time is earlier) in reduction of the amount of the credit or refund of the overpayment of the tax.

Sec. 781 (b), I. R. C., supra, first amended by Sec. 250 (e), R. A. of 1943, by omitting language in stricken through type and adding language in italics, including stricken through italics in last sentence.

Retroactivity

Sec. 250 (g) of said Act makes amendment effective as if it were made by Sec. 250, R. A. of 1942, which by Sec. 201 of the latter Act makes Sec. 250 thereof applicable to taxable years beginning after Dec. 31, 1941. Accordingly, the amendment of Sec. 781 (b), I. R. C., supra, by Sec. 250 (e), R. A. of 1943, is applicable to taxable years beginning after Dec. 31, 1941. There is an exception to this in that said amendment does not apply in respect of credits or refunds made on or prior to the date of the enactment of the Revenue Act of 1943, which was Feb. 25, 1944.

Second Amendment

Sec. 781 (b), I. R. C., supra, again amended by Sec. 3 (e), T. A. A. of 1945, approved July 31, 1945, by striking out the italicized words "the time of the maturity of bonds issued with respect to such taxable year" in the last sentence thereof, and by inserting in lieu of such words the bold faced words "January 1, 1946."

Sec. 781. (c) Tax payments after cut-off date.In the case of a payment of the tax imposed by this subchapter shown on the return for any taxable year for which a credit is provided in section 780 (a), or the payment of a deficiency in respect of such tax for any such taxable year, after the date prescribed in section 780 (b) or 781 (a) but before the date of maturity of the bonds with respect to such taxable year under section 780 (e), on or after July 1, 1945 the amount of the credit under section 780 (a) for such taxable year attributable to such payment shall be paid the taxpayer in cash. No interest for the period after December 31, 1945, shall be assessed or collected on that portion of the tax or deficiency so paid equal to the credit under section 780 (a) attributable to such payment. If after January 1, 1946, so far as practicable, be available, as provided in section 780 (b), for the purchase of bonds as provided under such section, and, so far as practicable, there shall be issued to the taxpayer bende under such section with the same maturity as bonds issued with respect to such taxable year. To the extent that it is not practicable to issue bonds against such amount of the credit, the tezpayer shall be paid in each. In case after the date of maturity of the bonds of any taxable year under section 780 (e) there is any credit under section 780 (a) remaining in favor of the taxpayer, attributable to any taxable year for which a credit is provided in section 780 (a), such year, such remainder shall be paid to the taxpayer in cash. No amount of any payment made under this subsection to a taxpayer shall be included in gross income.

Sec. 781 (c), I. R. C., supra, amended by Sec. 3 (f), T. A. A. of 1945, approved July 31, 1945, by striking out language shown in stricken through type and adding language shown in italics.

Sec. 781. (d) Limitation.

Sec. 781. (d) (1) General rule.-The credit under section 780 (a) for any taxable year shall not

be greater than the excess of the amount of the tax paid under this subchapter to the United States (and not credited or refunded under the internal revenue laws) in respect of such year over the amount of tax which would be payable to the United States if the excess profits tax rate were 851⁄2 8 per centum, or if the limitation of sectio. 710 (a) (1) (B) is applicable if the amount determined under such section were reduced by 10 per centum.

Sec. 781. (d) (2) Special rule in case of fiscal years beginning in 1941 and ending after June 30, 1942.-In the case of a taxable year beginning in 1941 and ending after June 30, 1942, the credit under section 780 (a) for such taxable year shall not be greater than the excess of the tax paid under this subchapter to the United States for such taxable year (and not credited or refunded under the internal revenue laws) over the amount of tax which would be payable to the United States under this subchapter if the portion of the tentative tax determined under section 710 (a) (3) (B) were reduced by 10 per centum.

Sec. 781. (d) (3) Special rule in case of certain fiscal years beginning in 1943.-In the case of a taxable year beginning in 1943 and ending in 1944, the credit under section 780 (a) for such taxable year shall not be greater than the excess of the tax paid under this subchapter to the United States for such taxable year (and not credited or refunded under the internal revenue laws) over the amount which would be payable to the United States if—

(A) in the computation under section 710 (a) (6) (A) the excess profits tax rate were 81 per centum, or in case the limitation of section 710 (a) (1) (B) is applicable in such computation, if the amount determined under such section 710 (a) (1) (B) were reduced by 10 per centum, and

(B) in the computation under section 710 (a) (6) (B) the excess profits tax rate were 851⁄2 per centum, or in case the limitation of section 710 (a) (1) (B) is applicable in such computation, if the amount determined under such section 710 (a) (1) (B) were reduced by 10 per centum.

Sec 781 (d) (1), I. R. C.. supra, amended by Sec. 250 (f), R. A. of 1943, by adding language in underlined bold face type and language in italics and by omitting language in stricken through type. Sec. 201 of said Act makes amendment applicable to taxable years beginning after Dec. 31, 1943.

Sec. 781 (d), I. R. C., supra, further amended by Sec. 250 (f), R. A. of 1943, by adding paragraphs (2) and (3).

