26 U.S.C. § 4161 — Imposition of tax

Page 2923 TITLE 26—INTERNAL REVENUE CODE § 4161 ‘‘(B) the date on which the Secretary of Health and Human Services lists any vaccine against seasonal in- fluenza (other than any vaccine against seasonal in- fluenza listed by the Secretary prior to the date of the enactment of this Act) for purposes of compensa- tion for any vaccine-related injury or death through the Vaccine Injury Compensation Trust Fund. ‘‘(2) DELIVERIES.—For purposes of paragraph (1) and section 4131 of the Internal Revenue Code of 1986, in the case of sales on or before the effective date described in such paragraph for which delivery is made after such date, the delivery date shall be considered the sale date.’’ EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–432, div. A, title IV, § 408(c), Dec. 20, 2006, 120 Stat. 2962, provided that: ‘‘(1) SALES, ETC.—The amendments made by this sec- tion [amending this section] shall apply to sales and uses on or after the first day of the first month which begins more than 4 weeks after the date of the enact- ment of this Act [Dec. 20, 2006]. ‘‘(2) DELIVERIES.—For purposes of paragraph (1) and section 4131 of the Internal Revenue Code of 1986, in the case of sales on or before the effective date described in such paragraph for which delivery is made after such date, the delivery date shall be considered the sale date.’’ EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–357, title VIII, § 889(b), Oct. 22, 2004, 118 Stat. 1643, provided that: ‘‘(1) SALES, ETC.—The amendments made by sub- section (a) [amending this section] shall apply to sales and uses on or after the first day of the first month which begins more than 4 weeks after the date of the enactment of this Act [Oct. 22, 2004]. ‘‘(2) DELIVERIES.—For purposes of paragraph (1) and section 4131 of the Internal Revenue Code of 1986, in the case of sales on or before the effective date described in such paragraph for which delivery is made after such date, the delivery date shall be considered the sale date.’’ Pub. L. 108–357, title VIII, § 890(b), Oct. 22, 2004, 118 Stat. 1644, provided that: ‘‘(1) SALES, ETC.—The amendment made by this sec- tion [amending this section] shall apply to sales and uses on or after the later of— ‘‘(A) the first day of the first month which begins more than 4 weeks after the date of the enactment of this Act [Oct. 22, 2004], or ‘‘(B) the date on which the Secretary of Health and Human Services lists any vaccine against influenza for purposes of compensation for any vaccine-related injury or death through the Vaccine Injury Com- pensation Trust Fund. ‘‘(2) DELIVERIES.—For purposes of paragraph (1) and section 4131 of the Internal Revenue Code of 1986, in the case of sales on or before the effective date described in such paragraph for which delivery is made after such date, the delivery date shall be considered the sale date.’’ EFFECTIVE DATE OF 1999 AMENDMENT Pub. L. 106–170, title V, § 523(a)(2), Dec. 17, 1999, 113 Stat. 1927, provided that: ‘‘(A) SALES.—The amendment made by this sub- section [amending this section] shall apply to vaccine sales after the date of the enactment of this Act [Dec. 17, 1999], but shall not take effect if subsection (b) [see note below] does not take effect. ‘‘(B) DELIVERIES.—For purposes of subparagraph (A), in the case of sales on or before the date described in such subparagraph for which delivery is made after such date, the delivery date shall be considered the sale date.’’ Pub. L. 106–170, title V, § 523(b)(3), Dec. 17, 1999, 113 Stat. 1928, provided that: ‘‘The amendments made by this subsection [amending this section and section 9510 of this title and repealing provisions set out as notes under this section and section 9510 of this title] shall take effect as if included in the provisions of the Omni- bus Consolidated and Emergency Supplemental Appro- priations Act, 1999 [Pub. L. 105–277] to which they re- late.’’ EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–277, div. C, title XV, § 1503(b), div. I, title III, § 3002(b), Oct. 21, 1998, 112 Stat. 2681–741, 2681–905, which provided that amendment of this section by Pub. L. 105–277 was applicable to sales after Oct. 21, 1998, and that delivery date would be considered sale date in the case of sales on or before Oct. 21, 1998, was repealed by Pub. L. 106–170, title V, § 523(b)(1), Dec. 17, 1999, 113 Stat. 1927. EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–34 effective on the day after Aug. 5, 1997, see section 904(d) of Pub. L. 105–34, set out as a note under section 4131 of this title. EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–647, title II, § 2006(c), Nov. 10, 1988, 102 Stat. 3613, provided that: ‘‘The amendments made by this section [amending this section and section 9510 of this title] shall take effect as if included in the amend- ments made by section 9201 of the Omnibus Budget Rec- onciliation Act of 1987 [Pub. L. 100–203].’’ LIMITATION ON CERTAIN CREDITS OR REFUNDS Pub. L. 105–34, title IX, § 904(e), Aug. 5, 1997, 111 Stat. 874, provided that: ‘‘For purposes of applying section 4132(b) of the Internal Revenue Code of 1986 with re- spect to any claim for credit or refund filed before Jan- uary 1, 1999, the amount of tax taken into account shall not exceed the tax computed under the rate in effect on the day after the date of the enactment of this Act [Aug. 5, 1997].’’ Subchapter D—Recreational Equipment Part I. Sporting goods. [II. Repealed.] III. Firearms. Editorial Notes AMENDMENTS 1965—Pub. L. 89–44, title II, § 205(b), June 21, 1965, 79 Stat. 140, struck out item relating to part II. PART I—SPORTING GOODS Sec. 4161. Imposition of tax. 4162. Definitions; treatment of certain resales. Editorial Notes AMENDMENTS 1984—Pub. L. 98–369, div. A, title X, § 1015(d), July 18, 1984, 98 Stat. 1019, added item 4162. § 4161. Imposition of tax (a) Sport fishing equipment (1) Imposition of tax (A) In general There is hereby imposed on the sale of any article of sport fishing equipment by the manufacturer, producer, or importer a tax equal to 10 percent of the price for which so sold. (B) Limitation on tax imposed on fishing rods and poles The tax imposed by subparagraph (A) on any fishing rod or pole shall not exceed $10. Page 2924 TITLE 26—INTERNAL REVENUE CODE § 4161 (2) 3 percent rate of tax for electric outboard motors In the case of an electric outboard motor, paragraph (1) shall be applied by substituting ‘‘3 percent’’ for ‘‘10 percent’’. (3) 3 percent rate of tax for tackle boxes In the case of fishing tackle boxes, para- graph (1) shall be applied by substituting ‘‘3 percent’’ for ‘‘10 percent’’. (4) Parts or accessories sold in connection with taxable sale In the case of any sale by the manufacturer, producer, or importer of any article of sport fishing equipment, such article shall be treat- ed as including any parts or accessories of such article sold on or in connection therewith or with the sale thereof. (b) Bows and arrows, etc. (1) Bows (A) In general There is hereby imposed on the sale by the manufacturer, producer, or importer of any bow which has a peak draw weight of 30 pounds or more, a tax equal to 11 percent of the price for which so sold. (B) Archery equipment There is hereby imposed on the sale by the manufacturer, producer, or importer— (i) of any part or accessory suitable for inclusion in or attachment to a bow de- scribed in subparagraph (A), and (ii) of any quiver, broadhead, or point suitable for use with an arrow described in paragraph (2), a tax equal to 11 percent of the price for which so sold. (2) Arrows (A) In general There is hereby imposed on the first sale by the manufacturer, producer, or importer of any shaft (whether sold separately or in- corporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow which after its assembly— (i) measures 18 inches overall or more in length, or (ii) measures less than 18 inches overall in length but is suitable for use with a bow described in paragraph (1)(A), a tax equal to 39 cents per shaft. (B) Exemption for certain wooden arrow shafts Subparagraph (A) shall not apply to any shaft consisting