26 U.S.C. § 981 — Untitled legal text

Page 2223 TITLE 26—INTERNAL REVENUE CODE § 982 tion with payment for purchases of export property for use, consumption, or disposition outside the United States, or in connection with the payment for services described in subsections (b)(2) and (3). (d) Export promotion expenses For purposes of this subpart, the term ‘‘export promotion expenses’’ means the following ex- penses paid or incurred in the receipt or produc- tion of export trade income— (1) a reasonable allowance for salaries or other compensation for personal services actu- ally rendered for such purpose, (2) rentals or other payments for the use of property actually used for such purpose, (3) a reasonable allowance for the exhaus- tion, wear and tear, or obsolescence of prop- erty actually used for such purpose, and (4) any other ordinary and necessary ex- penses of the corporation to the extent reason- ably allocable to the receipt or production of export trade income. No expense incurred within the United States shall be treated as an export promotion expense within the meaning of the preceding sentence, unless at least 90 percent of each category of ex- penses described in such sentence is incurred outside the United States. (e) Export property For purposes of this subpart, the term ‘‘export property’’ means any property or any interest in property manufactured, produced, grown, or ex- tracted in the United States. (f) Unrelated person For purposes of this subpart, the term ‘‘unre- lated person’’ means a person other than a re- lated person as defined in section 954(d)(3). (Added Pub. L. 87–834, § 12(a), Oct. 16, 1962, 76 Stat. 1029; amended Pub. L. 92–178, title V, § 505(c), Dec. 10, 1971, 85 Stat. 553.) Editorial Notes AMENDMENTS 1971—Subsec. (a)(3). Pub. L. 92–178 added par. (3). Statutory Notes and Related Subsidiaries TREATMENT OF CERTAIN FORMER EXPORT TRADE CORPORATIONS Pub. L. 99–514, title XVIII, § 1876(m), Oct. 22, 1986, 100 Stat. 2901, provided that: ‘‘If— ‘‘(1) a corporation which is not an export trading corporation for its most recent taxable year ending before the date of the enactment of the Tax Reform Act of 1984 [July 18, 1984] but was an export trading corporation for any prior taxable year, and ‘‘(2)(A) such corporation may not qualify as an ex- port trade corporation for any taxable year beginning after December 31, 1984, by reason of section 971(a)(3) of the Internal Revenue Code of 1954 [now 1986], or (B) such corporation makes an election, before the date 6 months after the date of the enactment of this Act [Oct. 22, 1986], not to be treated as an export trade corporation with respect to taxable years beginning after December 31, 1984, rules similar to the rules of paragraphs (2) and (4) of section 805(b) of the Tax Reform Act of 1984 [set out as a note under section 991 of this title] shall apply to such corporation. For purposes of the preceding sen- tence, the term ‘export trade corporation’ has the meaning given such term by section 971 of such Code.’’ [§ 972. Repealed. Pub. L. 94–455, title XIX, § 1901(a)(120), Oct. 4, 1976, 90 Stat. 1784] Section, Pub. L. 87–834, § 12(a), Oct. 16, 1962, 76 Stat. 1031, related to the consolidation of a group of export trade corporations for treatment as a single controlled foreign corporation for tax purposes. [SUBPART H—REPEALED] [§ 981. Repealed. Pub. L. 94–455, title X, § 1012(b)(2), Oct. 4, 1976, 90 Stat. 1614] Section, Pub. L. 89–809, title I, § 105(e)(1), Nov. 13, 1966, 80 Stat. 1565, related to income of certain nonresident United States citizens subject to foreign community property laws. SUBPART I—ADMISSIBILITY OF DOCUMENTATION MAINTAINED IN FOREIGN COUNTRIES Sec. 982. Admissibility of documentation maintained in foreign countries. Editorial Notes AMENDMENTS 1982—Pub. L. 97–248, title III, § 337(a), Sept. 3, 1982, 96 Stat. 629, added subpart I and item 982. § 982. Admissibility of documentation maintained in foreign countries (a) General rule If the taxpayer fails to substantially comply with any formal document request arising out of the examination of the tax treatment of any item (hereinafter in this section referred to as the ‘‘examined item’’) before the 90th day after the date of the mailing of such request on mo- tion by the Secretary, any court having jurisdic- tion of a civil proceeding in which the tax treat- ment of the examined item is an issue shall pro- hibit the introduction by the taxpayer of any foreign-based documentation covered by such re- quest. (b) Reasonable cause exception (1) In general Subsection (a) shall not apply with respect to any documentation if the taxpayer estab- lishes that the failure to provide the docu- mentation as requested by the Secretary is due to reasonable cause. (2) Foreign nondisclosure law not reasonable cause For purposes of paragraph (1), the fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the requested doc- umentation is not reasonable cause. (c) Formal document request For purposes of this section— (1) Formal document request The term ‘‘formal document request’’ means any request (made after the normal request procedures have failed to produce the re- quested documentation) for the production of foreign-based documentation which is mailed by registered or certified mail to the taxpayer at his last known address and which sets forth—