYMENT, OF TAX.

SEC . 6601. INTEREST ON UNDERPAYMENT, NONPAYMENT, OR EXTENSIONS OF TIME FOR PAYMENT, OF TAX. * * *

(b) EXTENSIONS OF TIME FOR PAYMENT OF ESTATE TAX.--If the time for payment of an amount of tax imposed by chapter 11 is extended as provided in section 6161(a)(2) or 6166, or if the time for payment of an amount of such tax is postponed or extended as provided by section 6163, interest shall be paid at the rate of 4 percent, in lieu of 6 percent as provided in subsection (a).

* * * * * * *

(g) SATISFACTION BY CREDITS.--If any portion of a tax is satisfied by credit of an overpayment, then no interest shall be imposed under this section on the portion of the tax so satisfied for any period during which, if the credit had not been made interest would have been allowable with respect to such overpayment.

(h) LIMITATION ON ASSESSMENT AND COLLECTION.--Interest prescribed under this section on any tax may be assessed and collected at any time during the period within which the tax to which such interest relates may be collected.

(i) EXCEPTION AS TO ESTIMATED TAX.--This section shall not apply to any failure to pay estimated tax required by section 6153 (or section 59 of the Internal Revenue Code of 1939) or section 6154.

(j) NO INTEREST ON CERTAIN ADJUSTMENTS.--For provisions prohibiting interest on certain adjustments in tax, see section 6205(a).

[Sec. 6601 as amended by secs. 66(c), 83(a)(1), 84(a), Technical Amendments Act 1958 (72 Stat. 1658, 1663, 1664); sec. 206(e), Small Business Tax Revision Act 1958 (72 Stat. 1685)]

Sec. 83(e) [Technical Amendments Act of 1958].--Interest attributable to net operating loss carryback for certain taxable years ending in 1954.

If by reason of enactment of section 172(b)(1)(A) of the Internal Revenue Code of 1954--

(1) A deficiency resulted for the first taxable year preceding a taxable year ending after December 31, 19 53, and before August 17, 19 54, and

(2) An overpayment resulted for the second preceding taxable year,

no interest shall be payable with respect to any portion of such deficiency for any period during which there existed a corresponding amount of such overpayment with respect to which interest is not payable.

[Sec. 83(e), Technical Amendments Act 1958 (72 Stat. 1664)]

PAR . 44. Section 301.6601 -1 is amended to read as follows:

§301.6601-1 INTEREST ON UNDERPAYMENTS.

* * * * * * *

(b) Exceptions to the general rule.--(1) Satisfaction by credits made after December 31, 19 57.--If any portion of a tax is satisfied by the credit of an overpayment after December 31, 19 57, interest shall not be imposed under section 6601 on such portion of the tax for any period during which interest on the overpayment would have been allowable if the overpayment had been refunded. The provisions of this subdivision may be illustrated by the following examples:

Example (1). An examination of A's income tax returns for the calendar years 1955 and 1956 discloses an underpayment of $800 for 1955 and an overpayment of $500 for 1956. Interest under section 6601(a) ordinarily accrues on the underpayment of $800 from April 15, 19 56, to the date of payment. However, the 1956 overpayment of $500 is credited after December 31, 19 57, against the underpayment in accordance with the provisions of section 6402(a) and §301.6402-1. Under such circumstances interest on the $800 underpayment runs from April 15, 19 56, the last date prescribed for payment of the 1955 tax, to April 15, 19 57, the date the overpayment of $500 was made. Since interest would have been allowed on the overpayment, if refunded, from April 15, 19 57, to a date not more than 30 days prior to the date of the refund check, no interest is imposed after April 15, 19 57, on $500, the portion of the underpayment satisfied by credit. Interest continues to run, however, on $300 (the $800 underpayment for 1955 less the $500 overpayment for 1956) to the date of payment.

