lating to the extension of time for payment in the case of an amount referred to in subpar. (B). Subsec. (b). Pub. L. 94-455, §§ 1307(d)(2)(C), 1605(b)(3), 2004(c)(2), among other changes, added reference to chapter 41, effective on or after Oct. 4, 1976, and reference to chapter 44, applicable to taxable years of real estate investment trusts beginning after Oct. 4, 1976, and struck out provisions relating to grant of extensions with respect to hardships to taxpayers, applicable to the estates of decedents dying after Dec. 31, 1976. Subsec. (d)(2). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". 1974-Subsec. (b). Pub. L. 93-406 inserted reference to chapter 43 in two places. 1970-Subsec. (a)(1). Pub. L. 91-614 substituted "6 months (12 months in the case of estate tax)" for "6 months". 1969-Subsec. (b). Pub. L. 91-172 inserted references to chapter 42. 1958-Subsec. (a)(2). Pub. L. 85-866 added provisions allowing Secretary or his delegate to extend time for payment for reasonable period, not exceeding 10 years from date prescribed by section 6151(a), if he finds that payment on date fixed for payment of any installment under section 6166, or any part of such installment, or payment of any part of a deficiency prorated under section 6166 to installments the date for payment of which had arrived would result in undue hardship. EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97-34 applicable to estates of decedents dying after Dec. 31, 1981, see section 422(f)(1) of Pub. L. 97-34, set out as a note under section 6166 of this title. EFFECTIVE DATE OF 1980 AMENDMENTS Amendment by Pub. L. 96-589 effective Oct. 1, 1979, but not applicable to proceedings under Title 11, Bankruptcy, commenced before Oct. 1, 1979, see section 7(e) of Pub. L. 96-589, set out as a note under section 108 of this title. Amendment by Pub. L. 96-223 applicable to periods after Feb. 29, 1980, see section 101(i) of Pub. L. 96-223, set out as an Effective Date note under section 4986 of this title. EFFECTIVE DATE OF 1976 Amendment Amendment of subsec. (b) by section 1307(d)(2)(C) of Pub. L. 94-455 effective on and after Oct. 4, 1976, see section 1307(e)(6) of Pub. L. 94-455, set out as a note under section 501 of this title. For effective date of amendment of subsec. (b) by section 1605(b)(3) of Pub. L. 94-455, see section 1608(d) of Pub. L. 94-455, set out as a note under section 856 of this title. Amendment of subsecs. (a)(2), (b) by section 2004(c)(1), (2) of Pub. L. 94-455 applicable to estates of decedents dying after Dec. 31, 1976, see section 2004(g) of Pub. L. 94-455, set out as an Effective Date note under section 6166 of this title. EFFECTIVE DATE OF 1974 AMENDMENT Amendment by Pub. L. 93-406 applicable, except as otherwise provided in section 1017(c) through (h) of Pub. L. 93-406, for plan years beginning after Sept. 2, 1974, but, in the case of plans in existence on Jan. 1, 1974, amendment by Pub. L. 93-406 applicable for plan years beginning after Dec. 31, 1975, see section 1017 of Pub. L. 93-406, set out as an Effective Date; Transitional Rules note under section 410 of this title. EFFECTIVE DATE OF 1970 AMENDMENT Amendment by Pub. L. 91-614 applicable with respect to decedents dying after Dec. 31, 1970, see section 101(j) of Pub. L. 91-614, set out as a note under section 2032 of this title. EFFECTIVE DATE OF 1969 AMENDMENT Amendment by Pub. L. 91-172 effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91-172, set out as an Effective Date note under section 4940 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Section 206(f) of Pub. L. 85-866 provided that: "The amendments made by this section [enacting section 6166 of this title and amending sections 6161(a)(2), 6503(d) and 6601(b) of this title] shall apply to estates of decedents with respect to which the date for the filing of the estate tax return (including extensions thereof) prescribed by section 6075(a) of the Internal Revenue Code of 1954 is after the date of the enactment of this Act [Sept. 2, 1958]; except that (1) section 6166(1) of such Code as added by this section shall apply to estates of decedents dying after August 16, 1954, but only if the date for the filing of the estate tax return (including extensions thereof) expired on or before the date of the enactment of this Act [Sept. 2, 1958], and (2) notwithstanding section 6166(a) of such Code, if an election under such section is required to be made before the sixtieth day after the date of the enactment of this Act [Sept. 2, 1958] such an election shall be considered timely if made on or before such sixtieth