26 U.S.C. § 7520 — Valuation tables

Page 3960 TITLE 26—INTERNAL REVENUE CODE § 7520 L. 99–514, which is set out as a note under section 1378 of this title. AMENDMENTS 1997—Subsec. (f)(4)(A). Pub. L. 105–34 inserted at end ‘‘No penalty shall be imposed under this subparagraph on any failure which is shown to be due to reasonable cause and not willful neglect.’’ 1990—Subsec. (c)(3). Pub. L. 101–508 substituted ‘‘pay- able on the later of’’ for ‘‘payable on later of’’. 1989—Subsec. (d)(4). Pub. L. 101–239, § 7821(b), struck out ‘‘for taxable years beginning after 1987,’’ before ‘‘the applicable percentage’’ and substituted ‘‘unless more than 50 percent’’ for ‘‘if more than 50 percent’’ and ‘‘who would have been entitled’’ for ‘‘who would not have been entitled’’. Subsec. (f)(4)(B). Pub. L. 101–239, § 7721(c)(12), sub- stituted ‘‘part II of subchapter A of chapter 68’’ for ‘‘section 6653’’. 1988—Subsec. (b)(2). Pub. L. 100–647, § 2004(e)(4)(A), amended par. (2) generally. Prior to amendment, par. (2) read as follows: ‘‘the amount of the required pay- ment for the preceding applicable election year.’’ Subsec. (c). Pub. L. 100–647, § 2004(e)(5), amended sub- sec. (c) generally. Prior to amendment, subsec. (c) read as follows: ‘‘If the amount determined under subsection (b)(2) exceeds the amount determined under subsection (b)(1), then the entity shall be entitled to a refund of such excess.’’ Subsec. (d)(2)(A). Pub. L. 100–647, § 2004(e)(10), sub- stituted ‘‘(other than credits and tax-exempt income)’’ for ‘‘(other than credits)’’. Subsec. (d)(2)(B). Pub. L. 100–647, § 2004(e)(7), (10), sub- stituted ‘‘(other than credits and tax-exempt income)’’ for ‘‘(other than credits)’’ and inserted before period at end ‘‘(and such corporation shall be treated as an S cor- poration for such taxable year for purposes of para- graph (3))’’. Subsec. (d)(3)(A). Pub. L. 100–647, § 2004(e)(14)(B), struck out ‘‘or incurred’’ after ‘‘amounts paid’’. Subsec. (d)(4). Pub. L. 100–647, § 2004(e)(9), inserted at end ‘‘Notwithstanding the preceding provisions of this paragraph, for taxable years beginning after 1987, the applicable percentage for any partnership or S corpora- tion shall be 100 percent if more than 50 percent of such entity’s net income for the short taxable year which would have resulted if the entity had not made an elec- tion under section 444 would have been allocated to partners or shareholders who would not have been enti- tled to the benefits of section 806(e)(2)(C) of the Tax Re- form Act of 1986 with respect to such income.’’ Subsec. (d)(5). Pub. L. 100–647, § 2004(e)(8), added par. (5). Subsec. (e)(4). Pub. L. 100–647, § 2004(e)(4)(B), added par. (4). Subsec. (g). Pub. L. 100–647, § 2004(e)(6), substituted ‘‘including regulations providing for appropriate ad- justments in the application of this section and sec- tions 280H and 444 in cases where— ‘‘(1) 2 or more applicable election years begin in the same calendar year, or ‘‘(2) the base year is a taxable year of less than 12 months’’ for ‘‘including regulations for annualizing the income and applicable payments of an entity if the base year is a taxable year of less than 12 months’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1997 AMENDMENT Amendment by Pub. L. 105–34 applicable to taxable years beginning after Aug. 5, 1997, see section 1281(e) of Pub. L. 105–34, set out as a note under section 6652 of this title. EFFECTIVE DATE OF 1989 AMENDMENT Amendment by section 7721(c)(12) of Pub. L. 101–239 applicable to returns the due date for which (deter- mined without regard to extensions) is after Dec. 31, 1989, see section 7721(d) of Pub. L. 101–239, set out as a note under section 461 of this title. Pub. L. 101–239, title VII, § 7821(b), Dec. 19, 1989, 103 Stat. 2424, provided that the amendment made by that section is effective with respect to taxable years begin- ning after 1988. EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provisions of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment relates, see section 2004(u) of Pub. L. 100–647, set out as a note under section 56 of this title. EFFECTIVE DATE Section applicable to applicable election years begin- ning after Dec. 31, 1986, see section 10206(d)(2) of Pub. L. 100–203, set out as a note under section 444 of this title. § 7520. Valuation tables (a) General rule For purposes of this title, the value of any an- nuity, any interest for life or a term of years, or any remainder or reversionary interest shall be determined— (1) under tables prescribed by the Secretary, and (2) by using an interest rate (rounded to the nearest 2/10ths of 1 percent) equal to 120 per- cent of the Federal midterm rate in effect under section 1274(d)(1) for the month in which the valuation date falls. If an income, estate, or gift tax charitable con- tribution is allowable for any part of the prop- erty transferred, the taxpayer may elect to use such Federal midterm rate for either of the 2 months preceding the month in which the valu- ation date falls for purposes of paragraph (2). In the case of transfers of more than 1 interest in the same property with respect to which the taxpayer may use the same rate under para- graph (2), the taxpayer shall use the same rate with respect to each such interest. (b) Section not to apply for certain purposes This section shall not apply for purposes of part I of subchapter D of chapter 1 or any other provision specified in regulations. (c) Tables (1) In general The tables prescribed by the Secretary for purposes of subsection (a) shall contain valu- ation factors for a series of interest rate cat- egories. (2) Revision for recent mortality charges The Secretary shall revise the initial tables prescribed for purposes of subsection (a) to take into account the most recent mortality experience available as of the time of such