Example (2). An examination of A's income tax returns for the calendar years 1956 and 1957 discloses an overpayment, occurring on April 15, 19 57, of $700 for 1956 and an underpayment of $400 for 1957. After April 15, 19 58, the last date prescribed for payment of the 1957 tax, the district director credits $400 of the overpayment against the underpayment. In such a case, interest will accrue upon the overpayment of $700 from April 15, 19 57, to April 15, 19 58, the due date of the amount against which the credit is taken. Interest will also accrue under section 6611 upon $300 ($700 overpayment less $400 underpayment) from April 15, 19 58, to a date not more than 30 days prior to the date of the refund check. Since a refund of the portion of the overpayment credited against the underpayment would have resulted in interest running upon such portion from April 15, 19 58, to a date not more than 30 days prior to the date of the refund check, no interest is imposed upon the underpayment.

(2) Time for payment of estate tax extended or postponed.--In the case of an estate tax--

(i) If an extension of time has been granted, in accordance with section 6161(a)(2) or section 6166, for paying any portion of the tax shown on an estate tax return, or

(ii) If the time for payment of the portion of the tax attributable to a reversionary or remainder interest is extended or postponed in accordance with the provisions of section 6163, such portion shall bear interest at the rate of 4 percent per annum from the expiration of 15 months after the date of the decedent's death to the date of the expiration of the period of the extension or postponement or to the date on which payment is received, whichever is earlier. If any part of such portion is paid before the date of the expiration of the period of the extension or postponement, such part shall bear interest only to the date on which payment is received. If, however, the full amount of the tax to which the extension or postponement applies is not paid on or before the date of the expiration of the period of the extension or postponement, the unpaid amount shall bear interest at the rate of 6 percent per annum from the date of the expiration of the period of the extension or postponement to the date on which payment is received.

* * * * * * *

PAR . 45. Section 301.6611 is amended to read as follows:

§301.6611 STATUTORY PROVISIONS; INTEREST ON OVERPAYMENTS.

SEC . 6611. INTEREST ON OVERPAYMENTS. * * *

(b) PERIOD.--Such interest shall be allowed and paid as follows:

(1) CREDITS.--In the case of a credit from the date of the overpayment to the due date of the amount against which the credit is taken.

(2) REFUNDS.--In the case of a refund, from the date of the overpayment to a date (to be determined by the Secretary or his delegate) preceding the date of the refund check by not more than 30 days, whether or not such refund check is accepted by the taxpayer after tender of such check to the taxpayer. The acceptance of such check shall be without prejudice to any right of the taxpayer to claim any additional overpayment and interest thereon.

(c) [Repealed.]

* * * * * * *

(g) REFUND OF INCOME TAX CAUSED BY CARRYBACK OF FOREIGN TAXES.--For purposes of subsection (a), if any overpayment of tax results from a carryback of tax paid or accrued to foreign countries or possessions of the United States, such overpayment shall be deemed not to have been paid or accrued prior to the close of the taxable year under this subtitle in which such taxes were in fact paid or accrued.

(h) PROHIBITION OF ADMINISTRATIVE REVIEW.--For prohibition of administrative review, see section 6406.

[Sec. 6611 as amended by secs. 42(b), 83(b), (c), Technical Amendments Act 1958 (72 Stat. 1640, 1664)]

PAR . 46. Section 301.6611 -1 is amended to read as follows:

§301.6611-1 INTEREST ON OVERPAYMENTS.--(a) General rule.--Except as otherwise provided, interest shall be allowed on any overpayment of any tax at the rate of 6 percent per annum from the date of overpayment of the tax.

(b) Date of overpayment.--Except as provided in section 6401(a), relating to assessment and collection after the expiration of the applicable period of limitation, there can be no overpayment of tax until the entire tax liability has been satisfied. Therefore, the dates of overpayment of any tax are the date of payment of the first amount which (when added to previous payments) is in excess of the tax liability (including any interest, addition to the tax, or additional amount) and the dates of payment of all amounts subsequently paid with respect to such tax liability. For rules relating to the determination of the date of payment in the case of an advance payment of tax, a payment of estimated tax, and a credit for income tax withholding, see paragraph (d) of this section.

(c) Examples.--The application of paragraph (b) may be illustrated by the following examples:

Example (1). Corporation X files an income tax return on March 15, 19 55, for the calendar year 1954 disclosing a tax liability of $1,000 and elects to pay the tax in installments. Subsequent to payment of the final installment, the correct tax liability is determined to be $900.