day." CROSS REFERENCES Time for filing returns Estate and gift tax, see section 6075 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 2011, 2014, 2204, 6215, 6503, 6873 of this title. [§ 6162. Repealed. Pub. L. 94-455, title XIX, § 1906(a)(12), Oct. 4, 1976, 90 Stat. 1825] Section, act Aug. 16, 1954, ch. 736, 68A Stat. 763, provided for an extension of time for payment of tax on gain attributable to liquidation of personal holding companies. EFFECTIVE DATE OF REPEAL Repeal of section effective on the first day of the month which begins more than 90 days after Oct. 4, 1976, see section 1906(d)(1) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 6013 of this title. § 6163. Extension of time for payment of estate tax on value of reversionary or remainder interest in property (a) Extension permitted If the value of a reversionary or remainder interest in property is included under chapter 11 in the value of the gross estate, the payment of the part of the tax under chapter 11 attributable to such interest may, at the election of the executor, be postponed until 6 months after the termination of the precedent interest or interests in the property, under such regulations as the Secretary may prescribe. (b) Extension for reasonable cause At the expiration of the period of postponement provided for in subsection (a), the Secretary may, for reasonable cause, extend the time for payment for a reasonable period or periods not in excess of 3 years from the expiration of the period of postponement provided in subsection (a). (c) Cross reference For authority of the Secretary to require security in the case of an extension under this section, see section 6165. (Aug. 16, 1954, ch. 736, 68A Stat. 763; Sept. 2, 1958, Pub. L. 85-866, title I, § 66(b)(1), 72 Stat. 1658; Feb. 26, 1964, Pub. L. 88-272, title II, § 240(a), 78 Stat. 129; Jan. 3, 1975, Pub. L. 93-625, § 7(d)(1), 88 Stat. 2115; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), title XX, § 2004(c)(3), 90 Stat. 1834, 1868.) AMENDMENTS 1976-Subsec. (a). Pub. L. 94-455, § 1906(b)(13)(A), struck out or his delegate" following "Secretary". Subsec. (b). Pub. L. 94-455, § 2004(c)(3), substituted provisions relating to extension of time for payment for a reasonable cause for provisions relating to extension of time for payment for undue hardship to the estate. Subsec. (c). Pub. L. 94-455, § 1906(b)(13)(A), struck out "or his delegate" following "Secretary". 1975-Subsec. (c). Pub. L. 93-625 deleted par. (1) cross reference to interest provisions of section 6601(b) of this title and deleted par. (2) designation of cross reference to security, now incorporated in present subsec. (c) provision. 1964-Subsec. (b). Pub. L. 88-272 substituted "or periods not in excess of 3" for "not in excess of 2". 1958-Subsec. (b). Pub. L. 85-866 added subsec. (b) and redesignated former subsec. (b) as (c). Subsec. (c). Pub. L. 85-866 redesignated former subsec. (b) as (c). EFFECTIVE DATE OF 1976 AMENDMENT Amendment of subsec. (b) by section 2004(c)(3) of Pub. L. 94-455 applicable to estates of decedents dying after Dec. 31, 1976, see section 2004(g) of Pub. L. 94-455, set out as an Effective Date note under section 6166 of this title. EFFECTIVE DATE OF 1975 Amendment Amendment by Pub. L. 93-625 effective on July 1, 1975, and applicable to amounts outstanding on such date or arising thereafter, see section 7(e) of Pub. L. 93-625, set out as an Effective Date note under section 6621 of this title. (a) EFFECTIVE DATE OF 1964 AMENDMENT Section 240(c) of Pub. L. 88-272 provided that: (1) The amendment made by subsection [amending this section] shall apply in the case of any reversionary or remainder interest only if the time for payment of the tax under chapter 11 of the Internal Revenue Code of 1954 attributable to such interest, including any extensions thereof, has not expired on the date of the enactment of this Act (Feb. 26, 1964). (2) The amendment made by subsection (b) [amending section 925, Internal Revenue Code, 1939] shall apply in the case of any reversionary or remainder interest only if the time for payment of the tax under chapter 3 of the Internal Revenue Code of 1939 attributable to such interest, including any extensions thereof, has not expired on the date of the enactment of this Act [Feb. 26, 1964]." EFFECTIVE DATE OF 1958 Amendment Section 66(b)(3) of Pub. L. 85-866 provided that: "The amendments made by paragraphs (1) and (2) [amending subsecs. (b) and (c) of this section and sections 925 and 926 of I.R.C. 1939) shall apply in the case of any reversionary or remainder interest only if