of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold sepa- rately or incorporated as part of a finished or unfinished product) of a type used in the manufacture of any arrow which after its as- sembly— (i) measures 5⁄16 of an inch or less in di- ameter, and (ii) is not suitable for use with a bow de- scribed in paragraph (1)(A). (C) Adjustment for inflation (i) In general In the case of any calendar year begin- ning after 2005, the 39-cent amount speci- fied in subparagraph (A) shall be increased by an amount equal to the product of— (I) such amount, multiplied by (II) the cost-of-living adjustment de- termined under section 1(f)(3) for such calendar year, determined by sub- stituting ‘‘2004’’ for ‘‘2016’’ in subpara- graph (A)(ii) thereof. (ii) Rounding If any increase determined under clause (i) is not a multiple of 1 cent, such in- crease shall be rounded to the nearest mul- tiple of 1 cent. (3) Coordination with subsection (a) No tax shall be imposed under this sub- section with respect to any article taxable under subsection (a). (Aug. 16, 1954, ch. 736, 68A Stat. 489; Pub. L. 89–44, title II, § 205(a), June 21, 1965, 79 Stat. 140; Pub. L. 92–558, title II, § 201(a), Oct. 25, 1972, 86 Stat. 1173; Pub. L. 98–369, div. A, title X, §§ 1015(a), 1017(a), (b), July 18, 1984, 98 Stat. 1017, 1021; Pub. L. 99–514, title XVIII, § 1899A(48), Oct. 22, 1986, 100 Stat. 2961; Pub. L. 105–34, title XIV, § 1433(a), Aug. 5, 1997, 111 Stat. 1051; Pub. L. 108–357, title III, §§ 332(a)–(c), 333(a), Oct. 22, 2004, 118 Stat. 1477, 1478; Pub. L. 108–493, § 1(a)–(c), Dec. 23, 2004, 118 Stat. 3984; Pub. L. 109–59, title XI, § 11117(a), (b), Aug. 10, 2005, 119 Stat. 1951; Pub. L. 109–135, title IV, § 412(uu), Dec. 21, 2005, 119 Stat. 2640; Pub. L. 110–343, div. C, title V, § 503(a), Oct. 3, 2008, 122 Stat. 3877; Pub. L. 115–97, title I, § 11002(d)(11), Dec. 22, 2017, 131 Stat. 2062.) INFLATION ADJUSTED ITEMS FOR CERTAIN YEARS For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under section 1 of this title. Editorial Notes AMENDMENTS 2017—Subsec. (b)(2)(C)(i)(II). Pub. L. 115–97 substituted ‘‘for ‘2016’ in subparagraph (A)(ii)’’ for ‘‘for ‘1992’ in sub- paragraph (B)’’. 2008—Subsec. (b)(2)(B), (C). Pub. L. 110–343 added sub- par. (B) and redesignated former subpar. (B) as (C). 2005—Subsec. (a)(1). Pub. L. 109–59, § 11117(a), reen- acted heading without change and amended text of par. (1) generally, designating existing provisions as subpar. (A), inserting subpar. heading, and adding subpar. (B). Subsec. (a)(2). Pub. L. 109–135 amended heading and text of par. (2) generally. Prior to amendment, text read as follows: ‘‘(A) IN GENERAL.—In the case of an electric outboard motor or a sonar device suitable for finding fish, para- graph (1)(A) shall be applied by substituting ‘3 percent’ for ‘10 percent’. ‘‘(B) $30 LIMITATION ON TAX IMPOSED ON SONAR DEVICES SUITABLE FOR FINDING FISH.—The tax imposed by para- graph (1)(A) on any sonar device suitable for finding fish shall not exceed $30.’’ Pub. L. 109–59, § 11117(b), substituted ‘‘paragraph (1)(A)’’ for ‘‘paragraph (1)’’ in two places. 2004—Subsec. (a)(3), (4). Pub. L. 108–357, § 333(a), added par. (3) and redesignated former par. (3) as (4). Subsec. (b)(1). Pub. L. 108–357, § 332(a), reenacted head- ing without change and amended text of par. (1) gen- Page 2925 TITLE 26—INTERNAL REVENUE CODE § 4161 erally, substituting provisions imposing a tax on the sale of any bow which has a peak draw weight of 30 pounds or more, any part or accessory, and any quiver or broadhead suitable for use with an arrow described in par. (2), for provisions imposing a tax on the sale of any bow which has a draw weight of 10 pounds or more, any part of accessory, and any quiver suitable for use with arrows described in par. (2). Subsec. (b)(1)(B)(ii). Pub. L. 108–493, § 1(c), substituted ‘‘quiver, broadhead, or point’’ for ‘‘quiver or broad- head’’. Subsec. (b)(2). Pub. L. 108–493, § 1(b), amended heading and text of par. (2) generally, substituting provisions relating to arrows for provisions relating to arrow com- ponents. Pub. L. 108–357, § 332(c), substituted ‘‘Arrow compo- nents’’ for ‘‘Arrows’’ in heading and inserted ‘‘(other than broadheads)’’ after ‘‘point’’ in introductory provi- sions. Subsec. (b)(3), (4). Pub. L. 108–493, § 1(a), repealed Pub. L. 108–357, § 332(b). See note below. Pub. L. 108–357, § 332(b), which directed the amend- ment of subsec. (b) by adding par. (3), relating to ar- rows, and redesignating former par. (3) as (4), was re- pealed by Pub. L. 108–493, § 1(a). See Construction of 2004 Amendment note below. 