
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC1311]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                        Subtitle A--Income Taxes
 
                  CHAPTER 1--NORMAL TAXES AND SURTAXES
 
 Subchapter Q--Readjustment of Tax Between Years and Special Limitations
 
    PART II--MITIGATION OF EFFECT OF LIMITATIONS AND OTHER PROVISIONS
 
Sec. 1311. Correction of error


(a) General rule

    If a determination (as defined in section 1313) is described in one 
or more of the paragraphs of section 1312 and, on the date of the 
determination, correction of the effect of the error referred to in the 
applicable paragraph of section 1312 is prevented by the operation of 
any law or rule of law, other than this part and other than section 7122 
(relating to compromises), then the effect of the error shall be 
corrected by an adjustment made in the amount and in the manner 
specified in section 1314.

(b) Conditions necessary for adjustment

             (1) Maintenance of an inconsistent position

        Except in cases described in paragraphs (3) (B) and (4) of 
    section 1312, an adjustment shall be made under this part only if--
            (A) in case the amount of the adjustment would be credited 
        or refunded in the same manner as an overpayment under section 
        1314, there is adopted in the determination a position 
        maintained by the Secretary, or
            (B) in case the amount of the adjustment would be assessed 
        and collected in the same manner as a deficiency under section 
        1314, there is adopted in the determination a position 
        maintained by the taxpayer with respect to whom the 
        determination is made,

    and the position maintained by the Secretary in the case described 
    in subparagraph (A) or maintained by the taxpayer in the case 
    described in subparagraph (B) is inconsistent with the erroneous 
    inclusion, exclusion, omission, allowance, disallowance, 
    recognition, or non-recognition, as the case may be.

        (2) Correction not barred at time of erroneous action

        (A) Determination described in section 1312(3)(B)

            In the case of a determination described in section 
        1312(3)(B) (relating to certain exclusions from income), 
        adjustment shall be made under this part only if assessment of a 
        deficiency for the taxable year in which the item is includible 
        or against the related taxpayer was not barred, by any law or 
        rule of law, at the time the Secretary first maintained, in a 
        notice of deficiency sent pursuant to section 6212 or before the 
        Tax Court that the item described in section 1312(3)(B) should 
        be included in the gross income of the taxpayer for the taxable 
        year to which the determination relates.

        (B) Determination described in section 1312(4)

            In the case of a determination described in section 1312(4) 
        (relating to disallowance of certain deductions and credits), 
        adjustment shall be made under this part only if credit or 
        refund of the overpayment attributable to the deduction or 
        credit described in such section which should have been allowed 
        to the taxpayer or related taxpayer was not barred, by any law 
        or rule of law, at the time the taxpayer first maintained before 
        the Secretary or before the Tax Court, in writing, that he was 
        entitled to such deduction or credit for the taxable year to 
        which the determination relates.

                    (3) Existence of relationship

        In case the amount of the adjustment would be assessed and 
    collected in the same manner as a deficiency (except for cases 
    described in section 1312(3)(B)), the adjustment shall not be made 
    with respect to a related taxpayer unless he stands in such 
    relationship to the taxpayer at the time the latter first maintains 
    the inconsistent position in a return, claim for refund, or petition 
    (or amended petition) to the Tax Court for the taxable year with 
    respect to which the determination is made, or if such position is 
    not so maintained, then at the time of the determination.

(Aug. 16, 1954, ch. 736, 68A Stat. 337; Pub. L. 94-455, title XIX, 
Secs. 1901(a)(142), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1788, 1834.)


                               Amendments

    1976--Subsec. (b)(2). Pub. L. 94-455, Secs. 1901(a)(142), 
1906(b)(13)(A), struck out ``or his delegate'' after ``Secretary'' and 
``of the United States'' after ``Tax Court'' wherever appearing.
    Subsec. (b)(3). Pub. L. 94-455, Sec. 1901(a)(142), struck out ``of 
the United States'' after ``Tax Court''.


                    Effective Date of 1976 Amendment

    Amendment by section 1901(a)(142) of Pub. L. 94-455 effective for 
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.

                  Section Referred to in Other Sections

    This section is referred to in sections 1312, 1314 of this title.