the precedent interest or interests in the property did not terminate before the beginning of the 6-month period which ends on the date of the enactment of this Act [Sept. 2, 1958]." CROSS REFERENCES Time for filing estate tax return, see section 6075 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 2015, 2204, 6503 of this title. § 6164. Extension of time for payment of taxes by corporations expecting carrybacks (a) In general If a corporation, in any taxable year, files with the Secretary a statement, as provided in subsection (b), with respect to an expected net operating loss carryback from such taxable year, the time for payment of all or part of any tax imposed by subtitle A for the taxable year immediately preceding such taxable year shall be extended, to the extent and subject to the conditions and limitations hereinafter provided in this section. (b) Contents of statement The statement shall be filed at such time and in such manner and form as the Secretary may by regulations prescribe. Such statement shall set forth that the corporation expects to have a net operating loss carryback, as provided in section 172(b), from the taxable year in which such statement is made, and shall set forth, in such detail and with such supporting data and explanation as such regulations shall require (1) the estimated amount of the expected net operating loss; (2) the reasons, facts, and circumstances which cause the corporation to expect such net operating loss; (3) the amount of the reduction of the tax previously determined attributable to the expected carryback, such tax previously determined being ascertained in accordance with the method prescribed in section 1314(a); and such reduction being determined by applying the expected carryback in the manner provided by law to the items on the basis of which such tax was determined; (4) the tax and the part thereof the time for payment of which is to be extended; and (5) such other information for purposes of carrying out the provisions of this section as may be required by such regulations. The Secretary shall, upon request, furnish a receipt for any statement filed, which shall set forth the date of such filing. (c) Amount to which extension relates and installment payments The amount the time for payment of which may be extended under subsection (a) with respect to any tax shall not exceed the amount of such tax shown on the return, increased by any amount assessed as a deficiency (or as interest or addition to the tax) prior to the date of filing the statement and decreased by any amount paid or required to be paid prior to the date of such filing, and the total amount of the tax the time for payment of which may be extended shall not exceed the amount stated under subsection (b)(3). For purposes of this subsection, an amount shall not be considered as required to be paid unless shown on the return or assessed as a deficiency (or as interest or addition to the tax), and an amount assessed as a deficiency (or as interest or addition to the tax) shall be considered to be required to be paid prior to the date of filing of the statement if the 10th day after notice and demand for its payment occurs prior to such date. If an extension of time under this section relates to only a part of the tax, the time for payment of the remainder shall be the date on which payment would have been required if such remainder had been the tax. (d) Period of extension The extension of time for payment provided in this section shall expire (1) on the last day of the month in which falls the last date prescribed by law (including any extension of time granted the taxpayer) for the filing of the return for the taxable year of the expected net operating loss, or (2) if an application for tentative carryback adjustment provided in section 6411 with respect to such loss is filed before the expiration of the period prescribed in paragraph (1), on the date on which notice is mailed by certified mail or registered mail by the Secretary to the taxpayer that such application is allowed or disallowed in whole or in part. (e) Revised statements Each statement filed under subsection (a) with respect to any taxable year shall be in lieu of the last statement previously filed with respect to such year. If the amount the time for payment of which is extended under a statement filed is less than the amount under the last statement previously filed, the extension of time shall be terminated as to the difference between the two amounts. (f) Termination The Secretary is not required to make any examination of the statement, but