1997—Subsec. (b). Pub. L. 105–34 amended subsec. (b) generally. Prior to amendment, subsec. (b) consisted of pars. (1) to (3) imposing taxes on bows and arrows and parts and accessories and providing for coordination of taxes under subsecs. (a) and (b). 1986—Subsec. (b)(1)(B)(ii). Pub. L. 99–514 substituted a comma for the period at end. 1984—Subsec. (a). Pub. L. 98–369, § 1015(a), in amending subsec. (a) generally, designated existing provisions as par. (1), substituted ‘‘any article of sport fishing equip- ment by the manufacturer, producer, or importer’’ for ‘‘fishing rods, creels, reels, and artificial lures, baits, and flies (including parts or accessories of such articles sold on or in connection therewith, or with the sale thereof) by the manufacturer, producer, or importer’’, and added pars. (2) and (3). Subsec. (b)(1)(B). Pub. L. 98–369, § 1017(a), designated existing provisions as cl. (i) and added cl. (ii). Subsec. (b)(2)(A). Pub. L. 98–369, § 1017(b)(2), struck out ‘‘(other than a fishing reel)’’ after ‘‘part or acces- sory’’. Subsec. (b)(3). Pub. L. 98–369, § 1017(b)(1), added par. (3). 1972—Subsec. (a). Pub. L. 92–558, § 201(a)(1), designated existing provisions as subsec. (a) and inserted catch- line. Subsec. (b). Pub. L. 92–558, § 201(a)(2), added subsec. (b). 1965—Pub. L. 89–44 removed 10 percent tax on equip- ment for billiards, pool, bowling, trap shooting, crick- et, croquet, badminton, curling, deck tennis, golf, la- crosse, polo, skiing, squash, table tennis, and tennis, and retained tax only for fishing equipment. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2017 AMENDMENT Amendment by Pub. L. 115–97 applicable to taxable years beginning after Dec. 31, 2017, see section 11002(e) of Pub. L. 115–97, set out as a note under section 1 of this title. EFFECTIVE DATE OF 2008 AMENDMENT Pub. L. 110–343, div. C, title V, § 503(b), Oct. 3, 2008, 122 Stat. 3877, provided that: ‘‘The amendments made by this section [amending this section] shall apply to shafts first sold after the date of enactment of this Act [Oct. 3, 2008].’’ EFFECTIVE DATE OF 2005 AMENDMENT Pub. L. 109–59, title XI, § 11117(c), Aug. 10, 2005, 119 Stat. 1951, provided that: ‘‘The amendments made by this section [amending this section] shall apply to arti- cles sold by the manufacturer, producer, or importer after September 30, 2005.’’ EFFECTIVE DATE OF 2004 AMENDMENTS Pub. L. 108–493, § 1(d), Dec. 23, 2004, 118 Stat. 3985, pro- vided that: ‘‘The amendments made by subsections (b) and (c) [amending this section] shall apply to articles sold by the manufacturer, producer, or importer after March 31, 2005.’’ Pub. L. 108–357, title III, § 332(d), Oct. 22, 2004, 118 Stat. 1478, provided that: ‘‘The amendments made by this section [amending this section] shall apply to articles sold by the manufacturer, producer, or importer after the date which is 30 days after the date of the enact- ment of this Act [Oct. 22, 2004].’’ Pub. L. 108–357, title III, § 333(b), Oct. 22, 2004, 118 Stat. 1478, provided that: ‘‘The amendments made this sec- tion [amending this section] shall apply to articles sold by the manufacturer, producer, or importer after De- cember 31, 2004.’’ EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–34, title XIV, § 1433(b), Aug. 5, 1997, 111 Stat. 1052, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to ar- ticles sold by the manufacturer, producer, or importer after September 30, 1997.’’ EFFECTIVE DATE OF 1984 AMENDMENT Amendment by section 1015(a) of Pub. L. 98–369 appli- cable with respect to articles sold by the manufacturer, producer, or importer after Sept. 30, 1984, see section 1015(e) of Pub. L. 98–369, set out as an Effective Date note under section 4162 of this title. Pub. L. 98–369, div. A, title X, § 1017(c), July 18, 1984, 98 Stat. 1021, provided that: ‘‘The amendments made by this section [amending this section] shall apply with respect to articles sold by the manufacturer, producer, or importer after September 30, 1984.’’ EFFECTIVE DATE OF 1972 AMENDMENT Pub. L. 92–558, title II, § 201(b), Oct. 25, 1972, 86 Stat. 1173, as amended by Pub. L. 93–313, June 8, 1974, 88 Stat. 238, provided that: ‘‘The amendments made by sub- section (a) of this section [amending this section] shall apply with respect to articles sold by the manufac- turer, producer, or importer thereof on or after Janu- ary 1, 1975.’’ EFFECTIVE DATE OF 1965 AMENDMENT Pub. L. 89–44, title VII, § 701(a), June 21, 1965, 79 Stat. 155, provided that: ‘‘(1) IN GENERAL.—Except as otherwise provided in this subsection, the amendments made by titles I and II of this Act [enacting sections 4094 and 6424 of this title, amending this section and sections 4055, 4057, 4061, 4091, 4216, 4218, 4221, 4222, 4227, 6011, 6206, 6412, 6416, 6675, 7210, 7603, 7604, and 7605 of this title, repealing sections 4001 to 4003, 4011 to 4013, 4021, 4022, 4031, 4051 to 4053, 4111, 4121, 4131, 4141 to 4143, 4151, 4171 to 4173, 4191, 4192, 4201, 4211, and 4224 of this title, and amending provi- sions set out as a note under section 120 of Title 23, Highways] shall apply with respect to articles sold on or after the day after the date of the enactment of this Act [June 21, 1965]. ‘‘(2) SPECIAL RULES.—The amendments made by sec- tions 201(b)(2) [amending section 4061 of this title] (re- lating to automobile parts and accessories) and 202(a) [amending section 4091 of this title] (relating to lubri- cating oil) shall apply with respect to articles sold on or after January 1, 1966. The amendments made by sec- tion 202(b) [enacting section 6424 of this title] and (c) [enacting section 4094 and amending sections 6206, 6675, 7210, 7603, 7604, and 7605 of this title] (relating to pay- ments with respect to lubricating oil) shall take effect January 1, 1966. The amendments made by section 203 [repealing sections 4111, 4121, and 4131 of this title], in- sofar as they relate to the tax imposed by section 4131 (relating to electric light bulbs) of the Code, and the Page 2926 TITLE 26—INTERNAL REVENUE CODE § 4162 amendments made by section 208 [amending sections 4216, 4218, 4221, 4222, and 4227], insofar as they relate to the tax imposed by section 4061(b) (relating to auto- motive parts and accessories), section 4091 (relating to lubricating oil), or section 4131 (relating to electric light bulbs) of the Code, shall apply with respect to ar- ticles sold on or after January 1, 1966. The amendments made by section 207 [amending sections 4216 and 6416 of this title] (relating to partial payments; sales of in- stallment accounts) and 209(a) [amending section 6412 of this title] (relating to floor stocks refunds on pas- senger automobiles, etc.) shall take effect on the day after the date of the enactment of this Act [June 21, 1965]. The amendments made by section 210 [amending provisions set out as a note under section 120 of Title 23, Highways] (relating to Highway Trust Fund) shall take effect January 1, 1966. ‘‘(3) INSTALLMENT SALES, ETC.—For purposes of para- graphs (1) and (2), an article shall not be considered sold before the day after the date of the enactment of this Act [June 21, 1965] or before January 1, 1966, as the case may be, unless possession or right to possession passes to the purchaser before such day or such date. In the case of— ‘‘(A) a lease, ‘‘(B) a contract for the sale of an article where it is provided that the price shall be paid by installments and title to the article sold does not pass until a fu- ture date notwithstanding partial payment by in- stallments, ‘‘(C) a conditional sale, or ‘‘(D) a chattel mortgage arrangement wherein it is