
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: 26USC4963]

 
                     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. 4963. Definitions


(a) First tier tax

    For purposes of this subchapter, the term ``first tier tax'' means 
any tax imposed by subsection (a) of section 4941, 4942, 4943, 4944, 
4945, 4951, 4952, 4955, 4958, 4971, or 4975.

(b) Second tier tax

    For purposes of this subchapter, the term ``second tier tax'' means 
any tax imposed by subsection (b) of section 4941, 4942, 4943, 4944, 
4945, 4951, 4952, 4955, 4958, 4971, or 4975.

(c) Taxable event

    For purposes of this subchapter, the term ``taxable event'' means 
any act (or failure to act) giving rise to liability for tax under 
section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4971, or 
4975.

(d) Correct

    For purposes of this subchapter--

                           (1) In general

        Except as provided in paragraph (2), the term ``correct'' has 
    the same meaning as when used in the section which imposes the 
    second tier tax.

                          (2) Special rules

        The term ``correct'' means--
            (A) in the case of the second tier tax imposed by section 
        4942(b), reducing the amount of the undistributed income to 
        zero,
            (B) in the case of the second tier tax imposed by section 
        4943(b), reducing the amount of the excess business holdings to 
        zero, and
            (C) in the case of the second tier tax imposed by section 
        4944, removing the investment from jeopardy.

(e) Correction period

    For purposes of this subchapter--

                           (1) In general

        The term ``correction period'' means, with respect to any 
    taxable event, the period beginning on the date on which such event 
    occurs and ending 90 days after the date of mailing under section 
    6212 of a notice of deficiency with respect to the second tier tax 
    imposed on such taxable event, extended by--
            (A) any period in which a deficiency cannot be assessed 
        under section 6213(a) (determined without regard to the last 
        sentence of section 4961(b)), and
            (B) any other period which the Secretary determines is 
        reasonable and necessary to bring about correction of the 
        taxable event.

           (2) Special rules for when taxable event occurs

        For purposes of paragraph (1), the taxable event shall be 
    treated as occurring--
            (A) in the case of section 4942, on the first day of the 
        taxable year for which there was a failure to distribute income,
            (B) in the case of section 4943, on the first day on which 
        there are excess business holdings,
            (C) in the case of section 4971, on the last day of the plan 
        year in which there is an accumulated funding deficiency, and
            (D) in any other case, the date on which such event 
        occurred.

(Added Pub. L. 96-596, Sec. 2(c)(1), Dec. 24, 1980, 94 Stat. 3473, 
Sec. 4962; renumbered Sec. 4963, Pub. L. 98-369, div. A, title III, 
Sec. 305(a), July 18, 1984, 98 Stat. 783; amended Pub. L. 100-203, title 
X, Sec. 10712(b)(3), Dec. 22, 1987, 101 Stat. 1330-467; Pub. L. 104-168, 
title XIII, Sec. 1311(c)(2), July 30, 1996, 110 Stat. 1478.)


                               Amendments

    1996--Subsecs. (a) to (c). Pub. L. 104-168 inserted ``4958,'' after 
``4955,''.
    1987--Subsecs. (a) to (c). Pub. L. 100-203 inserted reference to 
section 4955 of this title.


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-168 applicable to excess benefit 
transactions occurring on or after Sept. 14, 1995, and not applicable to 
any benefit arising from a transaction pursuant to any written contract 
which was binding on Sept. 13, 1995, and at all times thereafter before 
such transaction occurred, see section 1311(d)(1), (2) of Pub. L. 104-
168, set out as a note under section 4955 of this title.


                    Effective Date of 1987 Amendment

    Amendment by Pub. L. 100-203 applicable to taxable years beginning 
after Dec. 22, 1987, see section 10712(d) of Pub. L. 100-203, set out as 
an Effective Date note under section 4955 of this title.


                             Effective Date

    For effective date of section with respect to any first tier tax and 
to any second tier tax, see section 2(d) of Pub. L. 96-596, set out as a 
note under section 4961 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 4942, 6213, 6214, 6503, 7422 
of this title.