re- vision. Such tables shall be revised not less frequently than once each 10 years to take into account the most recent mortality expe- rience available as of the time of the revision. (d) Valuation date For purposes of this section, the term ‘‘valu- ation date’’ means the date as of which the valu- ation is made. (e) Tables to include formulas For purposes of this section, the term ‘‘tables’’ includes formulas. Page 3961 TITLE 26—INTERNAL REVENUE CODE § 7521 (Added Pub. L. 100–647, title V, § 5031(a), Nov. 10, 1988, 102 Stat. 3668; amended Pub. L. 113–295, div. A, title II, § 221(a)(118), Dec. 19, 2014, 128 Stat. 4054.) Editorial Notes CODIFICATION Another section 7520 was renumbered section 7521 of this title. AMENDMENTS 2014—Subsec. (c)(2), (3). Pub. L. 113–295 redesignated par. (3) as (2), substituted ‘‘The Secretary’’ for ‘‘Not later than December 31, 1989, the Secretary’’ and struck out ‘‘thereafter’’ after ‘‘once each 10 years’’, and struck out former par. (2). Prior to amendment, text of par. (2) read as follows: ‘‘Not later than the day 3 months after the date of the enactment of this section, the Secretary shall prescribe initial tables for purposes of subsection (a). Such tables may be based on the same mortality experience as used for purposes of section 2031 on the date of the enactment of this section.’’ Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2014 AMENDMENT Amendment by Pub. L. 113–295 effective Dec. 19, 2014, subject to a savings provision, see section 221(b) of Pub. L. 113–295, set out as a note under section 1 of this title. EFFECTIVE DATE Pub. L. 100–647, title V, § 5031(c), Nov. 10, 1988, 102 Stat. 3669, provided that: ‘‘The amendments made by this section [enacting this section] shall apply in cases where the date as of which the valuation is to be made occurs on or after the 1st day of the 6th calendar month beginning after the date of the enactment of this Act [Nov. 10, 1988].’’ § 7521. Procedures involving taxpayer interviews (a) Recording of interviews (1) Recording by taxpayer Any officer or employee of the Internal Rev- enue Service in connection with any in-person interview with any taxpayer relating to the determination or collection of any tax shall, upon advance request of such taxpayer, allow the taxpayer to make an audio recording of such interview at the taxpayer’s own expense and with the taxpayer’s own equipment. (2) Recording by IRS officer or employee An officer or employee of the Internal Rev- enue Service may record any interview de- scribed in paragraph (1) if such officer or em- ployee— (A) informs the taxpayer of such recording prior to the interview, and (B) upon request of the taxpayer, provides the taxpayer with a transcript or copy of such recording but only if the taxpayer pro- vides reimbursement for the cost of the transcription and reproduction of such tran- script or copy. (b) Safeguards (1) Explanations of processes An officer or employee of the Internal Rev- enue Service shall before or at an initial inter- view provide to the taxpayer— (A) in the case of an in-person interview with the taxpayer relating to the determina- tion of any tax, an explanation of the audit process and the taxpayer’s rights under such process, or (B) in the case of an in-person interview with the taxpayer relating to the collection of any tax, an explanation of the collection process and the taxpayer’s rights under such process. (2) Right of consultation If the taxpayer clearly states to an officer or employee of the Internal Revenue Service at any time during any interview (other than an interview initiated by an administrative sum- mons issued under subchapter A of chapter 78) that the taxpayer wishes to consult with an attorney, certified public accountant, enrolled agent, enrolled actuary, or any other person permitted to represent the taxpayer before the Internal Revenue Service, such officer or em- ployee shall suspend such interview regardless of whether the taxpayer may have answered one or more questions. (c) Representatives holding power of attorney Any attorney, certified public accountant, en- rolled agent, enrolled actuary, or any other per- son permitted to represent the taxpayer before the Internal Revenue Service who is not dis- barred or suspended from practice before the In- ternal Revenue Service and who has a written power of attorney executed by the taxpayer may be authorized by such taxpayer to represent the taxpayer in any interview described in sub- section (a). An officer or employee of the Inter- nal Revenue Service may not require a taxpayer to accompany the representative in the absence of an administrative summons issued to the tax- payer under subchapter A of chapter 78. Such an officer or employee, with the consent of the im- mediate supervisor of such officer or employee, may notify the taxpayer directly that such offi- cer or employee believes such representative is responsible for unreasonable delay or hindrance of an Internal Revenue Service examination or investigation of the taxpayer. (d) Section not to apply to certain investigations This section shall not apply to criminal inves- tigations or investigations relating to the integ- rity of any officer or employee of the Internal Revenue Service. (Added Pub. L. 100–647, title VI, § 6228(a), Nov. 10, 1988, 102 Stat. 3731, § 7520; renumbered § 7521, Pub. L. 101–239, title VII, § 7816(u)(1), Dec. 19, 1989, 103 Stat. 2423.) Editorial Notes CODIFICATION Another section 7521 was renumbered section 7522 of this title. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 100–647, title VI, § 6228(d), Nov. 10, 1988, 102 Stat. 3732, provided that: ‘‘The amendments made by subsections (a) and (c) [enacting this section] shall apply to interviews conducted on or after the date which is 90 days after the date of the enactment of this Act [Nov. 10, 1988].’’