Retroactivity

Sec. 250 (g) of said Act makes amendment inserting new paragraph (2) applicable to taxable years beginning in 1941 and ending after June 30, 1942, and the amendment inserting new paragraph (3) applicable to taxable years beginning in 1943 and ending in 1944.

Section 781, supra, originated 1942 as Sec. 781. I. R. C.

For any amendments prior to 1944, see—
Ninth Edition, p. 946.

Sec. 782. Regulations.

The Secretary of the Treasury is authorized to prescribe, from time to time, such rules and regu

lations as may be necessary to carry out the preceding provisions of this Part.

Section 782, supra, originated 1942 as Sec. 782,
I. R. C.

For any amendments prior to 1944, see—
Ninth Edition, p. 948.

Sec. 783. Credit for debt retirement.

Sec. 783. (a) General rule.—An amount equal to 40 per centum of the amounts paid during the taxable year in repayment of the principal of indebtedness shall, at the election of the taxpayer made in its return for such year, be allowed as a credit against the tax for such year imposed by this subchapter.

Sec. 783. (b) Limitations.-The credit under subsection (a) with respect to any taxable year shall in no event exceed whichever of the following amounts is the lesser

Sec. 783. (b) (1) An amount equal to 10 per centum of the tax imposed under this subchapter for the taxable year.

Sec. 783. (b) (2) An amount equal to 40 per centum of the amount by which (A) the amount of indebtedness as of September 1, 1942 or (B) the smallest amount of indebtedness during the period beginning September 1, 1949, and ending with the elose of the preceding taxable year as of the close of any preceding taxable year ending after September 1, 1942, whichever amount is the lesser, exceeds the amount of indebtedness as of the close of the taxable year.

Sec. 783 (b) (2), I. R. C., supra, amended by Sec. 251 (a), R. A. of 1943, by adding language in italics and omitting language in stricken through type.

Retroactivity

Sec. 251 (b) of said Act makes amendment applicable to taxable years beginning after Sept. 1, 1942, but Sec. 250 (c) of said Act provides that if by reason of said amendment "a taxpayer would be entitled, had the election provided for in section 783 (a) of the Internal Revenue Code been duly made, to take any credit under such section with respect to a taxable year ended prior to the date of the enactment of this act in any amount to which such taxpayer would not be entitled were it not for such amendment, the election of the taxpayer to take such credit in such amount may be made within ninety days after the date of the enactment of this Act, which was Feb. 25, 1944.

Sec. 783. (b) (3) In case such taxable year begins in 1942 prior to September 2, 1942, and ends after September 1, 1942, an amount equal to 40 per centum of the amount by which the amount of indebtedness as of September 1, 1942, exceeds the amount of indebtedness as of the close of the taxable year. Sec. 783. (b) (4) In case such taxable year begins in 1941 or ends before September 1, 1942, zero.

No interest shall be allowed or paid by the United States on account of any overpayment of tax attributable to any credit allowed under this section.

Sec. 783. (c) Reduction of credit and of bonds outstanding under section 780.-If a credit is allowed for debt repayment in a taxable year pursuant to this section, the amount of such credit or refund shall be deducted from the credit under section 780 (a) and the amount of bonds issued under section 780 shall, to the extent necessary, be correspondingly adjusted.

Sec. 783. (d) Definition of indebtedness.-For the purposes of this section the term "indebtedness" means any indebtedness of the taxpayer or for which the taxpayer is liable evidenced by a bond, note, debenture, bill of exchange, certificate, or other evidence of indebtedness, mortgage, or deed of trust.

Sec. 783. (e) Taxable years beginning after December 31, 1943.-The provisions of this section shall not apply to taxable years beginning after December 31, 1943.

Sec. 783 (e), I. R. C., supra, added to I. R. C. by Sec. 3 (g), T. A. A. of 1945, approved July 31, 1945.

Section 783, supra, originated 1942 as Sec. 783, I. R. C. For any amendments prior to 1944, seeNinth Edition, p. 948.

Sec. 784. Ten per centum credit against excess profits tax.

Sec. 784. (a) Allowance.-Against the tax imposed by this subchapter for any taxable year beginning after December 31, 1943, there shall be allowed as a credit an amount equal to 10 per centum of such tax.

Sec. 784. (b) Special interest provision.—No interest shall be allowed or paid upon any overpayment of tax resulting from the application of subsection (a) to a taxable year ending before December 31, 1945, unless, in the return made for such taxable year, the taxpayer claims a credit under such subsection.

Sec. 784, I. R. C., supra, added to I. R. C. by Sec. 3 (h), T. A. A. of 1945, approved July 31, 1945.

Repeal of Excess-Profits Taxes

Sec. 122 (a), R. A. of 1945, repealed Subchapter E of Chapter 2, consisting of Secs. 710-784, I. R. C., supra, by providing that said sections shall not apply with respect to any taxable year beginning after Dec. 31, 1945.

See saving clause in fn. 16 below Sec. 710, supra.