26 U.S.C. § 4251 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 33 / Section 4251: Imposition of tax
Imposition of tax
Status: in_force

(a) Tax imposed

(1) In general

There is hereby imposed on amounts paid for communications services a tax equal to the applicable percentage of amounts so paid.

(2) Payment of tax

The tax imposed by this section shall be paid by the person paying for such services.

(b) Definitions

For purposes of subsection (a)—

(1) Communications services

The term "communications services" means—

(A) local telephone service;

(B) toll telephone service; and

(C) teletypewriter exchange service.

(2) Applicable percentage

The term "applicable percentage" means 3 percent.

(c) Special rule

For purposes of subsections (a) and (b), in the case of communications services rendered before November 1 of a calendar year for which a bill has not been rendered before the close of such year, a bill shall be treated as having been first rendered on December 31 of such year.

(d) Treatment of prepaid telephone cards

(1) In general

For purposes of this subchapter, in the case of communications services acquired by means of a prepaid telephone card—

(A) the face amount of such card shall be treated as the amount paid for such communications services, and

(B) that amount shall be treated as paid when the card is transferred by any telecommunications carrier to any person who is not such a carrier.

(2) Determination of face amount in absence of specified dollar amount

In the case of any prepaid telephone card which entitles the user other than to a specified dollar amount of use, the face amount shall be determined under regulations prescribed by the Secretary.

(3) Prepaid telephone card

For purposes of this subsection, the term "prepaid telephone card" means any card or any other similar arrangement which permits its holder to obtain communications services and pay for such services in advance.

(Aug. 16, 1954, ch. 736, 68A Stat. 503; Pub. L. 85–859, title I, §133(a), Sept. 2, 1958, 72 Stat. 1289; Pub. L. 86–75, §5, June 30, 1959, 73 Stat. 158; Pub. L. 86–564, title II, §202(a)(2), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, §3(a)(2), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, §3(a)(2), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, §3(a)(2), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, §2(a)(2), June 30, 1964, 78 Stat. 237; Pub. L. 89–44, title III, §302, title VII, §701(b)(2)(B), June 21, 1965, 79 Stat. 145, 156; Pub. L. 89–368, title II, §202(a), Mar. 15, 1966, 80 Stat. 66; Pub. L. 90–285, §1(a)(3), Apr. 12, 1968, 82 Stat. 92; Pub. L. 90–364, title I, §105(b)(1), (2), June 28, 1968, 82 Stat. 265; Pub. L. 91–172, title VII, §702(b)(1), (2), Dec. 30, 1969, 83 Stat. 660; Pub. L. 91–614, title II, §201(b)(1), (2), Dec. 31, 1970, 84 Stat. 1843; Pub. L. 96–499, title XI, §1151, Dec. 5, 1980, 94 Stat. 2694; Pub. L. 97–34, title VIII, §821, Aug. 13, 1981, 95 Stat. 351; Pub. L. 97–248, title II, §282(a), Sept. 3, 1982, 96 Stat. 568; Pub. L. 98–369, div. A, title I, §26, July 18, 1984, 98 Stat. 507; Pub. L. 99–514, title XVIII, §1801(b), Oct. 22, 1986, 100 Stat. 2785; Pub. L. 100–203, title X, §10501, Dec. 22, 1987, 101 Stat. 1330–438; Pub. L. 101–508, title XI, §11217(a), Nov. 5, 1990, 104 Stat. 1388–437; Pub. L. 105–34, title X, §1034(a), Aug. 5, 1997, 111 Stat. 937; Pub. L. 105–206, title VI, §6010(i), July 22, 1998, 112 Stat. 815.)

Editorial Notes

Codification

This subchapter, relating to the tax on communications, was repealed by Pub. L. 90–364, title I, §105(b)(3), June 28, 1968, 82 Stat. 266, as amended by Pub. L. 91–172, title VII, §702(b)(3), Dec. 30, 1969, 83 Stat. 660; Pub. L. 91–614, title II, §201(b)(3), Dec. 31, 1970, 84 Stat. 1843, effective with respect to amounts paid pursuant to bills first rendered on or after Jan. 1, 1982. In the case of communications services rendered before Nov. 1, 1981, for which a bill has not been rendered before Jan. 1, 1982, a bill shall be treated as having been first rendered on Dec. 31, 1981.

Pub. L. 96–499, title XI, §1151, Dec. 5, 1980, 94 Stat. 2694; Pub. L. 97–34, title VIII, §821, Aug. 13, 1981, 95 Stat. 351; Pub. L. 97–248, title II, §282(a), Sept. 3, 1982, 96 Stat. 568; Pub. L. 98–369, div. A, title I, §26, July 18, 1984, 98 Stat. 507; Pub. L. 99–514, title XVIII, §1801(b), Oct. 22, 1986, 100 Stat. 2785; Pub. L. 100–203, title X, §10501, Dec. 22, 1987, 101 Stat. 1330–438; Pub. L. 101–508, title XI, §11217(a), Nov. 5, 1990, 104 Stat. 1388–437, amended this section, relating to the imposition of the tax on communications, extending the date in (and finally eliminating) provisions which had reduced the tax to zero after a specified date, without amending Pub. L. 90–364, title I, §105(b)(3), June 28, 1968, 82 Stat. 266, which, as amended, had repealed this subchapter, effective with respect to amounts paid pursuant to bills first rendered on or after Jan. 1, 1982.

Amendments

1998—Subsec. (d)(3). Pub. L. 105–206 substituted "any other similar arrangement" for "other similar arrangement".

1997—Subsec. (d). Pub. L. 105–34 added subsec. (d).

1990—Subsec. (b)(2). Pub. L. 101–508 substituted "percent." for "percent; except that, with respect to amounts paid pursuant to bills first rendered after 1990, the applicable percentage shall be zero."

1987—Subsec. (b)(2). Pub. L. 100–203 amended par. (2) generally. Prior to amendment, par. (2) read as follows: "The term 'applicable percentage' means—

 

"With respect to amount paid pursuant to
 bills first rendered:
The percentage is:

During 1983, 1984, 1985, 1986, or 1987 
3  

During 1988 or thereafter 
0."

1986—Subsec. (b)(2). Pub. L. 99–514 inserted "1985," after "1984," in table.

1984—Subsec. (b)(2). Pub. L. 98–369 substituted "During 1983, 1984, 1986, or 1987" for "During 1983, 1984, or 1985" in item relating to an applicable percentage of 3 and substituted "During 1988 or thereafter" for "During 1986 or thereafter" in item relating to an applicable percentage of 0.

1982—Subsec. (a). Pub. L. 97–248 added subsec. (a) and struck out former subsec. (a) which provided that there was a tax on communication services specified as local telephone service, toll telephone service, and teletypewriter exchange service, directed that the tax was to be paid by the person paying for such services, and designated the tax as the percentage of the amount paid for the services as set out in the following table:

 

"Amounts paid pursuant to bills first rendered—Percent—

Before January 1, 1973
10  

During 1973
9  

During 1974
8  

During 1975
7  

During 1976
6  

During 1977
5  

During 1978
4  

During 1979
3  

During 1980 or 1981
2  

During 1982, 1983, or 1984
1"

Subsec. (b). Pub. L. 97–248 added subsec. (b) and struck out former subsec. (b) which provided that the tax imposed by former subsec. (a) would not apply to amounts paid pursuant to bills first rendered on or after January 1, 1985.

1981—Subsec. (a)(2). Pub. L. 97–34, §821(a), substituted "During 1982, 1983, or 1984" for "During 1982" in table.

Subsec. (b). Pub. L. 97–34, §821(b), extended termination date to Jan. 1, 1985, from Jan. 1, 1983.

1980—Subsec. (a)(2). Pub. L. 96–499, §1151(a), substituted "During 1980 or 1981" for "During 1980" and "During 1982" for "During 1981" in table.

Subsec. (b). Pub. L. 96–499, §1151(b), substituted "1983" for "1982".

1970—Subsec. (a)(2). Pub. L. 91–614, §201(b)(1), substituted provisions providing the rate of tax on amounts paid for communication services pursuant to bills first rendered before Jan. 1, 1973 is 10% of such amount, amounts paid pursuant to bills first rendered during 1973 is 9% of such amount, during 1974 is 8% of such amount, during 1975 is 7% of such amount, during 1976 is 6% of such amount, during 1977 is 5% of such amount, during 1978 is 4% of such amount, during 1979 is 3% of such amount, during 1980 is 2% of such amount, and during 1981 is 1% of such amount for provisions providing the rate of tax on amounts paid for communication services pursuant to bills first rendered before Jan. 1, 1971 is 10% of such amount, amounts paid pursuant to bills first rendered during 1971 is 5% of such amount, during 1972 is 3% of such amount, and during 1973 is 1% of such amount.

Subsec. (b). Pub. L. 91–614, §201(b)(2), substituted "January 1, 1982" for "January 1, 1974".

1969—Subsec. (a)(2). Pub. L. 91–172, §702(b)(1), increased rate of tax on amounts paid for communication services from 5 to 10 percent during 1970, from 3 to 5 percent during 1971, from 1 to 3 percent during 1972, and imposed a 1 percent tax on amounts paid for communication services during 1973.

Subsec. (b). Pub. L. 91–172, §702(b)(2), substituted "January 1, 1974" for "January 1, 1973".

1968—Subsec. (a)(2). Pub. L. 90–364, §105(b)(1), extended from April 30, 1968, through the end of 1969 the period for the imposition of the 10 percent rate, thereby increasing the rate from 1 percent to 10 percent for the period May 1, 1968, through the end of 1968 and from 0 percent to 10 percent for 1969, and imposed a rate of 5 percent during 1970, a rate of 3 percent during 1971, and a rate of 1 percent during 1972.

Pub. L. 90–285 substituted "April 30, 1968" and "May 1, 1968" for "March 31, 1968" and "April 1, 1968" respectively.

Subsec. (b). Pub. L. 90–364, §105(b)(2), substituted "1973" for "1969".

Subsec. (c). Pub. L. 90–364, §105(b)(2), extended provisions calling for treatment of bills not rendered before the end of a year for service rendered before November 1 of that year as having been first rendered on December 31 of that year so as to include years subsequent to 1968 and struck out special provision for the application of subsec. (a) in the case of communication services rendered before March 1, 1968, for which a bill was not rendered before May 1, 1968.

Pub. L. 90–285 substituted "March 1, 1968," for "February 1, 1968", "May 1, 1968" for "April 1, 1968", "April 30, 1968" for "March 31, 1968", and "February 29, 1968" for "January 31, 1968".

1966—Subsec. (a)(2). Pub. L. 89–368, §202(a)(1), increased to 10 percent the schedule of rates for tax imposed for the period up to April 1, 1968, and authorized a reduction to 1 percent for the period after March 31, 1968, and before January 1, 1969.

Subsec. (c). Pub. L. 89–368, §202(a)(2), conformed subsection to rate reduction schedule alterations by providing that, in the case of communications services rendered before February 1, 1968, for which a bill has not been rendered before April 1, 1968, the bill shall be treated as having been first rendered on March 31, 1968, and, in the case of services rendered after January 31, 1968, and before November 1, 1968, for which a bill has not been rendered before January 1, 1969, the bill shall be treated as having first been rendered on December 31, 1968.

1965—Subsec. (a). Pub. L. 89–44, §302, substituted local telephone service, toll telephone service, and teletypewriter exchange service, for general telephone service, toll telephone service, telegraph service, teletypewriter exchange service, wire mileage service, and wire and equipment service as the taxed services and reduced the rate of tax to 3 percent during 1966, 2 percent during 1967, and 1 percent during 1968.

Subsec. (b). Pub. L. 89–44, §302, added subsec. (b). Pub. L. 89–44, §701(b)(2)(B), repealed former subsec. (b), as in effect June 30, 1965, effective on and after July 1, 1965. Such repealed provision had called for termination of the tax on general telephone service as of July 1, 1965.

Subsec. (c). Pub. L. 89–44, §302, added subsec. (c).

1964—Subsec. (b)(2). Pub. L. 88–348 substituted "July 1, 1965" for "July 1, 1964" in two places.

1963—Subsec. (b)(2). Pub. L. 88–52 substituted "July 1, 1964" for "July 1, 1963" in two places.

1962—Subsec. (b)(2). Pub. L. 87–508 substituted "July 1, 1963" for "July 1, 1962" in two places.

1961—Subsec. (b)(2). Pub. L. 87–72 substituted "July 1, 1962" for "July 1, 1961" in two places.

1960—Subsec. (b)(2). Pub. L. 86–564 substituted "July 1, 1961" for "July 1, 1960" in two places.

1959—Pub. L. 86–75 designated former provisions as subsec. (a) and added subsec. (b).

1958—Pub. L. 85–859 redesignated "local telephone service" as "general telephone service", "long distance telephone service" as "toll telephone service" and "leased wire, teletypewriter or talking circuit special service" as "teletypewriter exchange service" and "wire mileage service".

Statutory Notes and Related Subsidiaries

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1997 Amendment

Pub. L. 105–34, title X, §1034(b), Aug. 5, 1997, 111 Stat. 937, provided that: "The amendments made by this section [amending this section] shall apply to amounts paid in calendar months beginning more than 60 days after the date of the enactment of this Act [Aug. 5, 1997]."

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date of 1982 Amendment

Pub. L. 97–248, title II, §282(b), Sept. 3, 1982, 96 Stat. 568, provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to amounts paid for communications services pursuant to bills first rendered after December 31, 1982."

Effective Date of 1968 Amendments

Amendment by Pub. L. 90–364 effective Apr. 30, 1968, see section 105(c) of Pub. L. 90–364, set out as a note under section 6412 of this title.

Amendment by Pub. L. 90–285 effective Mar. 31, 1968, see section 1(b) of Pub. L. 90–285, set out as a note under section 6412 of this title.

Effective Date of 1966 Amendment

Pub. L. 89–368, title II, §202(c), Mar. 15, 1966, 80 Stat. 66, provided that: "The amendments made by subsections (a) [amending this section] and (b) [amending section 4253 of this title] shall apply to amounts paid pursuant to bills first rendered on or after April 1, 1966, for services rendered on or after such date. In the case of amounts paid pursuant to bills rendered on or after such date for services which were rendered before such date and for which no previous bill was rendered, such amendments shall apply except with respect to such services as were rendered more than 2 months before such date. In the case of services rendered more than 2 months before such date, the provisions of subchapter B of chapter 33 of the Code in effect at the time such services were rendered, subject to the provision of section 701(b)(2) of the Excise Tax Reduction Act of 1965 [see Effective Date of 1965 Amendment note below], shall apply to the amounts paid for such services."

Effective Date of 1965 Amendment

Pub. L. 89–44, title VII, §701(b)(2)(A), June 21, 1965, 79 Stat. 156, provided that: "The amendments made by section 302 [amending this section and sections 4252, 4253, and 4254 of this title] (relating to communication services) shall apply to amounts paid pursuant to bills rendered on or after January 1, 1966, for services rendered on or after such date. In the case of amounts paid pursuant to bills rendered on or after January 1, 1966, for services which were rendered before such date and for which no previous bill was rendered, such amendments shall apply except with respect to such services as were rendered more than 2 months before such date. In the case of services rendered more than 2 months before such date, the provisions of subchapter B of chapter 33 of the Code in effect at the time such services were rendered shall apply to the amounts paid for such services."

Effective Date of 1958 Amendment

Pub. L. 85–859, title I, §133(b), Sept. 2, 1958, 72 Stat. 1292, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(1) Subject to the provisions of paragraph (2), the amendment made by subsection (a) [amending this section and sections 4252 to 4254 of this title] shall apply with respect to amounts paid on or after the effective date prescribed in section (1)(c) of this Act for services rendered on or after such date.

"(2) The amendment made by subsection (a) [amending this section and sections 4252 to 4254 of this title] shall not apply with respect to amounts paid pursuant to bills rendered before the effective date prescribed in section 1(c) of this Act. In the case of amounts paid pursuant to bills rendered on or after such date for services for which no previous bill was rendered, such amendments shall apply except with respect to such services as were rendered more than 2 months before such date. In the case of services rendered more than 2 months before such date the provisions of subchapter B of chapter 33 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] in effect at the time such services were rendered shall apply to the amounts paid for such services."

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.
26 U.S.C. § 6050E (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 61 / Section 6050E: State and local income tax refunds
State and local income tax refunds
Status: in_force

(a) Requirement of reporting

Every person who, with respect to any individual, during any calendar year makes payments of refunds of State or local income taxes (or allows credits or offsets with respect to such taxes) aggregating $10 or more shall make a return according to forms or regulations prescribed by the Secretary setting forth the aggregate amount of such payments, credits, or offsets, and the name and address of the individual with respect to whom such payment, credit, or offset was made.

(b) Statements to be furnished to individuals with respect to whom information is required

Every person required to make a return under subsection (a) shall furnish to each individual whose name is required to be set forth in such return a written statement showing—

(1) the name of the State or political subdivision thereof, and

(2) the information required to be shown on the return with respect to refunds, credits, and offsets to the individual.

