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Taxable Years Beginning in 1940

from the tax otherwise computed under this subchapter for the taxable year with respect to which such inconsistent positions are adopted.

Sec. 734. (c) (3) If all the adjustments under this section, made on account of the adoption of an inconsistent position or positions with respect to one taxable year under this subchapter, result in an aggregate net increase, the tax imposed by this subchapter shall in no case be less than the amount of such aggregate net increase.

Sec. 734. (c) (4) If all the adjustments under this section, made on account of the adoption of an inconsistent position or positions with respect to a taxable year under this subchapter (hereinafter in this paragraph called the current taxable year), result in an aggregate net decrease, and the amount of such decrease exceeds the tax imposed by this subchapter (without regard to the provisions of this section) for the current taxable year, such excess shall be subtracted from the tax imposed by this subchapter for each succeeding taxable year, but the amount of the excess to be so subtracted shall be reduced by the reduction in tax for intervening taxable years which has resulted from the subtraction of such excess from the tax imposed for each such year.

Sec. 734. (d) Ascertainment of amount of adjustment.-In computing the amount of an adjustment under this section there shall first be ascertained the amount of the income taxes previously determined for each of the prior taxable years for which correction is prevented. The amount of each such tax previously determined for each such taxable year shall be (1) the tax shown by the taxpayer, or by the predecessor, upon the return for such prior taxable year, increased by the amounts previously assessed (or collected without assessment) as deficiencies, and decreased by the amounts previously abated, credited, refunded, or otherwise repaid in respect of such tax;

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Taxable Years
Beginning in 1943

Taxable Years
Beginning in 1942

Taxable Years
Beginning in 1941

wise repaid in respect of such tax; wise repaid in respect of such tax; wise repaid in respect of such tax; or (2) if no amount was shown as or (2) if no amount was shown as or (2) if no amount was shown as the tax by such taxpayer or such the tax by such taxpayer or such the tax by such taxpayer or such predecessor upon the return, or if predecessor upon the return, or if predecessor upon the return, or if no return was made by such tax- no return was made by such tax- no return was made by such taxpayer or such predecessor, then the payer or such predecessor, then the payer or such predecessor, then the amounts previously assessed (or amounts previously assessed (or amounts previously assessed (or collected without assessment) as collected without assessment) as collected without assessment) as deficiencies, but such amounts pre-deficiencies, but such amounts pre- deficiencies, but such amounts previously assessed, or collected with- viously assessed, or collected with- viously assessed, or collected without assessment, shall be decreased out assessment, shall be decreased out assessment, shall be decreased by the amounts previously abated, by the amounts previously abated, by the amounts previously abated, credited, refunded, or otherwise credited, refunded, or otherwise credited, refunded, or otherwise repaid in respect of such tax. repaid in respect of such tax. There repaid in respect of such tax. There There shall then be ascertained the shall then be ascertained the in- shall then be ascertained the inincrease or decrease in each such crease or decrease in each such tax crease or decrease in each such tax tax previously determined for each previously determined for each such previously determined for each such such year which results solely from year which results solely from the year which results solely from the the treatment of the item consist-treatment of the item consistently treatment of the item consistently ently with the treatment accorded with the treatment accorded such with the treatment accorded such such item in the determination of item in the determination of the item in the determination of the the tax liability under this sub-tax liability under this subchapter. tax liability under this subchapter. chapter. To the increase or de- To the increase or decrease so as- To the increase or decrease so ascrease so ascertained for each such certained for each such tax for each certained for each such tax for each tax for each such year there shall such year there shall be added in- such year there shall be added inbe added interest thereon computed terest thereon computed as if the terest thereon computed as if the as if the increase or decrease con- increase or decrease constituted a increase or decrease constituted a stituted a deficiency or an overpay-deficiency or an overpayment, as deficiency or an overpayment, as ment, as the case may be, for such the case may be, for such prior the case may be, for such prior prior taxable year. Such interest taxable year. Such interest shall taxable year. Such interest shall shall be computed to the fifteenth be computed to the fifteenth day of be computed to the fifteenth day of day of the third month following the third month following the close the third month following the close the close of the excess profits tax of the excess profits tax taxable

