
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: 26USC4961]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                 Subtitle D--Miscellaneous Excise Taxes
 
     CHAPTER 42--PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT 
                              ORGANIZATIONS
 
 Subchapter E--Abatement of First and Second Tier Taxes in Certain Cases
 
Sec. 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, Sec. 2(c)(1), Dec. 24, 1980, 94 Stat. 3472; 
amended Pub. L. 99-514, title XVIII, Sec. 1899A(50), Oct. 22, 1986, 100 
Stat. 2961; Pub. L. 102-572, title IX, Sec. 902(b)(1), Oct. 29, 1992, 
106 Stat. 4516.)


                               Amendments

    1992--Subsec. (c)(1). Pub. L. 102-572 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.


                    Effective Date of 1992 Amendment

    Amendment by Pub. L. 102-572 effective Oct. 29, 1992, see section 
911 of Pub. L. 102-572, set out as a note under section 171 of Title 28, 
Judiciary and Judicial Procedure.


                             Effective Date

    Section 2(d) of Pub. L. 96-596, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
    ``(1) First tier taxes.--The amendments made by this section 
[enacting this section and section 4962 of this title and amending 
sections 4941 to 4945, 4951, 4952, 4971, 4975, 6213, 6214, 6503, and 
7422 of this title] with respect to any first tier tax shall take effect 
as if included in the Internal Revenue Code of 1986 [formerly I.R.C. 
1954] when such tax was first imposed.
    ``(2) Second tier taxes.--The amendments made by this section with 
respect to any second tier tax shall apply only with respect to taxes 
assessed after the date of the enactment of this Act [Dec. 24, 1980]. 
Nothing in the preceding sentence shall be construed to permit the 
assessment of a tax in a case to which, on the date of the enactment of 
this Act, the doctrine of res judicata applies.
    ``(3) First and second tier tax.--For purposes of this subsection, 
the terms `first tier tax' and `second tier tax' have the respective 
meanings given to such terms by section 4962 of the Internal Revenue 
Code of 1986.''

                  Section Referred to in Other Sections

    This section is referred to in section 4963 of this title.