Tax liability

Assessed ---                   $1,000

Correct liability ---             900

Overassessment ---                100

Record of payments

March 15, 19
55 ---          $500

June 15, 19
55 ---            500

Since the correct liability in this case is $900, the payment of $500 made on March 15, 19 55, and $400 of the payment made on June 15, 19 55, are applied in satisfaction of the tax liability. The balance of the payment made on June 15, 19 55 ($100) constitutes the amount of the overpayment, and the date on which such payment was made would be the date of the overpayment from which interest would be computed.

Example (2). Corporation Y files an income tax return for the calendar year 1954 on March 15, 19 55, disclosing a tax liability of $50,000, and elects to pay the tax in installments. On October 15, 19 56, a deficiency in the amount of $10,000 is assessed and is paid in equal amounts on November 15 and November 26, 19 56. On April 15, 19 57, it is determined that the correct tax liability of the taxpayer for 1954 is only $35,000.

Tax liability

Original assessment ---            $50,000

Deficiency assessment ---           10,000

Total assessed ---                  60,000

Correct liability ---               35,000

Overassessment ---                  25,000

Record of payments

March 15, 19
55 ---             $25,000

June 15, 19
55 ---               25,000

November 15, 19
56 ---            5,000

November 26, 19
56 ---            5,000

Since the correct liability in this case is $35,000, the entire payment of $25,000 made on March 15, 19 55, and $10,000 of the payment made on June 15, 19 55, are applied in satisfaction of the tax liability. The balance of the payment made on June 15, 19 55 ($15,000), plus the amounts paid on November 15 ($5,000), and November 26, 19 56 ($5,000), constitute the amount of the overpayment. The dates of the overpayments from which interest would be computed are as follows:

Date                            Amount of overpayment

June 15, 19
55 ---                               $15,000

November 15, 19
56 ---                             5,000

November 26, 19
56 ---                             5,000

The amount of any interest paid with respect to the deficiency of $10,000 is also an overpayment.

(d) Advance payment of tax, payment of estimated tax, and credit for income tax withholding.--In the case of an advance payment of tax, a payment of estimated income tax, or a credit for income tax withholding, the provisions of section 6513 (except the provisions of subsection (c) thereof), applicable in determining the date of payment of tax for purposes of the period of limitations on credit or refund, shall apply in determining the date of overpayment for purposes of computing interest thereon.

(e) Refund of income tax caused by carryback.--If any overpayment of tax imposed by subtitle A results from a carryback of a net operating loss, such overpayment, for purposes of this section, shall be deemed not to have been made prior to the end of the taxable year in which such loss occurs.

(f) Refund of income tax caused by carryback of foreign taxes.--For purposes of paragraph (a) of this section, any overpayment of tax resulting from a carryback of tax paid or accrued to foreign countries or possessions of the United States shall be deemed not to have been paid or accrued before the close of the taxable year under subtitle F of the Internal Revenue Code of 1954 in which such taxes were in fact paid or accrued.

(g) Period for which interest allowable in case of refunds.--If an overpayment of tax is refunded, interest shall be allowed from the date of the overpayment to a date determined by the district director, which shall be not more than 30 days prior to the date of the refund check. The acceptance of a refund check shall not deprive the taxpayer of the right to make a claim for any additional overpayment and interest thereon, provided the claim is made within the applicable period of limitation. However, if a taxpayer does not accept a refund check, no additional interest on the amount of the overpayment included in such check shall be allowed.

(h) Period for which interest allowable in case of credits.--(1) General rule.--If an overpayment of tax is credited, interest shall be allowed from the date of overpayment to the due date (as determined under subparagraph (2) of this paragraph) of the amount against which such overpayment is credited.

(2) Determination of due date.--(i) In general.--The term "due date", as used in this section, means the last day fixed by law or regulations for the payment of the tax (determined without regard to any extension of time), and not the date on which the district director makes demand for the payment of the tax. Therefore, the due date of a tax (other than an additional assessment subject to the special rule provided by subdivision (iv) of this subparagraph) is the date fixed for the payment of the tax or the several installments thereof.

