§ 7507. Exemption of insolvent banks from tax

Statutory text

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.

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.

Refund; reassessment; statutes of limitation

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.

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.

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).

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.

Exception of employment taxes

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

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1954
Aug. 16, 1954, ch. 736, 68A Stat. 897 · 68A Stat. 897
Enacted · 26 U.S.C. § 7507
Aug. 16, 1954, ch. 736, 68A Stat. 897
Source evidence
Code source credit
Aug. 16, 1954, ch. 736, 68A Stat. 897
1976
Pub. L. 94–455 § 1906(b)(13)(A) · 90 Stat. 1520
Struck · 26 U.S.C. § 7507(a)
Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”
Source evidence
Code amendment note
Subsec. (a). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Enacted provision · exact public law section
(A) The Internal Revenue Code of 1954, as amended by this Act, is amended by striking out “Secretary or his delegate” each place it appears and inserting in lieu thereof “Secretary”.
Effective date note
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.
1976
Pub. L. 94–455 § 1906(a)(50) · 90 Stat. 1520
Struck · 26 U.S.C. § 7507(c)
Pub. L. 94–455, § 1906(a)(50), struck out “after May 28, 1938” in par. (2) after “or remitted” and in par. (3) after “been refunded”
Source evidence
Code amendment note
Subsec. (c). Pub. L. 94–455, § 1906(a)(50), struck out “after May 28, 1938” in par. (2) after “or remitted” and in par. (3) after “been refunded”.
Enacted provision · exact public law section
(50) Amendments of section 7507.— Paragraphs (2) and (3) of section 7507(c) (relating to insolvent hanks) are each amended 26 USC 7507. by striking out “after May 28, 1938,”.
Effective date note
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.

2 of 3 references resolved to an enrolled provision · 1 partial

Editorial Notes

Amendments

1976—Subsec. (a). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.

Subsec. (c). Pub. L. 94–455, § 1906(a)(50), struck out “after May 28, 1938” in par. (2) after “or remitted” and in par. (3) after “been refunded”.

Statutory Notes and Related Subsidiaries

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.

Credits

1954–1976 · 2 acts

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

Show as published

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