
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC7507]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                  CHAPTER 77--MISCELLANEOUS PROVISIONS
 
Sec. 7507. Exemption of insolvent banks from tax


(a) Assets in general

    Whenever and after any bank or trust company, a substantial portion 
of the business of which consists of receiving deposits and making loans 
and discounts, has ceased to do business by reason of insolvency or 
bankruptcy, no tax shall be assessed or collected, or paid into the 
Treasury of the United States, on account of such bank or trust company, 
which shall diminish the assets thereof necessary for the full payment 
of all its depositors; and such tax shall be abated from such national 
banks as are found by the Comptroller of the Currency to be insolvent; 
and the Secretary, when the facts shall appear to him, is authorized to 
remit so much of the said tax against any such insolvent banks and trust 
companies organized under State law as shall be found to affect the 
claims of their depositors.

(b) Segregated assets; earnings

    Whenever any bank or trust company, a substantial portion of the 
business of which consists of receiving deposits and making loans and 
discounts, has been released or discharged from its liability to its 
depositors for any part of their claims against it, and such depositors 
have accepted, in lieu thereof, a lien upon subsequent earnings of such 
bank or trust company, or claims against assets segregated by such bank 
or trust company or against assets transferred from it to an individual 
or corporate trustee or agent, no tax shall be assessed or collected, or 
paid into the Treasury of the United States, on account of such bank or 
trust company, such individual or corporate trustee or such agent, which 
shall diminish the assets thereof which are available for the payment of 
such depositor claims and which are necessary for the full payment 
thereof. The term ``agent'', as used in this subsection, shall be deemed 
to include a corporation acting as a liquidating agent.

(c) Refund; reassessment; statutes of limitation

    (1) Any such tax collected shall be deemed to be erroneously 
collected, and shall be refunded subject to all provisions and 
limitations of law, so far as applicable, relating to the refunding of 
taxes.
    (2) Any tax, the assessment, collection, or payment of which is 
barred under subsection (a), or any such tax which has been abated or 
remitted shall be assessed or reassessed whenever it shall appear that 
payment of the tax will not diminish the assets as aforesaid.
    (3) Any tax, the assessment, collection, or payment of which is 
barred under subsection (b), or any such tax which has been refunded 
shall be assessed or reassessed after full payment of such claims of 
depositors to the extent of the remaining assets segregated or 
transferred as described in subsection (b).
    (4) The running of the statute of limitations on the making of 
assessment and collection shall be suspended during, and for 90 days 
beyond, the period for which, pursuant to this section, assessment or 
collection may not be made, and a tax may be reassessed as provided in 
paragraphs (2) and (3) of this subsection and collected, during the time 
within which, had there been no abatement, collection might have been 
made.

(d) Exception of employment taxes

    This section shall not apply to any tax imposed by chapter 21 or 
chapter 23.

(Aug. 16, 1954, ch. 736, 68A Stat. 897; Pub. L. 94-455, title XIX, 
Sec. 1906(a)(50), (b)(13)(A), Oct. 4, 1976, 90 Stat. 1831, 1834.)


                               Amendments

    1976--Subsec. (a). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out 
``or his delegate'' after ``Secretary''.
    Subsec. (c). Pub. L. 94-455, Sec. 1906(a)(50), struck out ``after 
May 28, 1938'' in par. (2) after ``or remitted'' and in par. (3) after 
``been refunded''.


                    Effective Date of 1976 Amendment

    Amendment by Pub. L. 94-455 effective on first day of first month 
which begins more than 90 days after Oct. 4, 1976, see section 
1906(d)(1) of Pub. L. 94-455, set out as a note under section 6013 of 
this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 6207, 6504 of this title.