he may make such examination thereof as he deems necessary and practicable. The Secretary shall terminate the extension as to any part of the amount to which it relates which he deems should be terminated because, upon such examination, he believes that, as of the time such examination is made, all or any part of the statement clearly is in a material respect erroneous or unreasonable. (g) Payments on termination If an extension of time is terminated under subsection (e) or (f) with respect to any amount, then (1) no further extension of time shall be made under this section with respect to such amount, and (2) the time for payment of such amount shall be considered to be the date on which payment would have been required if there had been no extension with respect to such amount. (h) Jeopardy If the Secretary believes that collection of the amount to which an extension under this section relates is in jeopardy, he shall immediately terminate such extension, and notice and demand shall be made by him for payment of such amount. (i) Consolidated returns If the corporation seeking an extension of time under this section made or was required to make a consolidated return, either for the taxable year within which the net operating loss arises or for the preceding taxable year affected by such loss, the provisions of such section shall apply only to such extent and subject to such conditions, limitations, and exceptions as the Secretary may by regulations prescribe. (Aug. 16, 1954, ch. 736, 68A Stat. 764; Sept. 2, 1958, Pub. L. 85-866, title I, § 89(b), 72 Stat. 1665; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834; Sept. 3, 1982, Pub. L. 97-248, title II, § 234(b)(2)(C), 96 Stat. 503.) AMENDMENTS 1982-Subsec. (c). Pub. L. 97-248, § 234(b)(2)(C)(i), substituted "shall be the date on which payment would have been required if such remainder had been the tax" for "shall be considered to be the dates on which payments would have been required if such remainder had been the tax and the taxpayer had elected to pay the tax in installments as provided in section 6152" in the last sentence. Subsec. (g)(2). Pub. L. 97-248, § 234(b)(2)(C)(ii), substituted "date on which payment would have been required if there had been no extension with respect to such amount" for "dates on which payments would have been required if there had been no extension with respect to such amount and the taxpayer had elected to pay the tax in installments as provided in section 6152". 1976-Subsecs. (a), (b), (d), (f), (h), (i). Pub. L. 94-455 struck out "or his delegate" following "Secretary" wherever appearing. 1958-Subsec. (d)(2). Pub. L. 85-866 inserted "certified mail or" preceding “registered mail". EFFECTIVE DATE OF 1982 Amendment Amendment by Pub. L. 97-248 applicable to taxable years beginning after Dec. 31, 1982, see section 234(e) of Pub. L. 97-248, set out as a note under section 6655 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Amendment of subsec. (d)(2) by Pub. L. 85-866 applicable only if mailing occurred after Sept. 2, 1958, see section 89(d) of Pub. L. 85-866, set out as a note under section 7502 of this title. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 6040, 6411, 6864 of this title. § 6165. Bonds where time to pay tax or deficiency has been extended In the event the Secretary grants any extension of time within which to pay any tax or any deficiency therein, the Secretary may require the taxpayer to furnish a bond in such amount (not exceeding double the amount with respect to which the extension is granted) conditioned upon the payment of the amount extended in accordance with the terms of such extension. (Aug. 16, 1954, ch. 736, 68A Stat. 766; Oct. 4, 1976, Pub. L. 94-455, title XIX, § 1906(b)(13)(A), 90 Stat. 1834.) AMENDMENTS 1976-Pub. L. 94-455 struck out "or his delegate" following "Secretary" wherever appearing. CROSS REFERENCES Form of bond, see section 7101 of this title. Jurisdiction of district court of action by the United States, see section 1345 of Title 28, Judiciary and Judicial Procedure. SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 6158, 6163, 6166, 6167, 6324A, 7103 of this title. § 6166. Extension of time for payment of estate tax where estate consists largely of interest in closely held business (a) 5-year deferral; 10-year installment payment (1) In general If the value of an interest in a closely held business which is included in determining the gross estate of a decedent who was (at the date of his death) a citizen or resident of the United States exceeds 35 percent of the adjusted gross