The written statement required under the preceding sentence shall be furnished to the individual during January of the calendar year following the calendar year for which the return under subsection (a) was required to be made. No statement shall be required under this subsection with respect to any individual if it is determined (in the manner provided by regulations) that such individual did not claim itemized deductions under chapter 1 for the taxable year giving rise to the refund, credit, or offset.

(c) Person defined

For purposes of this section, the term "person" means the officer or employee having control of the payment of the refunds (or the allowance of the credits or offsets) or the person appropriately designated for purposes of this section.

(Added Pub. L. 97–248, title III, §313(a), Sept. 3, 1982, 96 Stat. 603; amended Pub. L. 98–369, div. A, title I, §151(a), July 18, 1984, 98 Stat. 690; Pub. L. 99–514, title XV, §1501(c)(8), Oct. 22, 1986, 100 Stat. 2738.)

Editorial Notes

Amendments

1986—Subsec. (b). Pub. L. 99–514, in amending subsec. (b) generally, substituted "information is required" for "information is furnished" in heading and, in text, substituted references to persons required to make a return for former references to persons making a return and references to persons whose name is required to be set forth for former references to persons whose name is set forth.

1984—Subsec. (b). Pub. L. 98–369 inserted provision that no statement is required under this subsection with respect to any individual if it is determined (in the manner provided by regulations) that such individual did not claim itemized deductions under chapter 1 for the taxable year giving rise to the refund, credit, or offset.

Statutory Notes and Related Subsidiaries

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–514 applicable to returns the due date for which (determined without regard to extensions) is after Dec. 31, 1986, see section 1501(e) of Pub. L. 99–514, set out as an Effective Date note under section 6721 of this title.

Effective Date of 1984 Amendment

Pub. L. 98–369, div. A, title I, §151(b), July 18, 1984, 98 Stat. 691, provided that: "The amendment made by subsection (a) [amending this section] shall apply to payments of refunds, and credits and offsets made, after December 31, 1982."

Effective Date

Pub. L. 97–248, title III, §313(c), Sept. 3, 1982, 96 Stat. 603, provided that: "The amendments made by this section [enacting this section] shall apply to payments of refunds, and credits and offsets made, after December 31, 1982."
26 U.S.C. § 6652 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 68 / Section 6652: Failure to file certain information returns, registration statements, etc.
Failure to file certain information returns, registration statements, etc.
Status: in_force

(a) Returns with respect to certain payments aggregating less than $10

In the case of each failure to file a statement of a payment to another person required under the authority of—

(1) section 6042(a)(2) (relating to payments of dividends aggregating less than $10), or

(2) section 6044(a)(2) (relating to payments of patronage dividends aggregating less than $10),

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 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 the calendar year shall not exceed $1,000.

(b) Failure to report tips

In the case of failure by an employee to report to his employer on the date and in the manner prescribed therefor any amount of tips required to be so reported by section 6053(a) which are wages (as defined in section 3121(a)) or which are compensation (as defined in section 3231(e)), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be paid by the employee, in addition to the tax imposed by section 3101 or section 3201 (as the case may be) with respect to the amount of tips which he so failed to report, an amount equal to 50 percent of such tax.

(c) Returns by exempt organizations and by certain trusts

(1) Annual returns under section 6033(a)(1) or 6012(a)(6)

(A) Penalty on organization

In the case of—

(i) a failure to file a return required under section 6033(a)(1) (relating to returns by exempt organizations) or section 6012(a)(6) (relating to returns by political organizations) on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), or

(ii) a failure to include any of the information required to be shown on a return filed under section 6033(a)(1) or section 6012(a)(6) or to show the correct information,

there shall be paid by the exempt organization $20 for each day during which such failure continues. The maximum penalty under this subparagraph on failures with respect to any 1 return shall not exceed the lesser of $10,000 or 5 percent of the gross receipts of the organization for the year. In the case of an organization having gross receipts exceeding $1,000,000 for any year, with respect to the return required under section 6033(a)(1) or section 6012(a)(6) for such year, in applying the first sentence of this subparagraph, the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and, in lieu of applying the second sentence of this subparagraph, the maximum penalty under this subparagraph shall not exceed $50,000.

(B) Managers

(i) In general

The Secretary may make a written demand on any organization subject to penalty under subparagraph (A) specifying therein a reasonable future date by which the return shall be filed (or the information furnished) for purposes of this subparagraph.

(ii) Failure to comply with demand

If any person fails to comply with any demand under clause (i) on or before the date specified in such demand, there shall be paid by the person failing to so comply $10 for each day after the expiration of the time specified in such demand during which such failure continues. The maximum penalty imposed under this subparagraph on all persons for failures with respect to any 1 return shall not exceed $5,000.

(C) Public inspection of annual returns and reports

In the case of a failure to comply with the requirements of section 6104(d) with respect to any annual return on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing) or report required under section 527(j), there shall be paid by the person failing to meet such requirements $20 for each day during which such failure continues. The maximum penalty imposed under this subparagraph on all persons for failures with respect to any 1 return or report shall not exceed $10,000.

(D) Public inspection of applications for exemption and notice of status

In the case of a failure to comply with the requirements of section 6104(d) with respect to any exempt status application materials (as defined in such section) or notice materials (as defined in such section) on the date and in the manner prescribed therefor, there shall be paid by the person failing to meet such requirements $20 for each day during which such failure continues.

(E) No penalty for certain annual notices

This paragraph shall not apply with respect to any notice required under section 6033(i).

(2) Returns under section 6034 or 6043(b)

(A) Penalty on organization or trust

In the case of a failure to file a return required under section 6034 (relating to returns by certain trusts) or section 6043(b) (relating to terminations, etc., of exempt organizations), on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), there shall be paid by the exempt organization or trust failing so to file $10 for each day during which such failure continues, but the total amount imposed under this subparagraph on any organization or trust for failure to file any 1 return shall not exceed $5,000.

(B) Managers

The Secretary may make written demand on an organization or trust failing to file under subparagraph (A) specifying therein a reasonable future date by which such filing shall be made for purposes of this subparagraph. If such filing is not made on or before such date, there shall be paid by the person failing so to file $10 for each day after the expiration of the time specified in the written demand during which such failure continues, but the total amount imposed under this subparagraph on all persons for failure to file any 1 return shall not exceed $5,000.

(C) Split-interest trusts

In the case of a trust which is required to file a return under section 6034(a), subparagraphs (A) and (B) of this paragraph shall not apply and paragraph (1) shall apply in the same manner as if such return were required under section 6033, except that—

(i) the 5 percent limitation in the second sentence of paragraph (1)(A) shall not apply,

(ii) in the case of any trust with gross income in excess of $250,000, in applying the first sentence of paragraph (1)(A), the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and in lieu of applying the second sentence of paragraph (1)(A), the maximum penalty under paragraph (1)(A) shall not exceed $50,000, and

(iii) the third sentence of paragraph (1)(A) shall be disregarded.

In addition to any penalty imposed on the trust pursuant to this subparagraph, if the person required to file such return knowingly fails to file the return, such penalty shall also be imposed on such person who shall be personally liable for such penalty.

(3) Disclosure under section 6033(a)(2)

(A) Penalty on entities

In the case of a failure to file a disclosure required under section 6033(a)(2), there shall be paid by the tax-exempt entity (the entity manager in the case of a tax-exempt entity described in paragraph (4), (5), (6), or (7) of section 4965(c)) $100 for each day during which such failure continues. The maximum penalty under this subparagraph on failures with respect to any 1 disclosure shall not exceed $50,000.

(B) Written demand

(i) In general

The Secretary may make a written demand on any entity or manager subject to penalty under subparagraph (A) specifying therein a reasonable future date by which the disclosure shall be filed for purposes of this subparagraph.

(ii) Failure to comply with demand

If any entity or manager fails to comply with any demand under clause (i) on or before the date specified in such demand, there shall be paid by such entity or manager failing to so comply $100 for each day after the expiration of the time specified in such demand during which such failure continues. The maximum penalty imposed under this subparagraph on all entities and managers for failures with respect to any 1 disclosure shall not exceed $10,000.

(C) Definitions

Any term used in this section which is also used in section 4965 shall have the meaning given such term under section 4965.

(4) Notices under section 506

(A) Penalty on organization

In the case of a failure to submit a notice required under section 506(a) (relating to organizations required to notify Secretary of intent to operate as 501(c)(4)) on the date and in the manner prescribed therefor, there shall be paid by the organization failing to so submit $20 for each day during which such failure continues, but the total amount imposed under this subparagraph on any organization for failure to submit any one notice shall not exceed $5,000.

(B) Managers

The Secretary may make written demand on an organization subject to penalty under subparagraph (A) specifying in such demand a reasonable future date by which the notice shall be submitted for purposes of this subparagraph. If such notice is not submitted on or before such date, there shall be paid by the person failing to so submit $20 for each day after the expiration of the time specified in the written demand during which such failure continues, but the total amount imposed under this subparagraph on all persons for failure to submit any one notice shall not exceed $5,000.

(5) Reasonable cause exception

No penalty shall be imposed under this subsection with respect to any failure if it is shown that such failure is due to reasonable cause.

(6) Other special rules

(A) Treatment as tax

Any penalty imposed under this subsection shall be paid on notice and demand of the Secretary and in the same manner as tax.

(B) Joint and several liability

If more than 1 person is liable under this subsection for any penalty with respect to any failure, all such persons shall be jointly and severally liable with respect to such failure.

(C) Person

For purposes of this subsection, the term "person" means any officer, director, trustee, employee, or other individual who is under a duty to perform the act in respect of which the violation occurs.

(7) Adjustment for inflation

(A) In general

In the case of any failure relating to a return required to be filed in a calendar year beginning after 2014, each of the dollar amounts under paragraphs (1), (2), and (3) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting "calendar year 2013" for "calendar year 2016" in subparagraph (A)(ii) thereof.

(B) Rounding

If any amount adjusted under subparagraph (A)—

(i) is not less than $5,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and

(ii) is not described in clause (i) and is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.

(d) Annual registration and other notification by pension plan

(1) Registration

In the case of any failure to file a registration statement required under section 6057(a) (relating to annual registration of certain plans) which includes all participants required to be included in such statement, on the date prescribed therefor (determined without regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing so to file, an amount equal to $10 for each participant with respect to whom there is a failure to file, multiplied by the number of days during which such failure continues, but the total amount imposed under this paragraph on any person for any failure to file with respect to any plan year shall not exceed $50,000.

(2) Notification of change of status

In the case of failure to file a notification required under section 6057(b) (relating to notification of change of status) on the date prescribed therefor (determined without regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing so to file, $10 for each day during which such failure continues, but the total amounts imposed under this paragraph on any person for failure to file any notification shall not exceed $10,000.

(e) Information required in connection with certain plans of deferred compensation, etc.

In the case of failure to file a return or statement required under section 6058 (relating to information required in connection with certain plans of deferred compensation), 6047 (relating to information relating to certain trusts and annuity and bond purchase plans), or 6039D (relating to returns and records with respect to certain fringe benefit plans) on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing so to file, $250 for each day during which such failure continues, but the total amount imposed under this subsection on any person for failure to file any return shall not exceed $150,000. This subsection shall not apply to any return or statement which is an information return described in section 6724(d)(1)(C)(ii) or a payee statement described in section 6724(d)(2)(AA).

(f) Returns required under section 6039C

(1) In general

In the case of each failure to make a return required by section 6039C which contains the information required by such section 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, the amount determined under paragraph (2) shall be paid (upon notice and demand by the Secretary and in the same manner as tax) by the person failing to make such return.

(2) Amount of penalty

For purposes of paragraph (1), the amount determined under this paragraph with respect to any failure shall be $25 for each day during which such failure continues.

(3) Limitation

The amount determined under paragraph (2) with respect to any person for failing to meet the requirements of section 6039C for any calendar year shall not exceed the lesser of—

(A) $25,000, or

(B) 5 percent of the aggregate of the fair market value of the United States real property interests owned by such person at any time during such year.

For purposes of the preceding sentence, fair market value shall be determined as of the end of the calendar year (or, in the case of any property disposed of during the calendar year, as of the date of such disposition).

[(g) Repealed. Pub. L. 113–295, div. A, title II, §221(a)(39)(B), Dec. 19, 2014, 128 Stat. 4043]

(h) Failure to give notice to recipients of certain pension, etc., distributions

In the case of each failure to provide notice as required by section 3405(e)(10)(B), at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such notice, an amount equal to $100 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $50,000.

(i) Failure to give written explanation to recipients of certain qualifying rollover distributions

In the case of each failure to provide a written explanation as required by section 402(f), at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such written explanation, an amount equal to $100 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $50,000.

(j) Failure to file certification with respect to certain residential rental projects

In the case of each failure to provide a certification as required by section 142(d)(7) at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such certification, an amount equal to $100 for each such failure.

(k) 1 Failure to make reports required under section 1202

In the case of a failure to make a report required under section 1202(d)(1)(C) which contains the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to make such report, an amount equal to $50 for each report with respect to which there was such a failure. In the case of any failure due to negligence or intentional disregard, the preceding sentence shall be applied by substituting "$100" for "$50". In the case of a report covering periods in 2 or more years, the penalty determined under preceding provisions of this subsection shall be multiplied by the number of such years. No penalty shall be imposed under this subsection on any failure which is shown to be due to reasonable cause and not willful neglect.

(l) Failure to file return with respect to certain corporate transactions

In the case of any failure to make a return required under section 6043(c) containing the information required by such section 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, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to file such return, an amount equal to $500 for each day during which such failure continues, but the total amount imposed under this subsection with respect to any return shall not exceed $100,000.

(m) Alcohol and tobacco taxes

For penalties for failure to file certain information returns with respect to alcohol and tobacco taxes, see, generally, subtitle E.

(n) Failure to make reports required under sections 3511, 6053(c)(8), and 7705

In the case of a failure to make a report required under section 3511, 6053(c)(8), or 7705 which contains the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to make such report, an amount equal to $50 for each report with respect to which there was such a failure. In the case of any failure due to negligence or intentional disregard the preceding sentence shall be applied by substituting "$100" for "$50".

(o) Failure to provide notices with respect to qualified small employer health reimbursement arrangements

In the case of each failure to provide a written notice as required by section 9831(d)(4), unless it is shown that such failure is due to reasonable cause and not willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such written notice, an amount equal to $50 per employee per incident of failure to provide such notice, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $2,500.

(p) Failure to provide notice under section 83(i)

In the case of each failure to provide a notice as required by section 83(i)(6), at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such notice, an amount equal to $100 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $50,000.

(Aug. 16, 1954, ch. 736, 68A Stat. 821; Pub. L. 85–866, title I, §85, Sept. 2, 1958, 72 Stat. 1664; Pub. L. 87–834, §19(d), Oct. 16, 1962, 76 Stat. 1057; Pub. L. 88–272, title II, §221(b)(2), Feb. 26, 1964, 78 Stat. 74; Pub. L. 89–97, title III, §313(e)(2)(B), (3), July 30, 1965, 79 Stat. 385; Pub. L. 89–212, §2(e), Sept. 29, 1965, 79 Stat. 859; Pub. L. 91–172, title I, §101(d)(4), Dec. 30, 1969, 83 Stat. 522; Pub. L. 93–406, title II, §1031(b)(1)(A), (B)(i), Sept. 2, 1974, 88 Stat. 945, 946; Pub. L. 94–455, title XII, §1207(e)(3)(B), (C), title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1708, 1834; Pub. L. 96–167, §7(b)(1), Dec. 29, 1979, 93 Stat. 1277; Pub. L. 96–223, title I, §101(d)(2)(A), Apr. 2, 1980, 94 Stat. 251; Pub. L. 96–499, title XI, §1123(b), Dec. 5, 1980, 94 Stat. 2689; Pub. L. 96–603, §1(d)(2), Dec. 28, 1980, 94 Stat. 3504; Pub. L. 97–34, title III, §311(f), title VII, §723(a)(1), (3), (4), Aug. 13, 1981, 95 Stat. 281, 343, 344; Pub. L. 97–248, title III, §§309(b)(2), 315(a), (b), Sept. 3, 1982, 96 Stat. 595, 605, 606; Pub. L. 97–448, title II, §201(i)(2), Jan. 12, 1983, 96 Stat. 2395; Pub. L. 98–67, title I, §105(b)(1), Aug. 5, 1983, 97 Stat. 380; Pub. L. 98–369, div. A, title I, §§145(b)(1), (2), 146(b)(1), (2), 148(b)(1), (2), 149(b)(1), 155(b)(2)(A), title IV, §491(d)(50), title V, §531(b)(4)(B), title VII, §714(j)(3), July 18, 1984, 98 Stat. 685, 686, 688, 689, 693, 852, 882, 963; Pub. L. 98–397, title II, §207(b), Aug. 23, 1984, 98 Stat. 1450; Pub. L. 98–611, §1(d)(2), Oct. 31, 1984, 98 Stat. 3177; Pub. L. 98–612, §1(b)(2), Oct. 31, 1984, 98 Stat. 3181; Pub. L. 99–514, title XI, §1151(b), title XIII, §1301(g), title XV, §1501(d)(1)(A), title XVII, §1702(b), title XVIII, §§1810(f)(9), 1811(c)(2), Oct. 22, 1986, 100 Stat. 2502, 2656, 2740, 2774, 2828, 2833; Pub. L. 100–203, title X, §§10502(d)(11), 10704(a), Dec. 22, 1987, 101 Stat. 1330–444, 1330–461; Pub. L. 100–647, title I, §§1011B(a)(10), 1017(b), 1018(u)(36), title III, §3021(a)(10), Nov. 10, 1988, 102 Stat. 3484, 3575, 3592, 3630; Pub. L. 101–140, title II, §203(a)(1), Nov. 8, 1989, 103 Stat. 830; Pub. L. 101–239, title VII, §§7208(b)(2), 7841(d)(5), Dec. 19, 1989, 103 Stat. 2338, 2428; Pub. L. 102–318, title V, §522(b)(2)(F), July 3, 1992, 106 Stat. 314; Pub. L. 103–66, title XIII, §13113(c), Aug. 10, 1993, 107 Stat. 429; Pub. L. 104–168, title XIII, §§1314(a), (b), July 30, 1996, 110 Stat. 1480; Pub. L. 104–188, title I, §§1455(c), (d)(2), 1704(s), Aug. 20, 1996, 110 Stat. 1818, 1887; Pub. L. 105–34, title XII, §1281(a), (b), title XVI, §1602(d)(2)(B), Aug. 5, 1997, 111 Stat. 1037, 1094; Pub. L. 105–277, div. J, title I, §1004(b)(2)(B), (C), Oct. 21, 1998, 112 Stat. 2681–890; Pub. L. 106–230, §§1(c), 2(c), 3(c), July 1, 2000, 114 Stat. 479, 482, 483; Pub. L. 109–222, title V, §516(c), May 17, 2006, 120 Stat. 371; Pub. L. 109–280, title XII, §§1201(b)(2), 1223(d), Aug. 17, 2006, 120 Stat. 1065, 1091; Pub. L. 113–295, div. A, title II, §221(a)(39)(B), div. B, title II, §§206(c)(4), 208(b), Dec. 19, 2014, 128 Stat. 4043, 4071, 4072; Pub. L. 114–113, div. Q, title IV, §405(c), Dec. 18, 2015, 129 Stat. 3119; Pub. L. 114–255, div. C, title XVIII, §18001(a)(5), Dec. 13, 2016, 130 Stat. 1342; Pub. L. 115–97, title I, §§11002(d)(1)(LL), 13603(e), Dec. 22, 2017, 131 Stat. 2060, 2164; Pub. L. 115–141, div. U, title IV, §401(a)(299)(B), (300), Mar. 23, 2018, 132 Stat. 1198; Pub. L. 116–94, div. O, title IV, §403(a)–(c), Dec. 20, 2019, 133 Stat. 3180.)

Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.

Editorial Notes

Codification

Sections 1201(b)(2) and 1223(d) of Pub. L. 109–280, which directed the amendment of section 6652 without specifying the act to be amended, were executed to this section, which is section 6652 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.

Pub. L. 101–140, §203(a)(1), amended this section to read as if the amendments made by section 1151(b) of Pub. L. 99–514 (enacting subsec. (l)) had not been enacted. Subsequent to enactment by Pub. L. 99–514, subsec. (l) was amended by Pub. L. 100–203, Pub. L. 100–647, and Pub. L. 101–239. See 1989, 1988, and 1987 Amendment notes below.

Amendments

2019—Subsec. (d)(1). Pub. L. 116–94, §403(b)(2), substituted "$50,000" for "$5,000".

Pub. L. 116–94, §403(b)(1), substituted "$10" for "$1".

Subsec. (d)(2). Pub. L. 116–94, §403(b)(3), substituted "$10,000" for "$1,000".

Pub. L. 116–94, §403(b)(1), substituted "$10" for "$1".

Subsec. (e). Pub. L. 116–94, §403(a), substituted "$250" for "$25" and "$150,000" for "$15,000".

Subsec. (h). Pub. L. 116–94, §403(c), substituted "$100" for "$10" and "$50,000" for "$5,000".

2018—Subsec. (c)(7)(A). Pub. L. 115–141, §401(a)(299)(B), inserted "an amount equal to" after "increased by" and "for the calendar year" after "section 1(f)(3)".

Subsec. (e). Pub. L. 115–141, §401(a)(300), substituted "section 6724(d)(2)(AA)" for "section 6724(d)(2)(Y)".

2017—Subsec. (c)(7)(A). Pub. L. 115–97, §11002(d)(1)(LL), substituted "for 'calendar year 2016' in subparagraph (A)(ii)" for "for 'calendar year 1992' in subparagraph (B)".

Subsec. (p). Pub. L. 115–97, §13603(e), added subsec. (p).

2016—Subsec. (o). Pub. L. 114–255 added subsec. (o).

2015—Subsec. (c)(4) to (7). Pub. L. 114–113 added par. (4) and redesignated former pars. (4) to (6) as (5) to (7), respectively.

2014—Subsec. (c)(1)(A). Pub. L. 113–295, §208(b)(2)(A), substituted "in applying the first sentence of this subparagraph, the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and" for "the first sentence of this subparagraph shall be applied by substituting '$100' for '$20' and".

Subsec. (c)(2)(C)(ii). Pub. L. 113–295, §208(b)(2)(B), substituted "in applying the first sentence of paragraph (1)(A), the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and in lieu of applying the second sentence of paragraph (1)(A), the maximum penalty under paragraph (1)(A) shall not exceed $50,000, and" for "the first sentence of paragraph (1)(A) shall be applied by substituting '$100' for '$20', and the second sentence thereof shall be applied by substituting '$50,000' for '$10,000', and".

Subsec. (c)(6). Pub. L. 113–295, §208(b)(1), added par. (6).

Subsec. (g). Pub. L. 113–295, §221(a)(39)(B), struck out subsec. (g). Text read as follows: "In the case of failure to make a report required by section 219(f)(4) which contains the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing so to file, an amount equal to $25 for each participant with respect to whom there was a failure to file such information, multiplied by the number of years during which such failure continues, but the total amount imposed under this subsection on any person for failure to file shall not exceed $10,000. No penalty shall be imposed under this subsection on any failure which is shown to be due to reasonable cause and not willful neglect."

Subsec. (n). Pub. L. 113–295, §206(c)(4), added subsec. (n).

2006—Subsec. (c)(1). Pub. L. 109–222, §516(c)(2), substituted "6033(a)(1)" for "6033" wherever appearing in heading and text.

Subsec. (c)(1)(E). Pub. L. 109–280, §1223(d), added subpar. (E). See Codification note above.

Subsec. (c)(2)(C). Pub. L. 109–280, §1201(b)(2), added subpar. (C). See Codification note above.

Subsec. (c)(3) to (5). Pub. L. 109–222, §516(c)(1), added par. (3) and redesignated former pars. (3) and (4) as (4) and (5), respectively.

2000—Subsec. (c)(1). Pub. L. 106–230, §3(c)(4), inserted "or 6012(a)(6)" after "section 6033" in heading.

Subsec. (c)(1)(A). Pub. L. 106–230, §3(c)(3), inserted "or section 6012(a)(6)" after "section 6033" in last sentence.

Subsec. (c)(1)(A)(i). Pub. L. 106–230, §3(c)(1), inserted "or section 6012(a)(6) (relating to returns by political organizations)" after "organizations)".

Subsec. (c)(1)(A)(ii). Pub. L. 106–230, §3(c)(2), inserted "or section 6012(a)(6)" after "section 6033".

Subsec. (c)(1)(C). Pub. L. 106–230, §2(c), in heading inserted "and reports" after "returns" and in text inserted "or report required under section 527(j)" after "filing)" and "or report" after "1 return".

Subsec. (c)(1)(D). Pub. L. 106–230, §1(c), in heading inserted "and notice of status" after "exemption" and in text inserted "or notice materials (as defined in such section)" after "section)".

1998—Subsec. (c)(1)(C). Pub. L. 105–277, §1004(b)(2)(B), substituted "section 6104(d) with respect to any annual return" for "subsection (d) or (e)(1) of section 6104 (relating to public inspection of annual returns)".

Subsec. (c)(1)(D). Pub. L. 105–277, §1004(b)(2)(C), substituted "section 6104(d) with respect to any exempt status application materials (as defined in such section)" for "section 6104(e)(2) (relating to public inspection of applications for exemption)".

1997—Subsec. (e). Pub. L. 105–34, §1602(d)(2)(B), substituted "section 6724(d)(2)(Y)" for "section 6724(d)(2)(X)".

Subsec. (g). Pub. L. 105–34, §1281(a), inserted at end "No penalty shall be imposed under this subsection on any failure which is shown to be due to reasonable cause and not willful neglect."

Subsec. (k). Pub. L. 105–34, §1281(b), inserted at end "No penalty shall be imposed under this subsection on any failure which is shown to be due to reasonable cause and not willful neglect."

1996—Subsec. (c)(1)(A). Pub. L. 104–168 in concluding provisions, substituted "$20" for "$10" and "$10,000" for "$5,000" and inserted at end "In the case of an organization having gross receipts exceeding $1,000,000 for any year, with respect to the return required under section 6033 for such year, the first sentence of this subparagraph shall be applied by substituting '$100' for '$20' and, in lieu of applying the second sentence of this subparagraph, the maximum penalty under this subparagraph shall not exceed $50,000."

Subsec. (c)(1)(C). Pub. L. 104–188, §1704(s)(1), substituted "$20" for "$10" and "$10,000" for "$5,000".

Subsec. (c)(1)(D). Pub. L. 104–188, §1704(s)(2), substituted "$20" for "$10".

Subsec. (e). Pub. L. 104–188, §1455(d)(2), inserted at end "This subsection shall not apply to any return or statement which is an information return described in section 6724(d)(1)(C)(ii) or a payee statement described in section 6724(d)(2)(X)."

Subsec. (i). Pub. L. 104–188, §1455(c), substituted "$100" and "$50,000" for "the $10" and "$5,000", respectively.

1993—Subsec. (k). Pub. L. 103–66, which directed amendment of section by adding subsec. (k) before the last subsection, was executed by adding subsec. (k) after subsec. (j) to reflect the probable intent of Congress.

1992—Subsec. (h). Pub. L. 102–318 substituted "3405(e)(10)(B)" for "3405(d)(10)(B)".

1989—Subsec. (k). Pub. L. 101–239, §7841(d)(5)(B), redesignated the subsec. (k), relating to alcohol and tobacco taxes, as (l).

Pub. L. 101–239, §7841(d)(5)(A), redesignated the subsection relating to information with respect to includible employee benefits as (k), see Codification note above.

Pub. L. 101–140 amended this section to read as if amendments by Pub. L. 99–514, §1151(b), had not been enacted, see Codification note above and 1986 Amendment note below.

Subsec. (l). Pub. L. 101–239, §7208(b)(2), added subsec. (l) and redesignated former subsec. (l) as (m).

Pub. L. 101–239, §7841(d)(5)(B), redesignated subsec. (k), relating to alcohol and tobacco taxes, as (l).

Subsec. (m). Pub. L. 101–239, §7208(b)(2), redesignated subsec. (l) as (m).

1988—Subsec. (j). Pub. L. 100–647, §1017(b), amended subsec. (j) as it existed prior to its repeal by Pub. L. 100–203, §10502(d)(11), by inserting "(and the corresponding provision of section 4041(d)(1))" after "section 4041(a)(1)", see 1987 Amendment note below.

Subsec. (k)(2)(B). Pub. L. 100–647, §3021(a)(10), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: "the employer-provided benefit (within the meaning of section 89 without regard to subsection (g)(3) thereof) with respect to the employee to whom such failure relates." See Codification note above.

Pub. L. 100–647, §1011B(a)(10), substituted "subsection (g)(3)(C)(i)" for "subsection (g)(3)". See Codification note above.

Subsec. (k)(4). Pub. L. 100–647, §1018(u)(36), substituted "or part II of subchapter B of this chapter" for "or section 6678". See Codification note above.

1987—Subsec. (c). Pub. L. 100–203, §10704(a), amended subsec. (c) generally, revising and restating as pars. (1) to (4) provisions of former pars. (1) to (3).

Subsec. (j). Pub. L. 100–203, §10502(d)(11), struck out subsec. (j), as added by section 1702(b) of Pub. L. 99–514, which related to failure to give written notice to certain sellers of diesel fuel.

Subsecs. (k), (l). Pub. L. 100–203, §10502(d)(11), redesignated subsec. (l), relating to information with respect to includible employee benefits, as (k), and directed the redesignation of a nonexistent subsec. (m) as (l). See Codification note above.

1986—Subsec. (a). Pub. L. 99–514, §1501(d)(1)(A), redesignated subsec. (b) as (a), substituted "Returns with respect to certain payments aggregating less than $10" for "Other returns" in heading, and struck out former subsec. (a) which provided penalties for failure to file returns relating to information at source, payments of dividends, etc. and certain transfers of stock.

Pub. L. 99–514, §1811(c)(2), inserted "(other than by subsection (d) of such section)" in par. (3)(A)(ii).

Subsecs. (b) to (f). Pub. L. 99–514, §1501(d)(1)(A)(i), redesignated subsecs. (c) to (f) as (b) to (e), respectively. Former subsec. (b) redesignated (a).

Subsec. (g). Pub. L. 99–514, §1501(d)(1)(A)(i), redesignated subsec. (h) as (g). Former subsec. (g) redesignated (f).

Pub. L. 99–514, §1810(f)(9)(C), struck out "etc.," after "Returns" in heading.

Subsec. (g)(1). Pub. L. 99–514, §1810(f)(9)(A), in amending par. (1) generally, struck out "(A)" after "In the case of each failure", and struck out "(B) to furnish a statement required by section 6039C(b)(3)," before "on the date required".

Subsec. (g)(3). Pub. L. 99–514, §1810(f)(9)(B), in amending par. (3) generally, designated former subpar. (B) of par. (3) as the entire paragraph, struck out former subpar. (A) setting a limitation of $25,000 with respect to each subsection for failure to meet the requirements of subsection (a) or (b) of section 6039C, struck out former subpar. (B) heading "For failure to meet requirements of section 6039C(c)" and in text substituted "requirements of section 6039C" for "requirements of subsection (c) of section 6039C" and inserted "(A)" before "$25,000" and "(B)" before "5 percent".

Subsecs. (h), (i). Pub. L. 99–514, §1501(d)(1)(A)(i), redesignated subsecs. (i) and (j) as (h) and (i), respectively. Former subsec. (h) redesignated (g).

Subsec. (j). Pub. L. 99–514, §1702(b), added subsec. (j) relating to failure to give written notice to certain sellers of diesel fuel, and redesignated former subsec. (j), relating to alcohol and tobacco taxes, as (k).

Pub. L. 99–514, §1301(g), added subsec. (j) relating to failure to file certification with respect to certain residential projects.

Pub. L. 99–514, §1501(d)(1)(A)(i), redesignated subsec. (k), relating to alcohol and tobacco taxes, as (j). Former subsec. (j), relating to failure to give written explanation to recipients of certain qualifying rollover distributions, redesignated (i). Such subsec. (j), relating to alcohol and tobacco taxes, was subsequently redesignated as subsec. (k) by section 1301(g) of Pub. L. 99–514, and also by section 1702(b) of Pub. L. 99–514, both of which added a new subsec. (j), see above.

Subsec. (k). Pub. L. 99–514, §1501(d)(1)(A)(i), redesignated subsec. (k), relating to alcohol and tobacco taxes, as (j). Subsequently, such subsec. (j) was redesignated as subsec. (k) by section 1301(g) of Pub. L. 99–514, and also by section 1702(b) of Pub. L. 99–514.

Subsecs. (l), (m). Pub. L. 99–514, §1151(b), directed the redesignation of a nonexistent subsec. (l) as (m), and added a new subsec. (l) relating to information with respect to includible employee benefits.

1984—Subsec. (a)(1)(B)(v). Pub. L. 98–369, §145(b)(1), added cl. (v).

Subsec. (a)(1)(B)(vi). Pub. L. 98–369, §146(b)(1), added cl. (vi).

Subsec. (a)(1)(B)(vii). Pub. L. 98–369, §148(b)(1), added cl. (vii).

Subsec. (a)(1)(B)(viii). Pub. L. 98–369, §149(b)(1), added cl. (viii).

Subsec. (a)(1)(B)(ix). Pub. L. 98–369, §155(b)(2)(A), added cl. (ix).

Subsec. (a)(3)(A)(iii). Pub. L. 98–369, §148(b)(2), substituted ", 6050I, or 6050J" for "or 6050I".

Pub. L. 98–369, §146(b)(2), substituted ", 6050H or 6050I" for "or section 6050H".

Pub. L. 98–369, §145(b)(2), inserted "or section 6050H" after "section 6041A(b)".

Subsec. (f). Pub. L. 98–611, §1(d)(2), and Pub. L. 98–612, §1(b)(2), made identical amendments, substituting "6039D (relating to returns and records with respect to certain fringe benefit plans)" for "125(h) (relating to information with respect to cafeteria plans)".

Pub. L. 98–369, §531(b)(4)(B)(i), which directed the amendment of subsec. (f) by striking out "or 6047 (relating to information relating to certain trusts and annuity and bond purchase plans)" and inserting in lieu thereof ", 6047 (relating to information relating to certain trusts and annuity and bond purchase plans), or 125(h) (relating to information with respect to cafeteria plans)", was executed by substituting the quoted phrase for "or 6047 (relating to information relating to certain trusts and annuity plans)", as the probable intent of Congress.