taxable year with respect to which year with respect to which the de- of the excess profits tax taxable the determination is made. There termination is made. There shall ear with respect to which the deshall be ascertained the difference be ascertained the difference be- termination is made. There shall between the aggregate of such in-tween the aggregate of such in- be ascertained the difference becreases, plus the interest attribu- creases, plus the interest attribu- tween the aggregate of such intable to each, and the aggregate of table to each, and the aggregate of creases, plus the interest attribusuch decreases, plus the interest such decreases, plus the interest table to each, and the aggregate of attributable to each, and the net attributable to each, and the net such decreases, plus the interest increase or decrease so ascertained increase or decrease so ascertained attributable to each, and the net shall be the amount of the adjust- shall be the amount of the adjust-increase or decrease so ascertained ment under this section with respect ment under this section with respect shall be the amount of the adjustto the inconsistent treatment of to the inconsistent treatment of ment under this section with respect to the inconsistent treatment of such item.

such item.

Sec. 734. (e) Interest in case of net increase or decrease.

such item.

Sec. 734. (e) Interest in case of net increase or decrease.—

Sec. 734. (e) Interest in case of net increase or decrease.—

Sec. 734. (e) (1) If an adjustment under this section results in a net decrease, or more than one adjustment results in an aggregate

Sec. 734. (e) (1) If an adjustSec. 734. (e) (1) If an adjustment under this section results in ment under this section results in a net decrease, or more than one a net decrease, or more than one adjustment results in an aggregate adjustment results in an aggregate net decrease, the portion of such net decrease, the portion of such net decrease or aggregate net de- net decrease or aggregate net de-net decrease, the portion of such crease, as the case may be, sub-crease, as the case may be, sub-net decrease or aggregate net detracted from the tax which repre- tracted from the tax which repre- crease, as the case may be, subsents interest shall be included in sents interest shall be included in tracted from the tax which repregross income of the taxable year gross income of the taxable year sents interest shall be included in in which falls the date prescribed in which falls the date prescribed

for the payment of the tax under for the payment of the tax under gross income of the taxable year this subchapter. this subchapter. in which falls the date prescribed

Taxable Years Beginning in 1940

or (2) if no amount was shown as the tax by such taxpayer or such predecessor upon the return, or if no return was made by such taxpayer or such predecessor, then the amounts previously assessed (or collected without assessment) as deficiencies, but such amounts previously assessed, or collected without assessment, shall be decreased by the amounts previously abated, credited, refunded, or otherwise repaid in respect of such tax. There shall then be ascertained the increase or decrease in each such tax previously determined for each such year which results solely from the treatment of the item consistently with the treatment accorded such item in the determination of the tax liability under this subchapter. To the increase or decrease so ascertained for each such tax for each such year there shall be added interest thereon computed as if the increase or decrease constituted a deficiency or an overpayment, as the case may be, for such prior taxable year. Such interest shall

be computed to the fifteenth day of the third month following the close of the excess profits tar tarable year with respect to which the determination is made. There shall be ascertained the difference between the aggregate of such increases, plus the interest attributable to each, and the aggregate of such decreases, plus the interest attributable to each, and the net increase or decrease so ascertained shall be the amount of the adjustment under this section with respect to the inconsistent treatment of such item.

Sec. 734. (e) Interest in case of net increase or decrease.—

Sec. 734. (e) (1) If an adjustment under this section results in a net decrease, or more than one adjustment results in an aggregate net decrease, the portion of such net decrease or aggregate net decrease, as the case may be, subtracted from the tax which represents interest shall be included in gross income of the taxable year in which falls the date prescribed

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Taxable Years
Beginning in 1943

Taxable Years
Beginning in 1942

Taxable Years
Beginning in 1941

for the payment of the tax under this subchapter.