estate, the executor may elect to pay part or all of the tax imposed by section 2001 in 2 or more (but not exceeding 10) equal installments. (2) Limitation The maximum amount of tax which may be paid in installments under this subsection shall be an amount which bears the same ratio to the tax imposed by section 2001 (reduced by the credits against such tax) as— (A) the closely held business amount, bears to (B) the amount of the adjusted gross estate. (3) Date for payment of installments If an election is made under paragraph (1), the first installment shall be paid on or before the date selected by the executor which is not more than 5 years after the date prescribed by section 6151(a) for payment of the tax, and each succeeding installment shall be paid on or before the date which is 1 year after the date prescribed by this paragraph for payment of the preceding installment. (b) Definitions and special rules (1) Interest in closely held business For purposes of this section, the term "interest in a closely held business” means— (A) an interest as a proprietor in a trade or business carried on as a proprietorship; (B) an interest as a partner in a partnership carrying on a trade or business, if— (i) 20 percent or more of the total capital interest in such partnership is included in determining the gross estate of the decedent, or (ii) such partnership had 15 or fewer partners; or (C) stock in a corporation carrying on a trade or business if (i) 20 percent or more in value of the voting stock of such corporation is included in determining the gross estate of the decedent, or (ii) such corporation had 15 or fewer shareholders. (2) Rules for applying paragraph (1) For purposes of paragraph (1)— (A) Time for testing Determinations shall be made as of the time immediately before the decedent's death. (B) Certain interests held by husband and wife Stock or a partnership interest which— (i) is community property of a husband and wife (or the income from which is community income) under the applicable community property law of a State, or (ii) is held by a husband and wife as joint tenants, tenants by the entirety, or tenants in common, shall be treated as owned by one shareholder or one partner, as the case may be. (C) Indirect ownership Property owned, directly or indirectly, by or for a corporation, partnership, estate, or trust shall be considered as being owned proportionately by or for its shareholders, partners, or beneficiaries. For purposes of the preceding sentence, a person shall be treated as a beneficiary of any trust only if such person has a present interest in the trust. (D) Certain interests held by members of decedent's family All stock and all partnership interests held by the decedent or by any member of his family (within the meaning of section 267(c)(4)) shall be treated as owned by the decedent. (3) Farmhouses and certain other structures taken into account For purposes of the 35-percent requirement of subsection (a)(1), an interest in a closely held business which is the business of farming includes an interest in residential buildings and related improvements on the farm which are occupied on a regular basis by the owner or lessee of the farm or by persons employed by such owner or lessee for purposes of operating or maintaining the farm. (4) Value For purposes of this section, value shall be value determined for purposes of chapter 11 (relating to estate tax). (5) Closely held business amount For purposes of this section, the term "closely held business amount" means the value of the interest in a closely held business which qualifies under subsection (a)(1). (6) Adjusted gross estate For purposes of this section, the term, "adjusted gross estate" means the value of the gross estate reduced by the sum of the amounts allowable as a deduction under section 2053 or 2054. Such sum shall be determined on the basis of the facts and circumstances in existence on the date (including ex tensions) for filing the return of tax imposed by section 2001 (or, if earlier, the date on which such return is filed). (7) Partnership interests and stock which is not readily tradable (A) In general If the executor elects the benefits of this paragraph (at such time and in such manner as the Secretary shall by regulations prescribe), then (i) for purposes of paragraph (1)(B)(i) or (1)(C)(i) (whichever is appropriate) and for purposes of subsection (c), any capital interest in a partnership and any nonreadily-tradable stock which (after the application of paragraph (2)) is treated as owned by the decedent shall be treated as included