Pub. L. 98–369, §531(b)(4)(B)(ii), inserted "; etc." in heading.

Pub. L. 98–369, §491(d)(50), struck out "and bond purchase" after "trusts and annuity".

Subsec. (i). Pub. L. 98–369, §714(j)(3), added subsec. (i). Former subsec. (i), relating to alcohol and tobacco taxes, redesignated (j).

Subsec. (j). Pub. L. 98–397, §207(b), added subsec. (j). Former subsec. (j), relating to alcohol and tobacco taxes, redesignated (k).

Pub. L. 98–369, §714(j)(3), redesignated former subsec. (i), relating to alcohol and tobacco taxes, as (j).

Subsec. (k). Pub. L. 98–397, §207(b), redesignated subsec. (j), relating to alcohol and tobacco taxes, as (k).

1983—Subsec. (a)(1)(A). Pub. L. 98–67, §105(b)(1)(B), struck out cls. (ii), (iii), and (iv), redesignated cls. (v) and (vi) as (ii) and (iii), respectively, and in cl. (iii), as so redesignated, struck out "6042(e), 6044(f), 6049(e), or" before "6051(d)".

Subsec. (a)(2), (3). Pub. L. 98–67, §105(b)(1)(A), (C), added par. (2), redesignated former par. (2) as (3), and in par. (3), as so redesignated, inserted references to paragraph (2) in provisions preceding subpar. (A) and in provisions of subpar. (A) preceding cl. (i).

Subsec. (a). Pub. L. 97–448, which directed that "or" be struck out at end of subpar. (F) of par. (1), "or" be inserted at end of par. (2), a new par. (3) be added, and that in provision following par. (3), "paragraph (2) or (3)" be substituted for "paragraph (2)", was executed by striking out "or" at end of subpar. (A)(vi) of par. (1), inserting "or" at end of subpar. (B)(iv) of par. (1), redesignating par. (3) as subpar. (C) and adding such subpar. (C), to par. (1), and in provision following subpar. (C) substituting "subparagraph (B) or (C)" for "subparagraph (B)", to reflect the probable intent of Congress and the intervening amendment of subsec. (a) by section 315(a) of Pub. L. 97–248 which redesignated former par. (1) as subpar. (A), former subpars. (A) to (F) as cls. (i) to (vi), and former par. (2) as subpar. (B), and in provision following subpar. (B) as so redesignated, substituted "subparagraph (B)" for "paragraph (2)".

1982—Subsec. (a). Pub. L. 97–248, §315(a), designated existing provisions as par. (1) with a heading "In general", redesignated former par. (1) as subpar. (A), in subpar. (A) as so redesignated struck out "aggregate" before "amount", redesignated former subpars. (A) through (F) as cls. (i) through (vi), respectively, in cls. (ii) and (iii) as so redesignated struck out "aggregating $10 or more" after "dividends", in cl. (iv) as so redesignated substituted "(a)" for "(a)(1)" and struck out "aggregating $10 or more" after "interest", in cl. (vi) as so redesignated inserted "6042(e), 6044(f), 6049(e), or" before "6051(d)", redesignated former par. (2) as subpar. (B), in subpar. (B) as so redesignated designated from "section 6052(a)" through the end of the parenthesis as cl. (iii) and struck out "with respect to group-term life insurance on the life of an employee" thereafter, added cls. (i), (ii), and (iv), in text after cl. (iv) substituted "subparagraph (A)" for "paragraph (1)", "subparagraph (B)" for "paragraph (2)", "$50 for each such failure" for "$10 for each such failure", and "shall not exceed $50,000" for "shall not exceed $25,000", and added par. (2).

Subsec. (b). Pub. L. 97–248, §309(b)(2), struck out pars. (3) and (4) which referred to section 6049(a)(2) and section 6049(a)(3), respectively, as sources of authority for the requirement of filing a statement of payment to another person.

Subsec. (f). Pub. L. 97–248, §315(b), substituted "$25" and "$15,000" for "$10" and "$5,000", respectively.

1981—Subsec. (a). Pub. L. 97–34, §723(a)(4), inserted in heading "information at source," before "payments of dividends".

Subsec. (a)(1). Pub. L. 97–34, §723(a)(1), added subpars. (A), (E), and (F), and redesignated former subpars. (A) to (C) as (B) to (D), respectively.

Subsec. (b). Pub. L. 97–34, §723(a)(3), substituted provisions relating to failure to file required statement of payment to another person under authority of section 6042(a)(2), 6044(a)(2), or 6049(a)(2) or (3), and imposition of penalties with a maximum of $1,000 for all failures during the calendar year, for provisions relating to failure to file required statement of payment to another person under authority of section 6041, 6042(a)(2), 6044(a)(2), 6049(a)(2) or (3), 6050A(a) or (b), 6050C, 6051(d), or 6053(b), and imposition of penalties with a maximum of $1,000 for all failures during the calendar year.

Subsecs. (h), (i). Pub. L. 97–34, §311(f), added subsec. (h) and redesignated former subsec. (h) as (i).

1980—Subsec. (b). Pub. L. 96–223 inserted reference to statement required by section 6050C (relating to information regarding windfall profit tax on crude oil).

Subsec. (d)(3). Pub. L. 96–603 substituted in heading "returns" for "reports" and in text "failure to comply" for "failure to file a report required under section 6056 (relating to annual reports by private foundations) or to comply", "failing to meet such requirements" for "failing so to file or meet the publicity requirement", and "failure with respect" for "failure to file or comply with the requirements of section 6104(d) with regard".

Subsecs. (g), (h). Pub. L. 96–499 added subsec. (g) and redesignated former subsec. (g) as (h).

1979—Subsec. (a). Pub. L. 96–167 inserted "or" after "$10 or more)," in par. (1), struck out par. (2) relating to failure to make a return required by section 6039(a) with respect to a transfer of stock or a transfer of legal title to stock, redesignated par. (3) as (2), and in closing provision substituted "return referred to in paragraph (2)" for "return referred to in paragraph (2) or (3)".

1976—Subsec. (a). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Subsec. (b). Pub. L. 94–455, §§1207(e)(3)(B), (C), 1906(b)(13)(A), inserted "in the case of each failure to make a return required by section 6050A(a) (relating to reporting requirements of certain fishing boat operators)," after "income tax withheld)," and "or section 6050A(b) (relating to statements furnished by certain fishing boat operators)," after "respect to tips)," and struck out "or his delegate" after "Secretary".

Subsecs. (d) to (f). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary" wherever appearing.

1974—Pub. L. 93–406, §1031(b)(1)(B)(i), inserted ", registration statements, etc." in section catchline.

Subsecs. (e) to (g). Pub. L. 93–406, §1031(b)(1)(A), added subsecs. (e) and (f) and redesignated former subsec. (e) as (g).

1969—Subsecs. (d), (e). Pub. L. 91–172 added subsec. (d) and redesignated former subsec. (d) as (e).

1965—Subsec. (b). Pub. L. 89–97, §313(e)(2)(B), inserted "and in the case of each failure to furnish a statement required by section 6053(b) (relating to statements furnished by employers with respect to tips)," after "income tax withheld),".

Subsec. (c). Pub. L. 89–212 inserted "or which are compensation (as defined in section 3231(e))" and "or section 3201 (as the case may be)".

Pub. L. 89–97, §313(e)(3), added subsec. (c). Former subsec. (c) redesignated (d).

Subsec. (d). Pub. L. 89–97, §313(e)(3), redesignated former subsec. (c) as (d).

1964—Subsec. (a). Pub. L. 88–272 provided a penalty for failure to make a return required by section 6039(a) with respect to a transfer of stock or a transfer of legal title to stock, and by section 6052(a) with respect to group-term life insurance on the life of an employee.

1962—Subsec. (a). Pub. L. 87–834 added subsec. (a). Former subsec. (a) redesignated (b).

Subsec. (b). Pub. L. 87–834 redesignated former subsec. (a) as (b), and substituted "section 6042(a)(2) (relating to payments of dividends aggregating less than $10), section 6044(a)(2) (relating to payments of patronage dividends aggregating less than $10), section 6049(a)(2) (relating to payments of interest aggregating less than $10), section 6049(a)(3) (relating to other payments of interest by corporations), or section 6051(d) (relating to information returns with respect to income tax withheld)" for "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)". Former subsec. (b) redesignated (c).

Subsec. (c). Pub. L. 87–834 redesignated former subsec. (b) as (c).

1958—Subsec. (a). Pub. L. 85–866 substituted "section 6042(1)" for "section 6042" and "(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" for "by the person failing to file the statement, upon notice and demand by the Secretary or his delegate and in the same manner as tax, $1 for each such statement not filed", deleted "section 6045 (relating to returns of brokers)" after "patronage dividends)" and inserted "on the date prescribed therefor (determined with regard to any extension of time for filing)" after "income tax withheld),".

Statutory Notes and Related Subsidiaries

Effective Date of 2019 Amendment

Pub. L. 116–94, div. O, title IV, §403(d), Dec. 20, 2019, 133 Stat. 3180, provided that: "The amendments made by this section [amending this section] shall apply to returns, statements, and notifications required to be filed, and notices required to be provided, after December 31, 2019."

Effective Date of 2017 Amendment

Amendment by section 11002(d)(1)(LL) of Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title.

Amendment by section 13603(e) of Pub. L. 115–97 applicable to failures to provide notice after Dec. 31, 2017, see section 13603(f)(2) of Pub. L. 115–97, set out as a note under section 83 of this title.

Effective Date of 2016 Amendment

Amendment by Pub. L. 114–255 applicable to notices with respect to years beginning after Dec. 31, 2016, see section 18001(a)(7)(D) of Pub. L. 114–255, set out in a note under section 36B of this title.

Effective Date of 2015 Amendment

Amendment by Pub. L. 114–113 applicable to organizations which are described in section 501(c)(4) of this title and organized after Dec. 18, 2015, and to certain then-existing organizations, see section 405(f) of Pub. L. 114–113, set out as an Effective Date note under section 506 of this title.

Effective Date of 2014 Amendment

Amendment by section 221(a)(39)(B) of Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of div. A of Pub. L. 113–295, set out as a note under section 1 of this title.

Amendment by section 206(c)(4) of Pub. L. 113–295 applicable with respect to wages for services performed on or after January 1 of the first calendar year beginning more than 12 months after Dec. 19, 2014, see section 206(g)(1) of div. B of Pub. L. 113–295, set out as a note under section 3302 of this title.

Amendment by section 208(b) of div. B of Pub. L. 113–295 applicable to returns required to be filed, and statements required to be furnished, after Dec. 31, 2014, see section 208(h) of div. B of Pub. L. 113–295, set out as a note under section 6651 of this title.

Effective Date of 2006 Amendment

Amendment by section 1201(b)(2) of Pub. L. 109–280 applicable to returns for taxable years beginning after Dec. 31, 2006, see section 1201(c)(2) of Pub. L. 109–280, set out as a note under section 6034 of this title.

Amendment by section 1223(d) of Pub. L. 109–280 applicable to notices and returns with respect to annual periods beginning after 2006, see section 1223(f) of Pub. L. 109–280, set out as a note under section 6033 of this title.

Amendment by Pub. L. 109–222 applicable to disclosures the due date for which are after May 17, 2006, see section 516(d)(2) of Pub. L. 109–222, set out as an Effective Date note under section 4965 of this title.

Effective Date of 2000 Amendment

Amendment by section 1(c) of Pub. L. 106–230 effective July 1, 2000, see section 1(d) of Pub. L. 106–230, set out as a note under section 527 of this title.

Amendment by section 3(c) of Pub. L. 106–230 applicable to returns for taxable years beginning after June 30, 2000, see section 3(d) of Pub. L. 106–230, set out as a note under section 6012 of this title.

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–277 applicable to requests made after the later of Dec. 31, 1998, or the 60th day after the Secretary of the Treasury first issues the regulations referred to in section 6104(d)(4) of this title, see section 1004(b)(3) of Pub. L. 105–277, set out as a note under section 6104 of this title.

Effective Date of 1997 Amendment

Pub. L. 105–34, title XII, §1281(e), Aug. 5, 1997, 111 Stat. 1037, provided that: "The amendments made by this section [amending this section and sections 6683 and 7519 of this title] shall apply to taxable years beginning after the date of the enactment of this Act [Aug. 5, 1997]."

Amendment by section 1602(d)(2)(B) of Pub. L. 105–34 effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996, Pub. L. 104–191, to which such amendment relates, see section 1602(i) of Pub. L. 105–34, set out as a note under section 26 of this title.

Effective Date of 1996 Amendments

Amendment by section 1455(c), (d)(2) of Pub. L. 104–188 applicable to returns, reports, and other statements the due date for which (determined without regard to extensions) is after Dec. 31, 1996, see section 1455(e) of Pub. L. 104–188, set out as a note under section 408 of this title.

Pub. L. 104–168, title XIII, §1314(c), July 30, 1996, 110 Stat. 1481, provided that: "The amendments made by this section [amending this section] shall apply to returns for taxable years ending on or after the date of the enactment of this Act [July 30, 1996]."

Effective Date of 1993 Amendment

Amendment by Pub. L. 103–66 applicable to stock issued after Aug. 10, 1993, see section 13113(e) of Pub. L. 103–66, set out as a note under section 53 of this title.

Effective Date of 1992 Amendment

Amendment by Pub. L. 102–318 applicable, except as otherwise provided, to distributions after Dec. 31, 1992, see section 522(d) of Pub. L. 102–318, set out as a note under section 401 of this title.

Effective Date of 1989 Amendments

Amendment by section 7208(b)(2) of Pub. L. 101–239 applicable to transactions after Mar. 31, 1990, see section 7208(b)(4) of Pub. L. 101–239, set out as a note under section 6043 of this title.

Amendment by Pub. L. 101–140 effective as if included in section 1151 of Pub. L. 99–514, see section 203(c) of Pub. L. 101–140, set out as a note under section 79 of this title.

Effective Date of 1988 Amendment

Amendment by sections 1011B(a)(10), 1017(b), 1018(u)(36) of Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Amendment by section 3021(a)(10) of Pub. L. 100–647 effective as if included in the amendments by section 1151 of Pub. L. 99–514, see section 3021(d)(1) of Pub. L. 100–647, set out as a note under section 129 of this title.

Effective Date of 1987 Amendment

Amendment by section 10502(d)(11) of Pub. L. 100–203 applicable to sales after Mar. 31, 1988, see section 10502(e) of Pub. L. 100–203, set out as a note under section 40 of this title.

Pub. L. 100–203, title X, §10704(d), Dec. 22, 1987, 101 Stat. 1330–463, provided that: "The amendments made by this section [amending this section and sections 6685 and 7207 of this title] shall apply—

"(1) to returns for years beginning after December 31, 1986, and

"(2) on and after the date of the enactment of this Act [Dec. 22, 1987] in the case of applications submitted to the Internal Revenue Service—

"(A) after July 15, 1987, or

"(B) on or before July 15, 1987, if the organization has a copy of the application on July 15, 1987."

Effective Date of 1986 Amendment

Amendment by section 1151(b) of Pub. L. 99–514 applicable to years beginning after Dec. 31, 1988, with certain qualifications and exceptions, see section 1151(k) of Pub. L. 99–514, as amended, set out as a note under section 79 of this title.

Amendment by section 1301(g) of Pub. L. 99–514 applicable to bonds issued after Aug. 15, 1986, except as otherwise provided, see sections 1311 to 1318 of Pub. L. 99–514, set out as an Effective Date; Transitional Rules note under section 141 of this title.

Amendment by section 1501(d)(1)(A) of Pub. L. 99–514 applicable to returns the due date for which (determined without regard to extensions) is after Dec. 31, 1986, see section 1501(e) of Pub. L. 99–514, set out as an Effective Date note under section 6721 of this title.

Amendment by section 1702(b) of Pub. L. 99–514 applicable to sales after first calendar quarter beginning more than 60 days after Oct. 22, 1986, see section 1702(c) of Pub. L. 99–514, set out as a note under section 4041 of this title.

Amendment by sections 1810(f)(9) and 1811(c)(2) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date of 1984 Amendments

Amendment by Pub. L. 98–612 effective Jan. 1, 1985, see section 1(d)(2) of Pub. L. 98–612, Oct. 31, 1984, 98 Stat. 3181.

Amendment by Pub. L. 98–611 effective Jan. 1, 1985, see section 1(g)(2) of Pub. L. 98–611, set out as a note under section 127 of this title.

Amendment by Pub. L. 98–397 applicable to distributions after Dec. 31, 1984, see section 302(c) of Pub. L. 98–397, set out as a note under section 1001 of Title 29, Labor.

Amendment by section 145(b)(1), (2) of Pub. L. 98–369 applicable to amounts received after Dec. 31, 1984, see section 145(d) of Pub. L. 98–369, set out as an Effective Date note under section 6050H of this title.

Amendment by section 146(b)(1), (2) of Pub. L. 98–369 applicable to amounts received after Dec. 31, 1984, see section 146(d) of Pub. L. 98–369, set out as an Effective Date note under section 6050I of this title.