Sec. 734. (e) (2) If an adjustment under this section results in

Sec. 734. (e) (2) If an adjust- Sec. 734. (e) (2) If an adjustment under this section results in ment under this section results in a net increase, or more than one a net increase, or more than one a net increase, or more than one adjustment results in an aggregate adjustment results in an aggregate

net increase, the portion of such net increase, the portion of such adjustment results in an aggregate net increase or aggregate net in-net increase or aggregate net in- net increase, the portion of such crease, as the case may be, which crease, as the case may be, which net increase or aggregate net inrepresents interest shall be allowed represents interest shall be allowed crease, as the case may be, which as a deduction in computing net as a deduction in computing net income for the taxable year in income for the taxable year in which falls the date prescribed for which falls the date prescribed for the payment of the tax under this the payment of the tax under this subchapter. subchapter.

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Sec. 734, I. R. C., supra, as shown in ordinary type, added to I. R. C. by Sec. 11, Excess Profits Tax Amendments of 1941. Sec. 17 of said Act makes amendment effective as of Oct. 8, 1940, the date of enactment of Excess Profits Tax Act of 1940.

Sec. 734, I. R. C., supra, amended by Sec. 227 (a), R. A. of 1942, by adding language shown in italics. Sec. 227 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939.

Sec. 735. Nontaxable income from certain mining and timber operations.

Sec. 735. (a) Definitions.-For the purposes of this section, section 711 (a) (1) (I), and section 711 (a) (2) (K)

Sec. 735. (a) (1) Producer.-The term "producer" means a corporation which extracts minerals from a mineral property, or cuts logs from a timber block, in which an economic interest is owned by such corporation.

Sec. 735. (a) (2) Mineral unit. Sec. 735. (a) (2) Mineral unit.-The term "mineral unit" means The term "mineral unit" means a a unit of metal, coal, or nonmetallic unit of metal, coal, or nonmetallic substance in the minerals recovered substance in the minerals recovered from the operation of a mineral from the operation of a mineral property. property.

Sec. 735. (a) (3) Timber unit.The term "timber unit" means a unit of timber recovered from the operation of a timber block.

Sec. 735. (a) (3) Timber unit.The term "timber unit" means a unit of timber recovered from the operation of a timber block.

Sec. 735. (a) (4) Excess output. Sec. 735. (a) (4) Excess output. -The term "excess output" means-The term "excess output" means the excess of the mineral units or the excess of the mineral units or the timber units for the taxable the timber units for the taxable year year over the normal output. over the normal output.

represents interest shall be allowed

as a deduction in computing net income for the taxable year_in which falls the date prescribed for the payment of the tax under this subchapter.

Sec. 734, I. R. C., supra, as shown in italics before addition of language in underlined italics added to I. R. C. by Sec. 11, Excess Profits Tax Amendments of 1941. Sec. 17 of said Act makes amendment effective as of Oct. 8, 1940, the date of enactment of Excess Profits Tax Act of 1940.

Sec. 734, I. R. C., supra, amended by Sec. 227 (a), R. A. of 1942, by adding language shown in underlined italics. Sec. 227 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939.

Taxaple Years Beginning in 1940

for the payment of the tax under this subchapter.

Sec. 734. (e) (2) If an adjustment under this section results in a net increase, or more than one adjustment results in an aggregate net increase, the portion of such net increase or aggregate net increase, as the case may be, which represents interest shall be allowed as a deduction in computing_net income for the taxable year in which falls the date prescribed for the payment of the tax under this subchapter.

Sec. 734, I. R. C., supra, as shown in italics before addition of language in underlined italics added to I. R. C. by Sec. 11, Excess Profits Tax Amendments of 1941. Sec. 17 of said Act makes amendment effective as of Oct. 8, 1940, the date of enactment of Excess Profits Tax Act of 1940.

Sec. 734, I. R. C., supra, again amended by Sec. 227 (a), R. A. of 1942, by adding language shown in underlined italics. Sec. 227 (b) of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1939.

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