(ii) Tax payable in installments.--(a) In general.--In the case of a credit against a tax, where the taxpayer had properly elected to pay the tax in installments, the due date is the date prescribed for the payment of the installment against which the credit is applied.

(b) Delinquent installment.--If the taxpayer is delinquent in payment of an installment of tax and the district director has issued a notice and demand for the payment of the delinquent installment and the remaining installments, the due date of each remaining installment shall then be the date of such notice and demand.

(iii) Tax or installment not yet due.--If a taxpayer agrees to the crediting of an overpayment against tax or an installment of tax and the schedule of allowance is signed prior to the date on which such tax or installment would otherwise become due, then the due date of such tax or installment shall be the date on which such schedule is signed.

(iv) Additional assessment satisfied by credit before January 1, 19 58.--In the case of a credit made before January 1, 19 58, against an additional assessment, the due date of the tax satisfied by the credit is the date the additional assessment was made. For purposes of this subdivision, the term "additional assessment" means a further assessment of a tax of the same character previously paid in part, and includes the assessment of a deficiency as defined in section 6211.

(v) Assessed interest.--In the case of a credit against assessed interest, the due date is the date of the assessment of such interest.

(vi) Additional amount, addition to the tax, or assessable penalty.--In the case of a credit against an amount assessed as an additional amount, addition to the tax, or assessable penalty, the due date is the date of the assessment.

(vii) Estimated income tax for succeeding year.--If the taxpayer elects to have all or part of the overpayment shown by his return applied to his estimated tax for his succeeding taxable year, no interest shall be allowed on such portion of the overpayment credited and such amount shall be applied as a payment on account of the estimated tax for such year or the installments thereof.

(i) [Reserved.]

(j) Refund within 45 days.--If an overpayment of tax imposed by subtitle A is refunded within 45 days after the last date prescribed for filing the return of such tax (determined without regard to any extension of time for filing the return), no interest shall be allowed on such overpayment.

PAR . 47. Section 301.6652 is amended to read as follows:

§301.6652 STATUTORY PROVISIONS; FAILURE TO FILE CERTAIN INFORMATION RETURNS.

SEC . 6652. FAILURE TO FILE CERTAIN INFORMATION RETURNS.

(a) ADDITIONAL AMOUNT.--In the case of each failure to file a statement of a payment to another person, required under authority of section 6041 (relating to information at source), section 6042(1) (relating to payments of corporate dividends), section 6044 (relating to patronage dividends), or section 6051(d) (relating to information returns with respect to income tax withheld), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid (upon notice and demand by the Secretary or his delegate and in the same manner as tax, by the person failing to so file the statement, $1 for each such statement not so filed, but the total amount imposed on the delinquent person for all such failures during any calendar year shall not exceed $1,000.

* * * * * * *

[Sec. 6652 as amended by sec. 85, Technical Amendments Act 1958 (72 Stat. 1664)]

PAR . 48. Section 301.6652 -1 is amended to read as follows:

§301.6652-1 FAILURE TO FILE CERTAIN INFORMATION RETURNS.--(a) Additional amount.--(1) In general.--In case of each failure to file a statement, with respect to a payment to another person, required under authority of--

(i) Section 6041, relating to information at source,

(ii) Section 6042(1), relating to payments of corporate dividends,

(iii) Section 6044, relating to patronage dividends, or

(iv) Section 6051(d), relating to information returns with respect to income tax withheld or the employee tax under the Federal Insurance Contributions Act,

and the regulations under such sections, within the time prescribed for filing such statement (determined with regard to any extension of time for filing), there shall be paid by the person who failed to file such statement $1 for each such statement not filed. However, the total amount imposed on the delinquent person for all such failures during any calendar year shall not exceed $1,000. The additional amount imposed for such failures shall be paid in the same manner as tax upon notice and demand by the district director.

* * * * * * *

PAR . 49. Section 301.6653 is amended to read as follows:

§301.6653 STATUTORY PROVISIONS; FAILURE TO PAY TAX.