in determining the value of the decedent's gross estate, (ii) the executor shall be treated as having selected under subsection (a)(3) the date prescribed by section 6151(a), and (iii) section 6601(j) (relating to 4-percent rate of interest) shall not apply. (B) Non-readily-tradable stock defined For purposes of this paragraph, the term "non-readily-tradable stock" means stock for which, at the time of the decedent's death, there was no market on a stock exchange or in an over-the-counter market. (c) Special rule for interest in 2 or more closely held businesses For purposes of this section, interest in 2 or more closely held businesses, with respect to each of which there is included in determining the value of the decedent's gross estate 20 percent or more of the total value of each such business, shall be treated as an interest in a single closely held business. For purposes of the 20-percent requirement of the preceding sentence, an interest in a closely held business which represents the surviving spouse's interest in property held by the decedent and the surviving spouse as community property or as joint tenants, tenants by the entirety, or tenants in common shall be treated as having been included in determining the value of the decedent's gross estate. (d) Election Any election under subsection (a) shall be made not later than the time prescribed by section 6075(a) for filing the return of tax imposed by section 2001 (including extensions thereof), and shall be made in such manner as the Secretary shall by regulations prescribe. If an election under subsection (a) is made, the provisions of this subtitle shall apply as though the Secretary were extending the time for payment of the tax. (e) Proration of deficiency to installments If an election is made under subsection (a) to pay any part of the tax imposed by section 2001 in installments and a deficiency has been assessed, the deficiency shall (subject to the limitation provided by subsection (a)(2)) be prorated to the installments payable under subsection (a). The part of the deficiency so prorated to any installment the date for payment of which has not arrived shall be collected at the same time as, and as a part of, such installment. The part of the deficiency so prorated to any installment the date for payment of which has arrived shall be paid upon notice and demand from the Secretary. This subsection shall not apply if the deficiency is due to negligence, to intentional disregard of rules and regulations, or to fraud with intent to evade tax. (f) Time for payment of interest If the time for payment of any amount of tax has been extended under this section(1) Interest for first 5 years Interest payable under section 6601 of any unpaid portion of such amount attributable to the first 5 years after the date prescribed by section 6151(a) for payment of the tax shall be paid annually. (2) Interest for periods after first 5 years Interest payable under section 6601 on any unpaid portion of such amount attributable to any period after the 5-year period referred to in paragraph (1) shall be paid annually at the same time as, and as a part of, each installment payment of the tax. (3) Interest in the case of certain deficiencies In the case of a deficiency to which subsection (e) applies which is assessed after the close of the 5-year period referred to in paragraph (1), interest attributable to such 5-year period, and interest assigned under paragraph (2) to any installment the date for payment of which has arrived on or before the date of the assessment of the deficiency, shall be paid upon notice and demand from the Secretary. (4) Selection of shorter period If the executor has selected a period shorter than 5 years under subsection (a)(3), such shorter period shall be substituted for 5 years in paragraphs (1), (2), and (3) of this subsection. (g) Acceleration of payment (1) Disposition of interest; withdrawal of funds from business (A) If (i)(I) any portion of an interest in a closely held business which qualifies under subsection (a)(1) is distributed, sold, exchanged, or otherwise disposed of, or (II) money and other property attributable to such an interest is withdrawn from such trade or business, and (ii) the aggregate of such distributions, sales, exchanges, or other dispositions and withdrawals equals or exceeds 50 percent of the value of such interest, then the extension of time for payment of tax provided in subsection (a) shall cease to apply, and the unpaid portion of the tax payable in installments shall be paid upon notice and demand from the Secretary. |