Amendment by section 148(b)(1), (2) of Pub. L. 98–369 applicable with respect to acquisitions of property and abandonments of property after Dec. 31, 1984, see section 148(d) of Pub. L. 98–369, set out as an Effective Date note under section 6050J of this title.

Amendment by section 149(b)(1) of Pub. L. 98–369 applicable with respect to exchanges after Dec. 31, 1984, see section 149(d) of Pub. L. 98–369, set out as an Effective Date note under section 6050K of this title.

Amendment by section 155(b)(2)(A) of Pub. L. 98–369 applicable to contributions made after Dec. 31, 1984, in taxable years ending after such date, see section 155(d)(1) of Pub. L. 98–369, set out as an Effective Date note under section 6050L of this title.

Amendment by section 491(d)(50) of Pub. L. 98–369 applicable to obligations issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98–369, set out as a note under section 62 of this title.

Amendment by section 531(b)(4)(B) of Pub. L. 98–369 effective Jan. 1, 1985, see section 531(h) of Pub. L. 98–369, set out as an Effective Date note under section 132 of this title.

Amendment by section 714(j)(3) of Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title.

Effective Date of 1983 Amendments

Amendment by Pub. L. 98–67 applicable with respect to payments made after Dec. 31, 1983, see section 110(a) of Pub. L. 98–67, set out as a note under section 31 of this title.

Pub. L. 97–448, title II, §203(a), (b), Jan. 12, 1983, 96 Stat. 2397, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(a) General Rule.—Except as provided in subsection (b), any amendment made by this title [amending this section and sections 44D, 46, 48, 193, 613A, 4988, 4989, 4991–4997, 6015, 6154, 6654, 6655, and 6678 of this title, enacting provisions set out as notes under section 4996 of this title, and amending a provision set out as a note under section 44E of this title] shall take effect as if it had been included in the provision of the Crude Oil Windfall Profit Tax Act of 1980 [Pub. L. 96–223] to which such amendment relates.

"(b) Exceptions.—

"(1) Definition of independent producer.—The amendment made by section 201(d)(1) [amending section 4992 of this title] shall take effect on January 1, 1983.

"(2) Penalty provision.—The amendments made by section 201(i) [amending this section and sections 4997 and 6678 of this title] shall apply with respect to returns and statements the due dates for which (without regard to extensions) are after the date of the enactment of this Act [Jan. 12, 1983].

"(3) Amendments to section 613a.—

"(A) The amendment made by section 202(d)(1) [amending section 613A of this title] shall apply to transfers in taxable years ending after December 31, 1974, but only for purposes of applying section 613A of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] to periods after December 31, 1979.

"(B) The amendment made by section 202(d)(2) [amending section 613A of this title] shall apply to bulk sales after September 18, 1982.

"(4) No withholding by reason of condensate provision.—No withholding of tax shall be required under section 4995 of the Internal Revenue Code of 1986 by reason of the amendment made by section 201(h)(2)(A) of this Act [amending section 4996 of this title] before the date on which regulations with respect to such amendment are published in the Federal Register."

Effective Date of 1982 Amendment

Amendment by section 309(b)(2) of Pub. L. 97–248 applicable to amounts paid (or treated as paid) after Dec. 31, 1982, see section 309(c) of Pub. L. 97–248, set out as a note under section 6049 of this title.

Pub. L. 97–248, title III, §315(d), Sept. 3, 1982, 96 Stat. 607, provided that: "The amendments made by this section [amending this section and section 6678 of this title] shall apply with respect to returns or statements the due date for the filing of which (without regard to extensions) is after December 31, 1982."

Effective Date of 1981 Amendment

Amendment by section 311(f) of Pub. L. 97–34 applicable to taxable years beginning after Dec. 31, 1981, see section 311(i)(1) of Pub. L. 97–34, set out as a note under section 219 of this title.

Pub. L. 97–34, title VII, §723(c), Aug. 13, 1981, 95 Stat. 344, provided that: "The amendments made by this section [amending this section and sections 6041 and 6678 of this title] shall apply to returns and statements required to be furnished after December 31, 1981."

Effective Date of 1980 Amendments

Amendment by Pub. L. 96–603 applicable to taxable years beginning after Dec. 31, 1980, see section 1(f) of Pub. L. 96–603, set out as a note under section 6033 of this title.

Amendment by Pub. L. 96–499, applicable to 1980 and subsequent calendar years, with 1980 being treated as beginning on June 19, 1980, and ending on Dec. 31, 1980, see section 1125(b) of Pub. L. 96–499, set out as an Effective Date note under section 897 of this title.

Amendment by Pub. L. 96–223 applicable to periods after Feb. 29, 1980, see section 101(i) of Pub. L. 96–223, set out as a note under section 6161 of this title.

Effective Date of 1979 Amendment

Pub. L. 96–167, §7(c), Dec. 29, 1979, 93 Stat. 1277, provided that: "The amendments made by this section [amending this section and sections 6039 and 6678 of this title] shall apply with respect to calendar years beginning after 1979."

Effective Date of 1976 Amendment

Amendment by section 1207(e)(3)(B), (C) of Pub. L. 94–455 applicable to calendar years beginning after Oct. 4, 1976, see section 1207(f)(4) of Pub. L. 94–455, set out as a note under section 3121 of this title.

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–406 effective Sept. 2, 1974, see section 1034 of Pub. L. 93–406, set out as an Effective Date note under section 6057 of this title.

Effective Date of 1969 Amendment

Amendment by Pub. L. 91–172 applicable to taxable years beginning after Dec. 31, 1969, see section 101(k)(2)(B) of Pub. L. 91–172, set out as an Effective Date note under section 4940 of this title.

Effective Date of 1965 Amendments

Amendment by Pub. L. 89–212 effective only with respect to tips received after 1965, see section 6 of Pub. L. 89–212, set out as a note under section 3201 of this title.

Amendment by Pub. L. 89–97 applicable only with respect to tips received by employees after 1965, see section 313(f) of Pub. L. 89–97, set out as an Effective Date note under section 6053 of this title.

Effective Date of 1964 Amendment

Amendment by Pub. L. 88–272 applicable to group-term life insurance provided after Dec. 31, 1963, in taxable years ending after such date, see section 204(d) of Pub. L. 88–272, set out as an Effective Date note under section 79 of this title.

Amendment by Pub. L. 88–272 applicable to taxable years ending after Dec. 31, 1963, except for par. (2) of subsec. (a) which shall apply to stock transferred pursuant to options exercised on or after Jan. 1, 1964, see section 221(e) of Pub. L. 88–272, set out as a note under section 421 of this title.

Effective Date of 1962 Amendment

Amendment by Pub. L. 87–834 applicable to payments of dividends and interest made on or after Jan. 1, 1963, and to payments of amounts described in section 6044(b) of this title made on or after Jan. 1, 1963, with respect to patronage occurring on or after the first day of the first taxable year of the cooperative beginning on or after Jan. 1, 1963, see section 19(h) of Pub. L. 87–834, set out as a note under section 6042 of this title.

Effective Date of 1958 Amendment

Amendment by Pub. L. 85–866 effective Aug. 17, 1954, see section 1(c)(2) of Pub. L. 85–866, set out as a note under section 165 of this title.

Nonenforcement of Amendment Made by Section 1151 of Pub. L. 99–514 for Fiscal Year 1990

No monies appropriated by Pub. L. 101–136 to be used to implement or enforce section 1151 of Pub. L. 99–514 or the amendments made by such section, see section 528 of Pub. L. 101–136, set out as a note under section 89 of this title.

Plan Amendments Not Required Until January 1, 1998

For provisions directing that if any amendments made by subtitle D [§§1401–1465] of title I of Pub. L. 104–188 require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after Jan. 1, 1998, see section 1465 of Pub. L. 104–188, set out as a note under section 401 of this title.

Plan Amendments Not Required Until January 1, 1994

For provisions directing that if any amendments made by subtitle B [§§521–523] of title V of Pub. L. 102–318 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1994, see section 523 of Pub. L. 102–318, set out as a note under section 401 of this title.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

1 See 1993 Amendment note below.
26 U.S.C. § 6225 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 63 / Subchapter C / Section 6225: Partnership adjustment by Secretary
Partnership adjustment by Secretary
Status: in_force

(a) In general

In the case of any adjustments by the Secretary to any partnership-related items with respect to any reviewed year of a partnership—

(1) if such adjustments result in an imputed underpayment, the partnership shall pay an amount equal to such imputed underpayment in the adjustment year as provided in section 6232, and

(2) if such adjustments do not result in an imputed underpayment, such adjustments shall be taken into account by the partnership in the adjustment year.

(b) Determination of imputed underpayments

For purposes of this subchapter—

(1) In general

Except as otherwise provided in this section, any imputed underpayment with respect to any reviewed year shall be determined by the Secretary by—

(A) appropriately netting all partnership adjustments with respect to such reviewed year, and

(B) applying the highest rate of tax in effect for the reviewed year under section 1 or 11.

(2) Adjustments to distributive shares of partners not netted

In the case of any adjustment which reallocates the distributive share of any item from one partner to another, such adjustment shall be taken into account by disregarding so much of such adjustment as results in a decrease in the amount of the imputed underpayment.

(3) Adjustments separately netted by category

For purposes of paragraph (1)(A), partnership adjustments for any reviewed year shall first be separately determined (and netted as appropriate) within each category of items that are required to be taken into account separately under section 702(a) or other provision of this title.

(4) Limitation on adjustments that may be taken into account

If any adjustment would (but for this paragraph)—

(A) result in a decrease in the amount of the imputed underpayment, and

(B) could be subject to any additional limitation under the provisions of this title (or not allowed, in whole or in part, against ordinary income) if such adjustment were taken into account by any person,

such adjustment shall not be taken into account under paragraph (1)(A) except to the extent otherwise provided by the Secretary.

(c) Modification of imputed underpayments

(1) In general

The Secretary shall establish procedures under which the imputed underpayment amount may be modified consistent with the requirements of this subsection.

(2) Procedures for partners to take adjustments into account

(A) Amended returns of partners

Such procedures shall provide that if—

(i) one or more partners file returns for the taxable year of the partners which includes the end of the reviewed year of the partnership (and for any taxable year with respect to which any tax attribute is affected by reason of any adjustment referred to in clause (ii)),

(ii) such returns take into account all adjustments under subsection (a) properly allocable to such partners (and the effect of such adjustments on any tax attributes), and

(iii) payment of any tax due is included with such returns,

then the imputed underpayment amount shall be determined without regard to the portion of the adjustments so taken into account.

(B) Alternative procedure to filing amended returns

Such procedures shall provide that, with respect to any partner referred to in subparagraph (A), the requirements of subparagraph (A) shall be treated as satisfied with respect to adjustments properly allocable to such partner if, in lieu of filing the returns described in such subparagraph—

(i) the amounts described in subparagraph (A)(iii) are paid by the partner,

(ii) the partner agrees to take into account, in the form and manner prescribed by the Secretary, the adjustments to the tax attributes of such partner referred to in subparagraph (A)(ii), and

(iii) such partner provides, in the form and manner specified by the Secretary (including, if the Secretary so specifies, in the same form as on an amended return), such information as the Secretary may require to carry out this subparagraph.

(C) Reallocation of distributive share

In the case of any adjustment which reallocates the distributive share of any item from one partner to another, this paragraph shall apply with respect to any such partner only if the requirements of subparagraph (A) or (B) are satisfied with respect to all partners affected by such adjustment.

(D) Application of statute of limitations

In the case of adjustments referred to in subparagraph (A)(ii), sections 6501 and 6511 shall not apply with respect to any return filed for purposes of subparagraph (A)(i) or any amount paid under subparagraph (A)(iii) or (B)(i).

(E) Adjustments to tax attributes binding for affected taxable years of partner

The adjustments to the tax attributes of any partner provided for in subparagraph (A)(ii) or (B)(ii) shall be binding with respect to the taxable year of the partner which includes the end of the reviewed year of the partnership and any taxable years for which any tax attribute is affected by such adjustment. Any failure to so treat any such tax attribute shall be treated for purposes of this title in the same manner as a failure to treat a partnership-related item in a manner which is consistent with the treatment of such item on the partnership return within the meaning of section 6222.

(F) 1 Application to partnerships and S corporations in tiered structures

(i) In general

In the case of any partnership any partner of which is a partnership, subparagraph (A) or (B) may apply with respect to any partner (hereafter in this subparagraph referred to as the "relevant partner") in the chain of ownership of such partnerships if—

(I) such information as the Secretary may require is furnished to the Secretary for purposes of carrying out this paragraph with respect to such partnerships (including any information the Secretary may require with respect to any chain of ownership of the relevant partner), and

(II) to such extent as the Secretary may require, each partnership in the chain of ownership between the relevant partner and the audited partnership satisfies the requirements of subparagraph (A) or (B).

(ii) Treatment of S corporations

For purposes of clause (i), an S corporation and its shareholders shall be treated in the same manner as a partnership and its partners.

(F) 1 Adjustments not treated as amended return

An administrative adjustment request under section 6227 and a partnership adjustment tracking report under section 6226(b)(4)(A) shall not be treated as a return for purposes of this paragraph.

(3) Tax-exempt partners

Such procedures shall provide for determining the imputed underpayment without regard to the portion of the adjustment that the partnership demonstrates is allocable to a partner that would not owe tax by reason of its status as a tax-exempt entity (as defined in section 168(h)(2)).

(4) Modification of applicable highest tax rates

(A) In general

Such procedures shall provide for taking into account a rate of tax lower than the rate of tax described in subsection (b)(1)(A) with respect to any portion of the adjustment that the partnership demonstrates is allocable to a partner which—

(i) is a C corporation, or

(ii) in the case of a capital gain or qualified dividend, is an individual.

In no event shall the lower rate determined under the preceding sentence be less than the highest rate in effect with respect to the income and taxpayer described in clause (i) or clause (ii), as the case may be. For purposes of clause (ii), an S corporation shall be treated as an individual.

(B) Portion of imputed underpayment to which lower rate applies

(i) In general

Except as provided in clause (ii), the portion of the imputed underpayment to which the lower rate applies with respect to a partner under subparagraph (A) shall be determined by reference to the partners' distributive share of items to which the imputed underpayment relates.

(ii) Rule in case of varied treatment of items among partners

If the imputed underpayment is attributable to the adjustment of more than 1 item, and any partner's distributive share of such items is not the same with respect to all such items, then the portion of the imputed underpayment to which the lower rate applies with respect to a partner under subparagraph (A) shall be determined by reference to the amount which would have been the partner's distributive share of net gain or loss if the partnership had sold all of its assets at their fair market value as of the close of the reviewed year of the partnership.

(5) Certain passive losses of publicly traded partnerships

(A) In general

In the case of a publicly traded partnership (as defined in section 469(k)(2)), such procedures shall provide—

(i) for determining the imputed underpayment without regard to the portion of the adjustment that the partnership demonstrates is attributable to a net decrease in a specified passive activity loss which is allocable to a specified partner, and

(ii) for the partnership to take such net decrease into account as an adjustment in the adjustment year with respect to the specified partners to which such net decrease relates.

(B) Specified passive activity loss

For purposes of this paragraph, the term "specified passive activity loss" means, with respect to any specified partner of such publicly traded partnership, the lesser of—

(i) the passive activity loss of such partner which is separately determined with respect to such partnership under section 469(k) with respect to such partner's taxable year in which or with which the reviewed year of such partnership ends, or

(ii) such passive activity loss so determined with respect to such partner's taxable year in which or with which the adjustment year of such partnership ends.

(C) Specified partner

For purposes of this paragraph, the term "specified partner" means any person if such person—

(i) is a partner of the publicly traded partnership referred to in subparagraph (A),

(ii) is described in section 469(a)(2), and

(iii) has a specified passive activity loss with respect to such publicly traded partnership,

with respect to each taxable year of such person which is during the period beginning with the taxable year of such person in which or with which the reviewed year of such publicly traded partnership ends and ending with the taxable year of such person in which or with which the adjustment year of such publicly traded partnership ends.

(6) Other procedures for modification of imputed underpayment

The Secretary may by regulations or guidance provide for additional procedures to modify imputed underpayment amounts on the basis of such other factors as the Secretary determines are necessary or appropriate to carry out the purposes of this subsection.

(7) Year and day for submission to Secretary

Anything required to be filed or submitted under this subsection shall be submitted to the Secretary not later than the close of the 270-day period beginning on the date on which the notice of a proposed partnership adjustment is mailed under section 6231 unless such period is extended with the consent of the Secretary.

(8) Decision of Secretary

Any modification of the imputed underpayment amount under this subsection shall be made only upon approval of such modification by the Secretary.

(9) Modification of adjustments not resulting in an imputed underpayment

The Secretary shall establish procedures under which the adjustments described in subsection (a)(2) may be modified in such manner as the Secretary determines appropriate.

(d) Definitions

For purposes of this subchapter—

(1) Reviewed year

The term "reviewed year" means the partnership taxable year to which the item being adjusted relates.