SEC . 6653. FAILURE TO PAY TAX. * * *

(c) DEFINITION OF UNDERPAYMENT. * * *

(1) INCOME, ESTATE, AND GIFT TAXES.--In the case of a tax to which section 6211 (relating to income, estate, and gift taxes) is applicable, a deficiency as defined in that section (except that, for this purpose the tax shown on a return referred to in section 6211(a)(1)(A) shall be taken into account only if such return was filed on or before the last day prescribed for the filing of such return, determined with regard to any extension of time for such filing), and

* * * * * * *

[Sec. 6653 as amended by sec. 86, Technical Amendments Act 1958 (72 Stat. 1665)]

PAR . 50. Section 301.6851 is amended to read as follows:

§301.6851 STATUTORY PROVISIONS; TERMINATION OF TAXABLE YEAR.

SEC . 6851. TERMINATION OF TAXABLE YEAR. * * *

(d) DEPARTURE OF ALIEN.--Subject to such exceptions as may, by regulations, be prescribed by the Secretary or his delegate--

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

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

* * * * * * *

[Sec. 6851 as amended by sec. 87, Technical Amendments Act 1958 (72 Stat. 1665)]

PAR . 51. Section 301.6871 (a) is amended to read as follows:

§301.6871 (a) STATUTORY PROVISIONS; CLAIMS FOR INCOME, ESTATE, AND GIFT TAXES IN BANKRUPTCY AND RECEIVERSHIP PROCEEDINGS.

SEC . 6871. CLAIMS FOR INCOME, ESTATE, AND GIFT TAXES IN BANKRUPTCY AND RECEIVERSHIP PROCEEDINGS.

(a) IMMEDIATE ASSESSMENT.--Upon the adjudication of bankruptcy of any taxpayer in any liquidating proceeding, the filing or (where approval is required by the Bankruptcy Act) the approval of a petition of, or the approval of a petition against, any taxpayer in any other bankruptcy proceeding, or the appointment of a receiver for any taxpayer in any receivership proceeding before any court of the United States or of any State or Territory or of the District of Columbia, any deficiency (together with all interest, additional amounts, or additions to the tax provided by law) determined by the Secretary or his delegate in respect of a tax imposed by subtitle A or B upon such taxpayer shall, despite the restrictions imposed by section 6213(a) upon assessments, be immediately assessed if such deficiency has not theretofore been assessed in accordance with law.

[Sec. 6871(a) as amended by sec. 88(a), Technical Amendments Act 1958 (72 Stat. 1665)]

PAR . 52. Section 301.6871 (a)-1 is amended to read as follows:

§301.6871 (a)-1 IMMEDIATE ASSESSMENT OF CLAIMS FOR INCOME, ESTATE, AND GIFT TAXES IN BANKRUPTCY AND RECEIVERSHIP PROCEEDINGS.--(a) Upon (1) the adjudication of bankruptcy of any taxpayer in any liquidating proceeding, (2) the filing with a court of competent jurisdiction or (where approval is required by the Bankruptcy Act) the approval of a petition of, or the approval of a petition against, any taxpayer in any other proceeding under the Bankruptcy Act, or (3) the appointment of any receiver for any taxpayer in a receivership proceeding before any court of the United States or of any State or Territory or of the District of Columbia, the district director shall immediately assess any deficiency of income, estate, or gift tax (together with all interest, additional amounts, or additions to the tax provided by law), determined by him, if such deficiency has not heretofore been assessed in accordance with law. Such assessment shall be made immediately, whether or not a notice of deficiency has been issued, and without regard to the restrictions upon assessments under section 6213.

(b) As used in this section and §§ 301.6871 (a)-2 to 301.6873 -1, inclusive, the term "proceeding under the Bankruptcy Act" includes a proceeding under chapters I to VII , inclusive, of the Bankruptcy Act (11 U.S.C. cc. I- VII ), or under section 75 or 77, or chapters X to XIII, inclusive, of such act, or any other proceeding under the act.

