Us Code § 4961 - Abatement of second tier taxes where there is correction
Full text of Us Code United States Code § 4961 — Abatement of second tier taxes where there is correction, with citation guidance and answers to common questions.
§ 4961. Abatement of second tier taxes where there is correction
(a) General rule
If any taxable event is corrected during the correction period for such event, then any second tier tax imposed with respect to such event (including interest, additions to the tax, and additional amounts) shall not be assessed, and if assessed the assessment shall be abated, and if collected shall be credited or refunded as an overpayment.
(b) Supplemental proceeding
If the determination by a court that the taxpayer is liable for a second tier tax has become final, such court shall have jurisdiction to conduct any necessary supplemental proceeding to determine whether the taxable event was corrected during the correction period. Such a supplemental proceeding may be begun only during the period which ends on the 90th day after the last day of the correction period. Where such a supplemental proceeding has begun, the reference in the second sentence of section 6213(a) to a final decision of the Tax Court shall be treated as including a final decision in such supplemental proceeding.
(c) Suspension of period of collection for second tier tax
(1) Proceeding in District Court or United States Court of Federal Claims
If, not later than 90 days after the day on which the second tier tax is assessed, the first tier tax is paid in full and a claim for refund of the amount so paid is filed, no levy or proceeding in court for the collection of the second tier tax shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2) (and of any supplemental proceeding with respect thereto under subsection (b)). Notwithstanding section 7421(a), the collection by levy or proceeding may be enjoined during the time such prohibition is in force by a proceeding in the proper court.
(2) Suit must be brought to determine liability
If, within 90 days after the day on which his claim for refund is denied, the person against whom the second tier tax was assessed fails to begin a proceeding described in section 7422 for the determination of his liability for such tax, paragraph (1) shall cease to apply with respect to such tax, effective on the day following the close of the 90-day period referred to in this paragraph.
(3) Suspension of running of period of limitations on collection
The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court with respect to any second tier tax described in paragraph (1) shall be suspended for the period during which the Secretary is prohibited from collecting by levy or a proceeding in court.
(4) Jeopardy collection
If the Secretary makes a finding that the collection of the second tier tax is in jeopardy, nothing in this subsection shall prevent the immediate collection of such tax.
(Added Pub. L. 96–596, §2(c)(1), Dec. 24, 1980, 94 Stat. 3472; amended Pub. L. 99–514, title XVIII, §1899A(50), Oct. 22, 1986, 100 Stat. 2961; Pub. L. 115–141, div. U, title IV, §401(a)(325)(C), Mar. 23, 2018, 132 Stat. 1200.)
Editorial Notes
Amendments
2018—Subsec. (c)(1). Pub. L. 115–141 substituted "United States Court of Federal Claims" for "United States Claims Court" in heading.
1986—Subsec. (c)(1). Pub. L. 99–514 substituted "United States Claims Court" for "Court of Claims" in heading.
Statutory Notes and Related Subsidiaries
Effective Date
Pub. L. 96–596, §2(d), Dec. 24, 1980, 94 Stat. 3474, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:
"(1)
"(2)
"(3)
About This Section
26 U.S.C. § 4961 is part of Title 26 of the United States Code. The United States Code is the official codification of federal statutes maintained by the Office of the Law Revision Counsel of the U.S. House of Representatives. Congress amends the Code through new public laws, which are eventually incorporated into the relevant title.
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