(2) Adjustment year

The term "adjustment year" means the partnership taxable year in which—

(A) in the case of an adjustment pursuant to the decision of a court in a proceeding brought under section 6234, such decision becomes final,

(B) in the case of an administrative adjustment request under section 6227, such administrative adjustment request is made, or

(C) in any other case, notice of the final partnership adjustment is mailed under section 6231.

(Added Pub. L. 114–74, title XI, §1101(c)(1), Nov. 2, 2015, 129 Stat. 628; amended Pub. L. 114–113, div. Q, title IV, §411(a), Dec. 18, 2015, 129 Stat. 3121; Pub. L. 115–141, div. U, title II, §§202, 203(a), 206(b), (p)(1), Mar. 23, 2018, 132 Stat. 1173, 1174, 1178, 1182.)

Editorial Notes

Prior Provisions

A prior section 6225, added Pub. L. 97–248, title IV, §402(a), Sept. 3, 1982, 96 Stat. 652; amended Pub. L. 105–34, title XII, §1239(a), Aug. 5, 1997, 111 Stat. 1027, allowing assessments to be made only after partnership level proceedings were completed, was repealed by Pub. L. 114–74, title XI, §1101(a), Nov. 2, 2015, 129 Stat. 625.

Amendments

2018—Subsec. (a). Pub. L. 115–141, §202(c)(1), amended subsec. (a) generally. Prior to amendment, subsec. (a) related to adjustment by the Secretary in the amount of any item of income, gain, loss, deduction, or credit of a partnership, or any partner's distributive share thereof.

Subsec. (b). Pub. L. 115–141, §202(a), amended subsec. (b) generally. Prior to amendment, subsec. (b) consisted of pars. (1) and (2) relating to determination of imputed underpayments in general and adjustments to distributive shares of partners not netted, respectively.

Subsec. (c)(2). Pub. L. 115–141, §203(a), amended par. (2) generally. Prior to amendment, par. (2) related to amended returns of partners.

Subsec. (c)(2)(F). Pub. L. 115–141, §206(b), added subpar. (F) relating to adjustments not treated as amended return.

Subsec. (c)(3). Pub. L. 115–141, §202(b)(1), substituted "without regard to the portion of the adjustment" for "without regard to the portion thereof".

Subsec. (c)(4)(A). Pub. L. 115–141, §202(b)(2), substituted "with respect to any portion of the adjustment" for "with respect to any portion of the imputed underpayment" in introductory provisions.

Subsec. (c)(5)(A)(i). Pub. L. 115–141, §202(b)(3), substituted "without regard to the portion of the adjustment" for "without regard to the portion thereof".

Subsec. (c)(7). Pub. L. 115–141, §206(p)(1), substituted "filed or submitted under this subsection" for "submitted pursuant to paragraph (1)".

Subsec. (c)(9). Pub. L. 115–141, §202(c)(2), added par. (9).

2015—Subsec. (c)(4)(A)(i). Pub. L. 114–113, §411(a)(1), struck out "in the case of ordinary income," before "is a C corporation".

Subsec. (c)(5) to (8). Pub. L. 114–113, §411(a)(2), added par. (5) and redesignated former pars. (5) to (7) as (6) to (8), respectively.

Statutory Notes and Related Subsidiaries

Effective Date of 2018 Amendment

Amendment by Pub. L. 115–141 effective as if included in section 1101 of Pub. L. 114–74, see section 207 of Pub. L. 115–141, set out as a note under section 6031 of this title.

Effective Date of 2015 Amendment

Amendment by Pub. L. 114–113 effective as if included in section 1101 of Pub. L. 114–74, see section 411(e) of Pub. L. 114–113, set out as a note under section 6031 of this title.

Effective Date

Section applicable to returns filed for partnership taxable years beginning after Dec. 31, 2017, with certain exceptions, see section 1101(g) of Pub. L. 114–74, set out as a note under section 6221 of this title.

1 So in original. Two subpars. (F) have been enacted.
26 U.S.C. § 152 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 1 / Section 152: Dependent defined
Dependent defined
Status: in_force

(a) In general

For purposes of this subtitle, the term "dependent" means—

(1) a qualifying child, or

(2) a qualifying relative.

(b) Exceptions

For purposes of this section—

(1) Dependents ineligible

If an individual is a dependent of a taxpayer for any taxable year of such taxpayer beginning in a calendar year, such individual shall be treated as having no dependents for any taxable year of such individual beginning in such calendar year.

(2) Married dependents

An individual shall not be treated as a dependent of a taxpayer under subsection (a) if such individual has made a joint return with the individual's spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins.

(3) Citizens or nationals of other countries

(A) In general

The term "dependent" does not include an individual who is not a citizen or national of the United States unless such individual is a resident of the United States or a country contiguous to the United States.

(B) Exception for adopted child

Subparagraph (A) shall not exclude any child of a taxpayer (within the meaning of subsection (f)(1)(B)) from the definition of "dependent" if—

(i) for the taxable year of the taxpayer, the child has the same principal place of abode as the taxpayer and is a member of the taxpayer's household, and

(ii) the taxpayer is a citizen or national of the United States.

(c) Qualifying child

For purposes of this section—

(1) In general

The term "qualifying child" means, with respect to any taxpayer for any taxable year, an individual—

(A) who bears a relationship to the taxpayer described in paragraph (2),

(B) who has the same principal place of abode as the taxpayer for more than one-half of such taxable year,

(C) who meets the age requirements of paragraph (3),

(D) who has not provided over one-half of such individual's own support for the calendar year in which the taxable year of the taxpayer begins, and

(E) who has not filed a joint return (other than only for a claim of refund) with the individual's spouse under section 6013 for the taxable year beginning in the calendar year in which the taxable year of the taxpayer begins.

(2) Relationship

For purposes of paragraph (1)(A), an individual bears a relationship to the taxpayer described in this paragraph if such individual is—

(A) a child of the taxpayer or a descendant of such a child, or

(B) a brother, sister, stepbrother, or stepsister of the taxpayer or a descendant of any such relative.

(3) Age requirements

(A) In general

For purposes of paragraph (1)(C), an individual meets the requirements of this paragraph if such individual is younger than the taxpayer claiming such individual as a qualifying child and—

(i) has not attained the age of 19 as of the close of the calendar year in which the taxable year of the taxpayer begins, or

(ii) is a student who has not attained the age of 24 as of the close of such calendar year.

(B) Special rule for disabled

In the case of an individual who is permanently and totally disabled (as defined in section 22(e)(3)) at any time during such calendar year, the requirements of subparagraph (A) shall be treated as met with respect to such individual.

(4) Special rule relating to 2 or more who can claim the same qualifying child

(A) In general

Except as provided in subparagraphs (B) and (C), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers for a taxable year beginning in the same calendar year, such individual shall be treated as the qualifying child of the taxpayer who is—

(i) a parent of the individual, or

(ii) if clause (i) does not apply, the taxpayer with the highest adjusted gross income for such taxable year.

(B) More than 1 parent claiming qualifying child

If the parents claiming any qualifying child do not file a joint return together, such child shall be treated as the qualifying child of—

(i) the parent with whom the child resided for the longest period of time during the taxable year, or

(ii) if the child resides with both parents for the same amount of time during such taxable year, the parent with the highest adjusted gross income.

(C) No parent claiming qualifying child

If the parents of an individual may claim such individual as a qualifying child but no parent so claims the individual, such individual may be claimed as the qualifying child of another taxpayer but only if the adjusted gross income of such taxpayer is higher than the highest adjusted gross income of any parent of the individual.

(d) Qualifying relative

For purposes of this section—

(1) In general

The term "qualifying relative" means, with respect to any taxpayer for any taxable year, an individual—

(A) who bears a relationship to the taxpayer described in paragraph (2),

(B) whose gross income for the calendar year in which such taxable year begins is less than the exemption amount (as defined in section 151(d)),

(C) with respect to whom the taxpayer provides over one-half of the individual's support for the calendar year in which such taxable year begins, and

(D) who is not a qualifying child of such taxpayer or of any other taxpayer for any taxable year beginning in the calendar year in which such taxable year begins.

(2) Relationship

For purposes of paragraph (1)(A), an individual bears a relationship to the taxpayer described in this paragraph if the individual is any of the following with respect to the taxpayer:

(A) A child or a descendant of a child.

(B) A brother, sister, stepbrother, or stepsister.

(C) The father or mother, or an ancestor of either.

(D) A stepfather or stepmother.

(E) A son or daughter of a brother or sister of the taxpayer.

(F) A brother or sister of the father or mother of the taxpayer.

(G) A son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-law, or sister-in-law.

(H) An individual (other than an individual who at any time during the taxable year was the spouse, determined without regard to section 7703, of the taxpayer) who, for the taxable year of the taxpayer, has the same principal place of abode as the taxpayer and is a member of the taxpayer's household.

(3) Special rule relating to multiple support agreements

For purposes of paragraph (1)(C), over one-half of the support of an individual for a calendar year shall be treated as received from the taxpayer if—

(A) no one person contributed over one-half of such support,

(B) over one-half of such support was received from 2 or more persons each of whom, but for the fact that any such person alone did not contribute over one-half of such support, would have been entitled to claim such individual as a dependent for a taxable year beginning in such calendar year,

(C) the taxpayer contributed over 10 percent of such support, and

(D) each person described in subparagraph (B) (other than the taxpayer) who contributed over 10 percent of such support files a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such person will not claim such individual as a dependent for any taxable year beginning in such calendar year.

(4) Special rule relating to income of handicapped dependents

(A) In general

For purposes of paragraph (1)(B), the gross income of an individual who is permanently and totally disabled (as defined in section 22(e)(3)) at any time during the taxable year shall not include income attributable to services performed by the individual at a sheltered workshop if—

(i) the availability of medical care at such workshop is the principal reason for the individual's presence there, and

(ii) the income arises solely from activities at such workshop which are incident to such medical care.

(B) Sheltered workshop defined

For purposes of subparagraph (A), the term "sheltered workshop" means a school—

(i) which provides special instruction or training designed to alleviate the disability of the individual, and

(ii) which is operated by an organization described in section 501(c)(3) and exempt from tax under section 501(a), or by a State, a possession of the United States, any political subdivision of any of the foregoing, the United States, or the District of Columbia.

(5) Special rules for support

(A) In general

For purposes of this subsection—

(i) payments to a spouse of alimony or separate maintenance payments shall not be treated as a payment by the payor spouse for the support of any dependent, and

(ii) in the case of the remarriage of a parent, support of a child received from the parent's spouse shall be treated as received from the parent.

(B) Alimony or separate maintenance payment

For purposes of subparagraph (A), the term "alimony or separate maintenance payment" means any payment in cash if—

(i) such payment is received by (or on behalf of) a spouse under a divorce or separation instrument (as defined in section 121(d)(3)(C)),

(ii) in the case of an individual legally separated from the individual's spouse under a decree of divorce or of separate maintenance, the payee spouse and the payor spouse are not members of the same household at the time such payment is made, and

(iii) there is no liability to make any such payment for any period after the death of the payee spouse and there is no liability to make any payment (in cash or property) as a substitute for such payments after the death of the payee spouse.

(e) Special rule for divorced parents, etc.

(1) In general

Notwithstanding subsection (c)(1)(B), (c)(4), or (d)(1)(C), if—

(A) a child receives over one-half of the child's support during the calendar year from the child's parents—

(i) who are divorced or legally separated under a decree of divorce or separate maintenance,

(ii) who are separated under a written separation agreement, or

(iii) who live apart at all times during the last 6 months of the calendar year, and—

(B) such child is in the custody of 1 or both of the child's parents for more than one-half of the calendar year, such child shall be treated as being the qualifying child or qualifying relative of the noncustodial parent for a calendar year if the requirements described in paragraph (2) or (3) are met.

(2) Exception where custodial parent releases claim to exemption for the year

For purposes of paragraph (1), the requirements described in this paragraph are met with respect to any calendar year if—

(A) the custodial parent signs a written declaration (in such manner and form as the Secretary may by regulations prescribe) that such custodial parent will not claim such child as a dependent for any taxable year beginning in such calendar year, and

(B) the noncustodial parent attaches such written declaration to the noncustodial parent's return for the taxable year beginning during such calendar year.

(3) Exception for certain pre-1985 instruments

(A) In general

For purposes of paragraph (1), the requirements described in this paragraph are met with respect to any calendar year if—

(i) a qualified pre-1985 instrument between the parents applicable to the taxable year beginning in such calendar year provides that the noncustodial parent shall be entitled to any deduction allowable under section 151 for such child, and

(ii) the noncustodial parent provides at least $600 for the support of such child during such calendar year.

For purposes of this subparagraph, amounts expended for the support of a child or children shall be treated as received from the noncustodial parent to the extent that such parent provided amounts for such support.

(B) Qualified pre-1985 instrument

For purposes of this paragraph, the term "qualified pre-1985 instrument" means any decree of divorce or separate maintenance or written agreement—

(i) which is executed before January 1, 1985,

(ii) which on such date contains the provision described in subparagraph (A)(i), and

(iii) which is not modified on or after such date in a modification which expressly provides that this paragraph shall not apply to such decree or agreement.

(4) Custodial parent and noncustodial parent

For purposes of this subsection—

(A) Custodial parent

The term "custodial parent" means the parent having custody for the greater portion of the calendar year.

(B) Noncustodial parent

The term "noncustodial parent" means the parent who is not the custodial parent.

(5) Exception for multiple-support agreement

This subsection shall not apply in any case where over one-half of the support of the child is treated as having been received from a taxpayer under the provision of subsection (d)(3).

(6) Special rule for support received from new spouse of parent

For purposes of this subsection, in the case of the remarriage of a parent, support of a child received from the parent's spouse shall be treated as received from the parent.

(f) Other definitions and rules

For purposes of this section—

(1) Child defined

(A) In general

The term "child" means an individual who is—

(i) a son, daughter, stepson, or stepdaughter of the taxpayer, or

(ii) an eligible foster child of the taxpayer.

(B) Adopted child

In determining whether any of the relationships specified in subparagraph (A)(i) or paragraph (4) exists, a legally adopted individual of the taxpayer, or an individual who is lawfully placed with the taxpayer for legal adoption by the taxpayer, shall be treated as a child of such individual by blood.

(C) Eligible foster child

For purposes of subparagraph (A)(ii), the term "eligible foster child" means an individual who is placed with the taxpayer by an authorized placement agency or by judgment, decree, or other order of any court of competent jurisdiction.

(2) Student defined

The term "student" means an individual who during each of 5 calendar months during the calendar year in which the taxable year of the taxpayer begins—

(A) is a full-time student at an educational organization described in section 170(b)(1)(A)(ii), or

(B) is pursuing a full-time course of institutional on-farm training under the supervision of an accredited agent of an educational organization described in section 170(b)(1)(A)(ii) or of a State or political subdivision of a State.

(3) Determination of household status

An individual shall not be treated as a member of the taxpayer's household if at any time during the taxable year of the taxpayer the relationship between such individual and the taxpayer is in violation of local law.

(4) Brother and sister

The terms "brother" and "sister" include a brother or sister by the half blood.

(5) Special support test in case of students

For purposes of subsections (c)(1)(D) and (d)(1)(C), in the case of an individual who is—

(A) a child of the taxpayer, and

(B) a student,

amounts received as scholarships for study at an educational organization described in section 170(b)(1)(A)(ii) shall not be taken into account.

(6) Treatment of missing children

(A) In general

Solely for the purposes referred to in subparagraph (B), a child of the taxpayer—

(i) who is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of the family of such child or the taxpayer, and

(ii) who had, for the taxable year in which the kidnapping occurred, the same principal place of abode as the taxpayer for more than one-half of the portion of such year before the date of the kidnapping,

shall be treated as meeting the requirement of subsection (c)(1)(B) with respect to a taxpayer for all taxable years ending during the period that the child is kidnapped.

(B) Purposes

Subparagraph (A) shall apply solely for purposes of determining—

(i) the deduction under section 151(c),

(ii) the credit under section 24 (relating to child tax credit),

(iii) whether an individual is a surviving spouse or a head of a household (as such terms are defined in section 2), and

(iv) the earned income credit under section 32.

(C) Comparable treatment of certain qualifying relatives

For purposes of this section, a child of the taxpayer—

(i) who is presumed by law enforcement authorities to have been kidnapped by someone who is not a member of the family of such child or the taxpayer, and

(ii) who was (without regard to this paragraph) a qualifying relative of the taxpayer for the portion of the taxable year before the date of the kidnapping,

shall be treated as a qualifying relative of the taxpayer for all taxable years ending during the period that the child is kidnapped.

(D) Termination of treatment

Subparagraphs (A) and (C) shall cease to apply as of the first taxable year of the taxpayer beginning after the calendar year in which there is a determination that the child is dead (or, if earlier, in which the child would have attained age 18).

(7) Cross references

For provision treating child as dependent of both parents for purposes of certain provisions, see sections 105(b), 132(h)(2)(B), and 213(d)(5).

