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U.S. Code as of:
01/19/04
Section 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.
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