PAR . 53. Section 301.6871 (b) is amended to read as follows:

§301.6871 (b) STATUTORY PROVISIONS; CLAIMS FOR INCOME, ESTATE, AND GIFT TAXES IN BANKRUPTCY AND RECEIVERSHIP PROCEEDINGS.

SEC . 6871. CLAIMS FOR INCOME, ESTATE, AND GIFT TAXES IN BANKRUPTCY AND RECEIVERSHIP PROCEEDINGS. * * *

(b) CLAIM FILED DESPITE PENDENCY OF TAX COURT PROCEEDINGS.--In the case of a tax imposed by subtitle A or B claims for the deficiency and such interest, additional amounts, and additions to the tax may be presented, for adjudication in accordance with law, to the court before which the bankruptcy or receivership proceeding is pending, despite the pendency of proceedings for the redetermination of the deficiency in pursuance of a petition to the Tax Court; but no petition for any such redetermination shall be filed with the Tax Court after the adjudication of bankruptcy, the filing or (where approval is required by the Bankruptcy Act) the approval of a petition of, or the approval of a petition against, any taxpayer in any other bankruptcy proceeding, or the appointment of the receiver.

[Sec. 6871(b) as amended by sec. 88(b), Technical Amendments Act 1958 (72 Stat. 1665)]

PAR . 54. Section 301.6871 (b)-1 is amended to read as follows:

§301.6871 (b)-1 CLAIMS FOR INCOME, ESTATE, AND GIFT TAXES IN PROCEEDINGS UNDER THE BANRUPTCY ACT AND RECEIVERSHIP PROCEEDINGS; CLAIM FILED DESPITE PENDENCY OF TAX COURT PROCEEDINGS.--(a) If it is determined that a deficiency is due in respect of income, estate, or gift tax and the taxpayer has filed a petition with the Tax Court before (1) the adjudication of bankruptcy in any liquidating proceeding, (2) the filing with a court of competent jurisdiction or (where approval is required by the Bankruptcy Act) the approval of a petition of, or the approval of a petition against, any taxpayer in any other proceeding under the Bankruptcy Act, or (3) the appointment of a receiver, the trustee, receiver, debtor in possession, or other like fiduciary, may, upon his own motion, be made a party to the Tax Court proceeding and thereafter may prosecute the appeal before the Tax Court as to that particular determination. No petition shall be filed with the Tax Court for a redetermination of the deficiency after the adjudication of bankruptcy, the filing or (where approval is required by the Bankruptcy Act) the approval of a petition of, or the approval of a petition against, any taxpayer in any other bankruptcy proceeding, or the appointment of the receiver.

* * * * * * *

(c) While a district director is required by section 6871(a) and paragraph (a) of §301.6871(a)-1 to make immediate assessment of any deficiency, such assessment is not made as a jeopardy assessment within the meaning of section 6861, and consequently the provisions of that section do not apply to any assessment made under section 6871. Therefore, the notice of deficiency provided in section 6861(b) will not be mailed. Although such notice will not be issued, a letter will be sent to the taxpayer or to the trustee, receiver, debtor in possession, or other like fiduciary, notifying him in detail how the deficiency was computed, that he may furnish evidence showing wherein the deficiency is incorrect, and that upon request he will be granted a conference by the district director with respect to such deficiency. However, such letter will not provide for such a conference where a petition was filed with the Tax Court before (1) the adjudication of bankruptcy in a liquidating proceeding, (2) the filing with a court of competent jurisdiction or (where approval is required by the Bankruptcy Act), the approval of a petition of, or the approval of a petition against, any taxpayer in any other proceeding under the Bankruptcy Act, or (3) the appointment of a receiver.

Because this Treasury Decision makes only technical and procedural changes, it is hereby found that it is unnecessary to issue this Treasury Decision with notice and public procedure thereon under section 4(a) of the Administrative Procedure Act, approved June 11, 19 46, or subject to the effective date limitation of section 4(c) of that Act.

(This Treasury Decision is issued under the authority contained in section 7805 of the Internal Revenue Code of 1954 (68A Stat. 917; 26 U.S.C. 7805).)

DANA LATHAM,
Commissioner of Internal Revenue.

Approved November 5, 19 59.