(Aug. 16, 1954, ch. 736, 68A Stat. 43; Aug. 9, 1955, ch. 693, §2, 69 Stat. 626; Pub. L. 85–866, title I, §4(a)–(c), Sept. 2, 1958, 72 Stat. 1607; Pub. L. 86–376, §1(a), Sept. 23, 1959, 73 Stat. 699; Pub. L. 90–78, §1, Aug. 31, 1967, 81 Stat. 191; Pub. L. 91–172, title IX, §912(a), Dec. 30, 1969, 83 Stat. 722; Pub. L. 92–580, §1(a), Oct. 27, 1972, 86 Stat. 1276; Pub. L. 94–455, title XIX, §§1901(a)(24), (b)(7)(B), (8)(A), 1906(b)(13)(A), title XXI, §2139(a), Oct. 4, 1976, 90 Stat. 1767, 1794, 1834, 1932; Pub. L. 98–369, div. A, title IV, §§423(a), 482(b)(2), July 18, 1984, 98 Stat. 799, 848; Pub. L. 99–514, title I, §104(b)(1)(B), (3), title XIII, §1301(j)(8), Oct. 22, 1986, 100 Stat. 2104, 2105, 2658; Pub. L. 108–311, title II, §201, Oct. 4, 2004, 118 Stat. 1169; Pub. L. 109–135, title IV, §404(a), Dec. 21, 2005, 119 Stat. 2632; Pub. L. 110–351, title V, §501(a), (b), (c)(2), Oct. 7, 2008, 122 Stat. 3979, 3980; Pub. L. 115–97, title I, §11051(b)(3)(B), Dec. 22, 2017, 131 Stat. 2089.)

Inflation Adjusted Items for Certain Years

For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title.

Editorial Notes

Amendments

2017—Subsec. (d)(5). Pub. L. 115–97 amended par. (5) generally. Prior to amendment, text read as follows: "For purposes of this subsection—

"(A) payments to a spouse which are includible in the gross income of such spouse under section 71 or 682 shall not be treated as a payment by the payor spouse for the support of any dependent, and

"(B) in the case of the remarriage of a parent, support of a child received from the parent's spouse shall be treated as received from the parent."

2008—Subsec. (c)(1)(E). Pub. L. 110–351, §501(b), added subpar. (E).

Subsec. (c)(3)(A). Pub. L. 110–351, §501(a), inserted "is younger than the taxpayer claiming such individual as a qualifying child and" after "such individual" in introductory provisions.

Subsec. (c)(4). Pub. L. 110–351, §501(c)(2)(B)(ii), substituted "who can claim the same" for "claiming" in heading.

Subsec. (c)(4)(A). Pub. L. 110–351, §501(c)(2)(B)(i), substituted "Except as provided in subparagraphs (B) and (C), if (but for this paragraph) an individual may be claimed as a qualifying child by 2 or more taxpayers" for "Except as provided in subparagraph (B), if (but for this paragraph) an individual may be and is claimed as a qualifying child by 2 or more taxpayers" in introductory provisions.

Subsec. (c)(4)(C). Pub. L. 110–351, §501(c)(2)(A), added subpar. (C).

2005—Subsec. (e). Pub. L. 109–135 amended heading and text of subsec. (e) generally. Prior to amendment, text consisted of pars. (1) to (4) relating to special rule for divorced parents, requirements for divorced parents, definitions of custodial and noncustodial parent, and exception for multiple-support agreements.

2004—Pub. L. 108–311 reenacted section catchline without change and amended text generally. Prior to amendment, section consisted of subsecs. (a) to (e) relating to general definition of dependent, rules relating to general definition, multiple support agreements, special support test in case of students, and support test in case of child of divorced parents, etc., respectively.

1986—Subsec. (a)(9). Pub. L. 99–514, §1301(j)(8), substituted "section 7703" for "section 143".

Subsec. (d)(2). Pub. L. 99–514, §104(b)(3), substituted "section 151(c)(4)" for "section 151(e)(4)".

Subsec. (e)(1)(A). Pub. L. 99–514, §104(b)(1)(B), substituted "section 151(c)(3)" for "section 151(e)(3)".

1984—Subsec. (e). Pub. L. 98–369, §423(a), amended subsec. (e) generally, and in substantially revising support test provisions, enacted par. (1) custodial parent exemption, former par. (1) declaring the general rule that where a child received over one-half of his calendar year support from parents who were divorced or legally separated under a decree of divorce or separate maintenance, or were separated under a written separation agreement and the child was in the custody of one or both parents for more than one-half of the calendar year, the child would be treated as receiving over half of his support from the parent having custody for a greater portion of the calendar year unless treated under special rule provision as having received over half of his support from the parent not having custody; enacted par. (2) release of custodial parent exemption for the year, former par. (2) declaring the special rule that parent without custody would be deemed as furnishing over half of the support where the decree of divorce or separate maintenance, or written agreement, covering the taxable year, provided that parent without custody should be entitled to the section 151 deduction for the child and such parent provided at least $600 calendar year support, or alternatively, such parent without custody provided $1,200 or more calendar year support and the parent with custody did not establish more support of the child than the parent without custody; redesignated as par. (3) former par. (4) provision respecting exception for multiple-support agreement, deleting former par. (3) respecting requirement of an itemized statement of expenditures to resolve more support claims; added par. (4) respecting exception for certain pre-1985 instruments; added par. (5) enunciating special rule for support received from new spouse of parent, deleting former par. (5) regulations prescription provision; and added par. (6) cross reference provision.

Subsec. (e)(6). Pub. L. 98–369, §482(b)(2), substituted "section 213(d)(5)" for "section 213(d)(4)".

1976—Subsec. (a)(9). Pub. L. 94–455, §1901(b)(7)(B), substituted "section 143" for "section 153".

Subsec. (a)(10). Pub. L. 94–455, §1901(a)(24)(A), struck out par. (10) relating to descendents of a taxpayer, who were members of taxpayer's household, before receiving institutional care.

Subsec. (b)(3). Pub. L. 94–455, §1901(a)(24)(B), among other changes struck out "of the Canal Zone, or of the Republic of Panama" after "country contiguous to the United States," and provisions relating to children born or adopted in Philippines.

Subsec. (c)(4). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Subsec. (d). Pub. L. 94–455, §1901(b)(8)(A), substituted "organization described in section 170(b)(1)(A)(ii)" for "institution (as defined in section 151(e)(4))".

Subsec. (e)(2)(B)(i). Pub. L. 94–455, §2139(a), substituted "each" for "all".

Subsec. (e)(3), (5). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

1972—Subsec. (b)(3). Pub. L. 92–580 substituted "citizen or national of the United States" for "citizen of the United States" in two places.

1969—Subsec. (b)(2). Pub. L. 91–172 inserted reference to foster children who satisfy requirements of subsec. (a)(9) of this section.

1967—Subsec. (a). Pub. L. 90–78, §1(b), inserted "or (e)" after "subsection (c)".

Subsec. (e). Pub. L. 90–78, §1(a), added subsec. (e).

1959—Subsec. (b)(2). Pub. L. 86–376 provided that a child who is a member of an individual's household if placed with such individual by an authorized placement agency for legal adoption by such individual shall be treated as a child by blood.

1958—Subsec. (a)(9). Pub. L. 85–866, §4(a), inserted "(other than an individual who at any time during the taxable year was the spouse, determined without regard to section 153, of the taxpayer)".

Subsec. (b)(3). Pub. L. 85–866, §4(b), among other changes, struck out provision that "dependent" does not include any individual who is not a United States citizen unless such individual is a resident of United States or of a contiguous country, or of Canal Zone or Panama, and inserted provision barring exclusion from definition of "dependent" any child of taxpayer, legally adopted by him, if, for taxable year of taxpayer, child's principal place of abode is taxpayer's home and child is member of taxpayer's household, if taxpayer is United States citizen.

Subsec. (b)(5). Pub. L. 85–866, §4(c), added par. (5).

1955—Subsec. (b)(3). Act Aug. 9, 1955, substituted "January 1, 1956" for "July 5, 1946".

Statutory Notes and Related Subsidiaries

Effective Date of 2017 Amendment

Amendment by Pub. L. 115–97 applicable to any divorce or separation instrument (as defined in former section 71(b)(2) of this title as in effect before Dec. 22, 2017) executed after Dec. 31, 2018, and to such instruments executed on or before Dec. 31, 2018, and modified after Dec. 31, 2018, if the modification expressly provides that the amendment made by section 11051 of Pub. L. 115–97 applies to such modification, see section 11051(c) of Pub. L. 115–97, set out as a note under section 61 of this title.

Effective Date of 2008 Amendment

Amendment by Pub. L. 110–351 applicable to taxable years beginning after Dec. 31, 2008, see section 501(d) of Pub. L. 110–351, set out as an Effective and Termination Dates of 2008 Amendment note under section 24 of this title.

Effective Date of 2005 Amendment

Amendment by Pub. L. 109–135 effective as if included in the provisions of the Working Families Tax Relief Act of 2004, Pub. L. 108–311, to which such amendment relates, see section 404(d) of Pub. L. 109–135, set out as a note under section 21 of this title.

Effective Date of 2004 Amendment

Amendment by Pub. L. 108–311 applicable to taxable years beginning after Dec. 31, 2004, see section 208 of Pub. L. 108–311, set out as a note under section 2 of this title.

Effective Date of 1986 Amendment

Amendment by section 104(b)(1)(B), (3) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 151(a) of Pub. L. 99–514, set out as a note under section 1 of this title.

Amendment by section 1301(j)(8) of Pub. L. 99–514 applicable to bonds issued after Aug. 15, 1986, except as otherwise provided, see sections 1311 to 1318 of Pub. L. 99–514, set out as an Effective Date; Transitional Rules note under section 141 of this title.

Effective Date of 1984 Amendment

Amendment by section 423(a) of Pub. L. 98–369 applicable to taxable years beginning after Dec. 31, 1984, see section 423(d) of Pub. L. 98–369, set out as a note under section 2 of this title.

Amendment by section 482(b)(2) of Pub. L. 98–369 applicable to taxable years beginning after Dec. 31, 1983, see section 482(c) of Pub. L. 98–369, set out as a note under section 213 of this title.

Effective Date of 1976 Amendment

Amendment by section 1901(a)(24), (b)(7)(B), (8)(A) of Pub. L. 94–455 applicable with respect to taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94–455, set out as a note under section 2 of this title.

Pub. L. 94–455, title XXI, §2139(b), Oct. 4, 1976, 90 Stat. 1932, provided that: "The amendment made by this section [amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [Oct. 4, 1976]."

Effective Date of 1972 Amendment

Pub. L. 92–580, §1(c), Oct. 27, 1972, 86 Stat. 1276, provided that: "The amendments made by subsections (a) [amending this section] and (b) [amending section 873 of this title] shall apply to taxable years beginning after December 31, 1971."

Effective Date of 1969 Amendment

Pub. L. 91–172, title IX, §912(b), Dec. 30, 1969, 83 Stat. 722, provided that: "The amendment made by subsection (a) of this section [amending this section] shall apply to taxable years beginning after December 31, 1969."

Effective Date of 1967 Amendment

Pub. L. 90–78, §2, Aug. 31, 1967, 81 Stat. 192, provided that: "The amendments made by the first section of this Act [amending this section] shall apply with respect to taxable years beginning after December 31, 1966."

Effective Date of 1959 Amendment

Pub. L. 86–376, §1(b), Sept. 23, 1959, 73 Stat. 699, provided that: "The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1958."

Effective Date of 1958 Amendment

Amendment by section 4(a), (c) of Pub. L. 85–866 applicable to taxable years beginning after Dec. 31, 1953, and ending after Aug. 16, 1954, see section 1(c)(1) of Pub. L. 85–866, set out as a note under section 165 of this title.

Pub. L. 85–866, §4(d), Sept. 2, 1958, 72 Stat. 1607, provided that: "The amendment made by subsection (b) [amending this section] shall apply with respect to taxable years beginning after December 31, 1957."

Effective Date of 1955 Amendment

Act Aug. 9, 1955, ch. 693, §3(b), 69 Stat. 626, provided that: "The amendment made by section 2 of this Act [amending this section] shall apply with respect to taxable years beginning after December 31, 1953, and ending after August 16, 1954."
26 U.S.C. § 291 (2024) — Title 26: INTERNAL REVENUE CODE / Chapter 1 / Section 291: Special rules relating to corporate preference items
Special rules relating to corporate preference items
Status: in_force

(a) Reduction in certain preference items, etc.

For purposes of this subtitle, in the case of a corporation—

(1) Section 1250 capital gain treatment

In the case of section 1250 property which is disposed of during the taxable year, 20 percent of the excess (if any) of—

(A) the amount which would be treated as ordinary income if such property was section 1245 property, over

(B) the amount treated as ordinary income under section 1250 (determined without regard to this paragraph),

shall be treated as gain which is ordinary income under section 1250 and shall be recognized notwithstanding any other provision of this title. Under regulations prescribed by the Secretary, the provisions of this paragraph shall not apply to the disposition of any property to the extent section 1250(a) does not apply to such disposition by reason of section 1250(d).

(2) Reduction in percentage depletion

In the case of iron ore and coal (including lignite), the amount allowable as a deduction under section 613 with respect to any property (as defined in section 614) shall be reduced by 20 percent of the amount of the excess (if any) of—

(A) the amount of the deduction allowable under section 613 for the taxable year (determined without regard to this paragraph), over

(B) the adjusted basis of the property at the close of the taxable year (determined without regard to the depletion deduction for the taxable year).

(3) Certain financial institution preference items

The amount allowable as a deduction under this chapter (determined without regard to this section) with respect to any financial institution preference item shall be reduced by 20 percent.

(4) Amortization of pollution control facilities

If an election is made under section 169 with respect to any certified pollution control facility, the amortizable basis of such facility for purposes of such section shall be reduced by 20 percent.

(b) Special rules for treatment of intangible drilling costs and mineral exploration and development costs

For purposes of this subtitle, in the case of a corporation—

(1) In general

The amount allowable as a deduction for any taxable year (determined without regard to this section)—

(A) under section 263(c) in the case of an integrated oil company, or

(B) under section 616(a) or 617(a),

shall be reduced by 30 percent.

(2) Amortization of amounts not allowable as deductions under paragraph (1)

The amount not allowable as a deduction under section 263(c), 616(a), or 617(a) (as the case may be) for any taxable year by reason of paragraph (1) shall be allowable as a deduction ratably over the 60-month period beginning with the month in which the costs are paid or incurred.

(3) Dispositions

For purposes of section 1254, any deduction under paragraph (2) shall be treated as a deduction allowable under section 263(c), 616(a), or 617(a) (whichever is appropriate).

(4) Integrated oil company defined

For purposes of this subsection, the term "integrated oil company" means, with respect to any taxable year, any producer of crude oil to whom subsection (c) of section 613A does not apply by reason of paragraph (2) or (4) of section 613A(d).

(5) Coordination with cost depletion

The portion of the adjusted basis of any property which is attributable to amounts to which paragraph (1) applied shall not be taken into account for purposes of determining depletion under section 611.

(c) Special rules relating to pollution control facilities

For purposes of this subtitle—

(1) Accelerated cost recovery deduction

Section 168 shall apply with respect to that portion of the basis of any property not taken into account under section 169 by reason of subsection (a)(4).

(2) 1250 Recapture

Subsection (a)(1) shall not apply to any section 1250 property which is part of a certified pollution control facility (within the meaning of section 169(d)(1)) with respect to which an election under section 169 was made.

(d) Special rule for real estate investment trusts

In the case of a real estate investment trust (as defined in section 856), the difference between the amounts described in subparagraphs (A) and (B) of subsection (a)(1) shall be reduced to the extent that a capital gain dividend (as defined in section 857(b)(3)(C),1 applied without regard to this section) is treated as paid out of such difference. Any capital gain dividend treated as having been paid out of such difference to a shareholder which is an applicable corporation retains its character in the hands of the shareholder as gain from the disposition of section 1250 property for purposes of applying subsection (a)(1) to such shareholder.

(e) Definitions

For purposes of this section—

(1) Financial institution preference item

The term "financial institution preference item" includes the following:

[(A) Repealed. Pub. L. 101–508, title XI, §11801(c)(12)(B), Nov. 5, 1990, 104 Stat. 1388–527]

(B) Interest on debt to carry tax-exempt obligations acquired after December 31, 1982, and before August 8, 1986

(i) In general

In the case of a financial institution which is a bank (as defined in section 585(a)(2)), the amount of interest on indebtedness incurred or continued to purchase or carry obligations acquired after December 31, 1982, and before August 8, 1986, the interest on which is exempt from taxes for the taxable year, to the extent that a deduction would (but for this paragraph or section 265(b)) be allowable with respect to such interest for such taxable year.

(ii) Determination of interest allocable to indebtedness on tax-exempt obligations

Unless the taxpayer (under regulations prescribed by the Secretary) establishes otherwise, the amount determined under clause (i) shall be an amount which bears the same ratio to the aggregate amount allowable (determined without regard to this section and section 265(b)) to the taxpayer as a deduction for interest for the taxable year as—

(I) the taxpayer's average adjusted basis (within the meaning of section 1016) of obligations described in clause (i), bears to

(II) such average adjusted basis for all assets of the taxpayer.

(iii) Interest

For purposes of this subparagraph, the term "interest" includes amounts (whether or not designated as interest) paid in respect of deposits, investment certificates, or withdrawable or repurchasable shares.