provided that the sale price shall be paid in install- ments, entered into before such day or such date, payments made on or after such day or such date with respect to the article leased or sold shall, for purposes of this sub- section, be considered as payments made with respect to an article sold on or after such day or such date, if the lessor or vendor establishes that the amount of payments payable on or after such day or such date with respect to such article has been reduced by an amount equal to the tax reduction applicable with re- spect to the lease or sale of such article. ‘‘(4) ELECTRIC LIGHT BULBS USED IN MANUFACTURE OF ARTICLES UPON WHICH TAX IS REPEALED.—For purposes of applying section 4218(a) of the Code with respect to the use of an electric light bulb or tube by the manufac- turer, producer, or importer thereof, and for purposes of applying section 4221(d)(6)(A) of the Code with re- spect to the sale of an electric light bulb or tube for use in further manufacture, an article which was taxable under chapter 32 of the Code on the date of the enact- ment of this Act [June 21, 1965] shall, during the period beginning with the day after the date of the enactment of this Act through December 31, 1965, be treated as an article taxable under such chapter.’’ CONSTRUCTION OF 2004 AMENDMENT Pub. L. 108–493, § 1(a), Dec. 23, 2004, 118 Stat. 3984, pro- vided that: ‘‘Subsection (b) of section 332 of the Amer- ican Jobs Creation Act of 2004 [Pub. L. 108–357], and the amendments made by such subsection [amending this section], are hereby repealed; and the Internal Revenue Code of 1986 shall be applied as if such subsection and amendments had never been enacted.’’ § 4162. Definitions; treatment of certain resales (a) Sport fishing equipment defined For purposes of this part, the term ‘‘sport fish- ing equipment’’ means— (1) fishing rods and poles (and component parts therefor), (2) fishing reels, (3) fly fishing lines, and other fishing lines not over 130 pounds test, (4) fishing spears, spear guns, and spear tips, (5) items of terminal tackle, including— (A) leaders, (B) artificial lures, (C) artificial baits, (D) artificial flies, (E) fishing hooks, (F) bobbers, (G) sinkers, (H) snaps, (I) drayles, and (J) swivels, but not including natural bait or any item of terminal tackle designed for use and ordi- narily used on fishing lines not described in paragraph (3), and (6) the following items of fishing supplies and accessories— (A) fish stringers, (B) creels, (C) tackle boxes, (D) bags, baskets, and other containers de- signed to hold fish, (E) portable bait containers, (F) fishing vests, (G) landing nets, (H) gaff hooks, (I) fishing hook disgorgers, and (J) dressing for fishing lines and artificial flies, (7) fishing tip-ups and tilts, (8) fishing rod belts, fishing rodholders, fish- ing harnesses, fish fighting chairs, fishing out- riggers, and fishing downriggers, and (9) electric outboard boat motors. (b) Treatment of certain resales (1) In general If— (A) the manufacturer, producer, or im- porter sells any article taxable under section 4161(a) to any person, (B) the constructive sale price rules of sec- tion 4216(b) do not apply to such sale, and (C) such person (or any other person) sells such article to a related person with respect to the manufacturer, producer, or importer, then such related person shall be liable for tax under section 4161 in the same manner as if such related person were the manufacturer of the article. (2) Credit for tax previously paid If— (A) tax is imposed on the sale of any arti- cle by reason of paragraph (1), and (B) the related person establishes the amount of the tax which was paid on the sale described in paragraph (1)(A), the amount of the tax so paid shall be allowed as a credit against the tax imposed by reason of paragraph (1). (3) Related person For purposes of this subsection, the term ‘‘related person’’ has the meaning given such term by section 465(b)(3)(C). (4) Regulations Except to the extent provided in regulations, rules similar to the rules of this subsection