(iv) Application of subparagraph to certain obligations issued after August 7, 1986

For application of this subparagraph to certain obligations issued after August 7, 1986, see section 265(b)(3). That portion of any obligation not taken into account under paragraph (2)(A) of section 265(b) by reason of paragraph (7) of such section shall be treated for purposes of this section as having been acquired on August 7, 1986.

(2) Section 1245 and 1250 property

The terms "section 1245 property" and "section 1250 property" have the meanings given such terms by sections 1245(a)(3) and 1250(c), respectively.

(Added Pub. L. 97–248, title II, §204(a), Sept. 3, 1982, 96 Stat. 423; amended Pub. L. 97–354, §5(a)(27), Oct. 19, 1982, 96 Stat. 1694; Pub. L. 97–448, title III, §306(a)(2), Jan. 12, 1983, 96 Stat. 2400; Pub. L. 98–369, div. A, title I, §68(a), (b), title VII, §712(a)(1)(A), (2)–(4), July 18, 1984, 98 Stat. 588, 946; Pub. L. 99–514, title II, §201(d)(5), title IV, §§411(a), (b)(2)(C)(ii), 412(b)(1), title IX, §§901(b)(4), (d)(4)(C), 902(c), title XVIII, §§1804(k)(1), (3)(A), 1854(c)(1), 1876(b)(1), Oct. 22, 1986, 100 Stat. 2140, 2225, 2227, 2378, 2380, 2382, 2809, 2878, 2898; Pub. L. 100–418, title I, §1941(b)(5), Aug. 23, 1988, 102 Stat. 1324; Pub. L. 100–647, title I, §1009(b)(4), (5), Nov. 10, 1988, 102 Stat. 3449; Pub. L. 101–508, title XI, §11801(c)(12)(B), Nov. 5, 1990, 104 Stat. 1388–527; Pub. L. 104–188, title I, §§1602(b)(1), 1616(b)(5), Aug. 20, 1996, 110 Stat. 1833, 1856; Pub. L. 110–172, §11(g)(6), Dec. 29, 2007, 121 Stat. 2490; Pub. L. 111–5, div. B, title I, §1501(b), Feb. 17, 2009, 123 Stat. 353.)

Editorial Notes

References in Text

Section 857(b)(3)(C), referred to in subsec. (d), was redesignated section 857(b)(3)(B) by Pub. L. 115–97, title I, §13001(b)(2)(K)(i), Dec. 22, 2017, 131 Stat. 2096.

Amendments

2009—Subsec. (e)(1)(B)(iv). Pub. L. 111–5 inserted at end "That portion of any obligation not taken into account under paragraph (2)(A) of section 265(b) by reason of paragraph (7) of such section shall be treated for purposes of this section as having been acquired on August 7, 1986."

2007—Subsec. (a)(4), (5). Pub. L. 110–172, §11(g)(6)(A), redesignated par. (5) as (4) and struck out former par. (4) which read as follows: "In the case of taxable years beginning after December 31, 1984, section 923(a) shall be applied with respect to any FSC by substituting—

"(A) '30 percent' for '32 percent' in paragraph (2), and

"(B) '15/23' for '16/23' in paragraph (3).

If all of the stock in the FSC is not held by 1 or more C corporations throughout the taxable year, under regulations, proper adjustments shall be made in the application of the preceding sentence to take into account stock held by persons other than C corporations."

Subsec. (c)(1). Pub. L. 110–172, §11(g)(6)(B), substituted "subsection (a)(4)" for "subsection (a)(5)".

1996—Subsec. (e)(1)(B)(i). Pub. L. 104–188, §1616(b)(5), struck out "or to which section 593 applies" after "585(a)(2))".

Subsec. (e)(1)(B)(iv), (v). Pub. L. 104–188, §1602(b)(1), redesignated cl. (v) as (iv) and struck out former cl. (iv) which read as follows: "Special rules for obligations to which section 133 applies.—In the case of an obligation to which section 133 applies, interest on such obligation shall not be treated as exempt from taxes for purposes of this subparagraph."

1990—Subsec. (e)(1)(A). Pub. L. 101–508 struck out subpar. (A) "Excess reserves for losses on bad debts of financial institutions" which read as follows: "In the case of a financial institution to which section 585 applies, the excess of—

"(i) the amount which would, but for this section, be allowable as a deduction for the taxable year for a reasonable addition to a reserve for bad debts, over

"(ii) the amount which would have been allowable had such institution maintained its bad debt reserve for all taxable years on the basis of actual experience."

1988—Subsec. (b)(4). Pub. L. 100–418 amended par. (4) generally. Prior to amendment, par. (4) read as follows: "For purposes of this subsection, the term 'integrated oil company' means, with respect to any taxable year, any producer (within the meaning of section 4996(a)(1)) of crude oil other than an independent producer (within the meaning of section 4992(b))."

Subsec. (e)(1)(B)(i). Pub. L. 100–647, §1009(b)(5), substituted "section 585(a)(2)" for "section 582(a)(2)".

Subsec. (e)(1)(B)(iv), (v). Pub. L. 100–647, §1009(b)(4), redesignated cl. (iv), relating to application of subparagraph to certain obligations issued after Aug. 7, 1986, as (v).

1986—Subsec. (a). Pub. L. 99–514, §1804(k)(3)(A), substituted "Reduction" for "20-percent reduction" in heading.

Subsec. (a)(1)(A). Pub. L. 99–514, §201(d)(5)(A), struck out "or section 1245 recovery property" after "section 1245 property".

Subsec. (a)(2). Pub. L. 99–514, §412(b)(1), substituted "20 percent" for "15 percent".

Subsec. (a)(4). Pub. L. 99–514, §1876(b)(1), substituted "Certain FSC income" for "Certain deferred FSC income" in heading and amended text generally. Prior to amendment, text read as follows: "If a C corporation is a shareholder of the FSC, in the case of taxable years beginning after December 31, 1984, section 923(a) shall be applied with respect to such corporation by substituting—

"(A) '30 percent' for '32 percent' in paragraph (2), and

"(B) '15/23' for '16/23' in paragraph (3)."

Pub. L. 99–514, §1804(k)(1), substituted "If a C corporation" for "If a corporation".

Subsec. (b)(1). Pub. L. 99–514, §411(a)(1), (b)(2)(C)(ii), substituted "30 percent" for "20 percent" in closing provisions and "617(a)" for "617" in subpar. (B).

Subsec. (b)(2) to (6). Pub. L. 99–514, §411(a)(2), added pars. (2) to (5) and struck out former pars. (2) to (6) as follows: former par. (2), special rule for amounts not allowable as deductions under paragraph (1), related in subpar. (A) to intangible drilling costs and in subpar. (B) to mineral exploration and development costs; former par. (3) defined applicable percentage in accordance with table for taxable years 1 to 5; former par. (4) dispositions, related in subpar. (A) to oil, gas, and geothermal property, in subpar. (B) to application of section 617(d) of this title, and in subpar. (C) to recapture of investment credit; former par. (5) defined integrated oil company; and former par. (6) related to coordination with cost depletion.

Subsec. (c)(1). Pub. L. 99–514, §201(d)(5)(B), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "For purposes of subclause (1) of section 168(d)(1)(A)(ii), a taxpayer shall not be treated as electing the amortization deduction under section 169 with respect to that portion of the basis not taken into account under section 169 by reason of subsection (a)(5)."

Subsec. (e)(1)(A). Pub. L. 99–514, §901(b)(4), struck out "or 593" after "section 585".

Subsec. (e)(1)(B). Pub. L. 99–514, §902(c)(2)(C), substituted "1982, and before August 8, 1986" for "1982" in heading.

Subsec. (e)(1)(B)(i). Pub. L. 99–514, §902(c)(1), (2)(A), substituted "1982, and before August 8, 1986" for "1982" and "(but for this paragraph or section 265(b))" for "(but for this paragraph)".

Pub. L. 99–514, §901(d)(4)(C), substituted "which is a bank (as defined in section 582(a)(2)) or to which section 593 applies" for "to which section 585 or 593 applies".

Subsec. (e)(1)(B)(ii). Pub. L. 99–514, §902(c)(2)(B), inserted "and section 265(b)".

Subsec. (e)(1)(B)(iv). Pub. L. 99–514, §1854(c)(1), added cl. (iv) relating to special rules for obligations to which section 133 applies.

Pub. L. 99–514, §902(c)(2)(D), added cl. (iv) relating to application of subparagraph to certain obligations issued after August 7, 1986.

Subsec. (e)(2). Pub. L. 99–514, §201(d)(5)(C), struck out ", 'section 1245 recovery property'," after " 'section 1245 property' " and directed that par. (2) be amended by striking out ", section 1245(a)(5)," which was executed by striking out ", 1245(a)(5)," after "sections 1245(a)(3)" to reflect the probable intent of Congress.

1984—Subsec. (a). Pub. L. 98–369, §68(a), which directed that each subsection be amended by substituting "20 percent" for "15 percent" wherever appearing, was executed in heading by substituting "20-percent" for "15-percent" to reflect the probable intent of Congress.

Subsec. (a)(1). Pub. L. 98–369, §68(a), substituted "20 percent" for "15 percent" in provisions preceding subpar. (A).

Pub. L. 98–369, §712(a)(1)(A)(ii), inserted "under section 1250" in provisions following subpar. (B).

Subsec. (a)(1)(B). Pub. L. 98–369, §712(a)(1)(A)(i), inserted "(determined without regard to this paragraph)".

Subsec. (a)(3). Pub. L. 98–369, §68(a), substituted "20 percent" for "15 percent".

Subsec. (a)(4). Pub. L. 98–369, §68(b), amended par. (4) generally. Prior to amendment, par. (4) read as follows:

"(4) Certain deferred disc income.—If a corporation is a shareholder of a DISC, in the case of taxable years beginning after December 31, 1982, section 995(b)(1)(F)(i) shall be applied with respect to such corporation by substituting '57.5 percent' for 'one-half'."

Subsec. (a)(5). Pub. L. 98–369, §68(a), substituted "20 percent" for "15 percent".

Subsec. (b)(1). Pub. L. 98–369, §68(a), substituted "20 percent" for "15 percent" in provisions following subpar. (B).

Subsec. (b)(2)(B)(ii). Pub. L. 98–369, §712(a)(2), inserted "in the case of a deposit located in the United States,".

Subsec. (b)(6). Pub. L. 98–369, §712(a)(3), substituted "attributable to amounts to which paragraph (1) applied" for "attributable to intangible drilling and development costs or mining exploration and development costs".

Subsec. (e)(1)(B)(iii). Pub. L. 98–369, §712(a)(4), added cl. (iii).

1983—Subsec. (a)(1). Pub. L. 97–448 inserted provision that, under regulations prescribed by the Secretary, the provisions of this paragraph shall not apply to the disposition of any property to the extent section 1250(a) does not apply to such disposition by reason of section 1250(d).

1982—Subsec. (a). Pub. L. 97–354, §5(a)(27)(A), substituted "a corporation" for "an applicable corporation" wherever appearing.

Subsec. (b). Pub. L. 97–354, §5(a)(27)(A), substituted "a corporation" for "an applicable corporation".

Subsec. (e)(2), (3). Pub. L. 97–354, §5(a)(27)(B), redesignated par. (3) as (2). Former par. (2), defining "applicable corporation", was struck out.

Statutory Notes and Related Subsidiaries

Effective Date of 2009 Amendment

Amendment by Pub. L. 111–5 applicable to obligations issued after Dec. 31, 2008, see section 1501(c) of Pub. L. 111–5, set out as a note under section 265 of this title.

Effective Date of 1996 Amendment

Amendment by section 1602(b)(1) of Pub. L. 104–188 applicable to loans made after Aug. 20, 1996, with exception and provisions relating to certain refinancings, see section 1602(c) of Pub. L. 104–188, set out as an Effective Date of Repeal note under former section 133 of this title.

Amendment by section 1616(b)(5) of Pub. L. 104–188 applicable to taxable years beginning after Dec. 31, 1995, see section 1616(c) of Pub. L. 104–188, set out as a note under section 593 of this title.

Effective Date of 1988 Amendments

Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Amendment by Pub. L. 100–418 applicable to crude oil removed from the premises on or after Aug. 23, 1988, see section 1941(c) of Pub. L. 100–418, set out as a note under section 164 of this title.

Effective Date of 1986 Amendment

Amendment by section 201(d)(5) of Pub. L. 99–514 applicable to property placed in service after Dec. 31, 1986, in taxable years ending after such date, with exceptions, see sections 203 and 204 of Pub. L. 99–514, set out as a note under section 168 of this title.

Amendment by section 201(d)(5) of Pub. L. 99–514 not applicable to any property placed in service before Jan. 1, 1994, if such property placed in service as part of specified rehabilitations, not applicable to certain additional rehabilitations, see section 251(d)(2), (3) of Pub. L. 99–514, set out as a note under section 46 of this title.

Amendment by section 411(a), (b)(2)(C)(ii) of Pub. L. 99–514 applicable, except as otherwise provided, to costs paid or incurred after Dec. 31, 1986, in taxable years ending after such date, see section 411(c) of Pub. L. 99–514 set out as a note under section 263 of this title.

Pub. L. 99–514, title IV, §412(b)(2), Oct. 22, 1986, 100 Stat. 2227, provided that: "The amendment made by paragraph (1) [amending this section] shall apply to taxable years beginning after December 31, 1986."

Amendment by section 901(b)(4), (d)(4)(C) of Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 901(e) of Pub. L. 99–514, set out as a note under section 166 of this title.

Amendment by section 902(c) of Pub. L. 99–514 applicable to taxable years ending after Dec. 31, 1986, with certain exceptions and qualifications, see section 902(f) of Pub. L. 99–514, set out as a note under section 265 of this title.

Pub. L. 99–514, title XVIII, §1804(k)(1), Oct. 22, 1986, 100 Stat. 2809, provided that amendment made by section 1804(k)(1) of Pub. L. 99–514 is effective with respect to taxable years beginning after Dec. 31, 1982.

Amendment by sections 1804(k)(3)(A), 1854(c)(1), and 1876(b)(1) of Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date of 1984 Amendment

Pub. L. 98–369, div. A, title I, §68(e), July 18, 1984, 98 Stat. 588, as amended by Pub. L. 99–514, §2, title XVIII, §1804(k)(2), Oct. 22, 1986, 100 Stat. 2095, 2809, provided that:

"(1) In general.—Except as provided in this subsection, the amendments made by this section [amending this section and sections 57 and 995 of this title] shall apply to taxable years beginning after December 31, 1984.

"(2) 1250 gain.—The amendments made by this section to section 291(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], and the amendment made by subsection (c)(2) of this section [amending section 57 of this title], shall apply to sales or other dispositions after December 31, 1984, in taxable years ending after such date.

"(3) Pollution control facilities.—The amendments made by this section to section 291(a)(5) [now 291(a)(4)] of such Code, and so much of the amendment made by subsection (c)(1) of this section [amending section 57 of this title] as relates to pollution control facilities, shall apply to property placed in service after December 31, 1984, in taxable years ending after such date.

"(4) Drilling and mining costs.—The amendments made by this section to section 291(b) of such Code shall apply to expenditures after December 31, 1984, in taxable years ending after such date."

Amendment by section 712 of Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title.

Effective Date of 1983 Amendment

Amendment by Pub. L. 97–448 effective as if included in the provisions of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 311(d) of Pub. L. 97–448, set out as a note under section 31 of this title.

Effective Date of 1982 Amendment

Amendment by Pub. L. 97–354 applicable to taxable years beginning after Dec. 31, 1982, see section 6(a) of Pub. L. 97–354, set out as an Effective Date note under section 1361 of this title.

Effective Date

Pub. L. 97–248, title II, §204(d), Sept. 3, 1982, 96 Stat. 427, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(1) In general.—Except as provided in this subsection, the amendments made by this section [enacting this section and amending sections 57 and 263 of this title] shall apply to taxable years beginning after December 31, 1982.

"(2) 1250 Gain.—Section 291(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] shall apply to sales or other disposition after December 31, 1982, in taxable years ending after such date.

"(3) Pollution control facilities.—Section 291(a)(5) [now 291(a)(4)] of such Code shall apply to property placed in service after December 31, 1982, in taxable years ending after such date.

"(4) Drilling and mining costs.—Section 291(b) of such Code shall apply to expenditures after December 31, 1982, in taxable years ending after such date.

"(5) Reduction in percentage depletion for coal and iron ore.—Section 291(a)(2) of such Code shall apply to taxable years beginning after December 31, 1983.

"(6) Minimum tax.—The amendment made by subsection (b) [amending section 57 of this title] shall apply to taxable years ending after December 31, 1982, with respect to items of tax preference described in section 57(b) of such Code to which section 291 of such Code applies; except that in the case of an item described in section 291(a)(2) of such Code, such amendment shall apply to taxable years beginning after December 31, 1983."

Savings Provision

For provisions that nothing in amendment by Pub. L. 101–508 be construed to affect treatment of certain transactions occurring, property acquired, or items of income, loss, deduction, or credit taken into account prior to Nov. 5, 1990, for purposes of determining liability for tax for periods ending after Nov. 5, 1990, see section 11821(b) of Pub. L. 101–508, set out as a note under section 45K of this title.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

1 See References in Text note below.