26 U.S.C. § 5881 — Greenmail

Page 3291 TITLE 26—INTERNAL REVENUE CODE § 5881 § 5872. Forfeitures (a) Laws applicable Any firearm involved in any violation of the provisions of this chapter shall be subject to sei- zure and forfeiture, and (except as provided in subsection (b)) all the provisions of internal rev- enue laws relating to searches, seizures, and for- feitures of unstamped articles are extended to and made to apply to the articles taxed under this chapter, and the persons to whom this chap- ter applies. (b) Disposal In the case of the forfeiture of any firearm by reason of a violation of this chapter, no notice of public sale shall be required; no such firearm shall be sold at public sale; if such firearm is forfeited for a violation of this chapter and there is no remission or mitigation of forfeiture thereof, it shall be delivered by the Secretary to the Administrator of General Services, General Services Administration, who may order such firearm destroyed or may sell it to any State, or possession, or political subdivision thereof, or at the request of the Secretary, may authorize its retention for official use of the Treasury Depart- ment, or may transfer it without charge to any executive department or independent establish- ment of the Government for use by it. (Added Pub. L. 90–618, title II, § 201, Oct. 22, 1968, 82 Stat. 1235; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes PRIOR PROVISIONS Provisions similar to those comprising this section were contained in prior section 5862, act Aug. 16, 1954, ch. 736, 68A Stat. 729, prior to the general revision of this chapter by Pub. L. 90–618. AMENDMENTS 1976—Subsec. (b). Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective on first day of first month following October 1968, see section 207(a) of Pub. L. 90–618, set out as a note under section 5801 of this title. CHAPTER 54—GREENMAIL Sec. 5881. Greenmail. § 5881. Greenmail (a) Imposition of tax There is hereby imposed on any person who re- ceives greenmail a tax equal to 50 percent of gain or other income of such person by reason of such receipt. (b) Greenmail For purposes of this section, the term ‘‘greenmail’’ means any consideration trans- ferred by a corporation (or any person acting in concert with such corporation) to directly or in- directly acquire stock of such corporation from any shareholder if— (1) such shareholder held such stock (as de- termined under section 1223) for less than 2 years before entering into the agreement to make the transfer, (2) at some time during the 2-year period ending on the date of such acquisition— (A) such shareholder, (B) any person acting in concert with such shareholder, or (C) any person who is related to such shareholder or person described in subpara- graph (B), made or threatened to make a public tender offer for stock of such corporation, and (3) such acquisition is pursuant to an offer which was not made on the same terms to all shareholders. For purposes of the preceding sentence, pay- ments made in connection with, or in trans- actions related to, an acquisition shall be treat- ed as paid in such acquisition. (c) Other definitions For purposes of this section— (1) Public tender offer The term ‘‘public tender offer’’ means any offer to purchase or otherwise acquire stock or assets in a corporation if such offer was or would be required to be filed or registered with any Federal or State agency regulating securi- ties. (2) Related person A person is related to another person if the relationship between such persons would re- sult in the disallowance of losses under section 267 or 707(b). (d) Tax applies whether or not amount recog- nized The tax imposed by this section shall apply whether or not the gain or other income referred to in subsection (a) is recognized. (e) Administrative provisions For purposes of the deficiency procedures of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A. (Added Pub. L. 100–203, title X, § 10228(a), Dec. 22, 1987, 101 Stat. 1330–417; amended Pub. L. 100–647, title II, § 2004(o)(1)(A), (B)(i), (C), (2), Nov. 10, 1988, 102 Stat. 3608.) Editorial Notes AMENDMENTS 1988—Subsec. (a). Pub. L. 100–647, § 2004(o)(1)(A), sub- stituted ‘‘gain or other income of such person by reason of such receipt’’ for ‘‘gain realized by such person on such receipt’’. Subsec. (b). Pub. L. 100–647, § 2004(o)(1)(B)(i), sub- stituted ‘‘a corporation (or any person acting in con- cert with such corporation) to directly or indirectly ac- quire stock of such corporation’’ for ‘‘a corporation to directly or indirectly acquire its stock’’. Subsec. (d). Pub. L. 100–647, § 2004(o)(1)(C), substituted ‘‘amount’’ for ‘‘gain’’ in heading and inserted ‘‘or other income’’ after ‘‘the gain’’ in text. Subsec. (e). Pub. L. 100–647, § 2004(o)(2), added subsec. (e). Page 3292 TITLE 26—INTERNAL REVENUE CODE § 5891 Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by section 2004(o)(1)(A), (C), (2) of Pub. L. 100–647 effective, except as otherwise provided, as if in- cluded in the provisions of the Revenue Act of 1987, Pub. L. 100–203, title X, to which such amendment re- lates, see section 2004(u) of Pub. L. 100–647, set out as a note under section 56 of this title. Pub. L. 100–647, title II, § 2004(o)(1)(B)(ii), Nov. 10, 1988, 102 Stat. 3608, provided that: ‘‘The amendment made by clause (i) [amending this section] shall apply to trans- actions occurring on or after March 31, 1988.’’ EFFECTIVE DATE Pub. L. 100–203, title X, § 10228(d), Dec. 22, 1987, 101 Stat. 1330–418, provided that: ‘‘The amendments made by this section [enacting this chapter and amending section 275 of this title] shall apply to consideration re- ceived after the date of the enactment of this Act [Dec. 22, 1987] in taxable years ending after such date; except that such amendments shall not apply in the case of any acquisition pursuant to a written binding contract in effect on December 15, 1987, and at all times there- after before the acquisition.’’ CHAPTER 55—STRUCTURED SETTLEMENT FACTORING TRANSACTIONS Sec. 5891. Structured settlement factoring transactions. § 5891. Structured settlement factoring trans- actions (a) Imposition of tax There is hereby imposed on any person who ac- quires directly or indirectly structured settle- ment payment rights in a structured settlement factoring transaction a tax equal to 40 percent of the factoring discount as determined under subsection (c)(4) with respect to such factoring transaction. (b) Exception for certain approved transactions (1) In general The tax under subsection (a) shall not apply in the case of a structured settlement fac- toring transaction in which the transfer of structured settlement payment rights is ap- proved in advance in a qualified order. (2) Qualified order For purposes of this section, the term ‘‘qualified order’’ means a final order, judg- ment, or decree which— (A) finds that the transfer described in paragraph (1)— (i) does not contravene any Federal or State statute or the order of any court or responsible administrative authority, and (ii) is in the best interest of the payee, taking into account the welfare and sup- port of the payee’s dependents, and (B) is issued— (i) under the authority of an applicable State statute by an applicable State court, or (ii) by the responsible administrative au- thority (if any) which has exclusive juris- diction over the underlying action or pro- ceeding which was resolved by means of the structured settlement. (3) Applicable State statute For purposes of this section, the term ‘‘ap- plicable State statute’’ means a statute pro- viding for the entry of an order, judgment, or decree described in paragraph (2)(A) which is enacted by— (A) the State in which the payee of the structured settlement is domiciled, or (B) if there is no statute described in sub- paragraph (A), the State in which either the party to the structured settlement (includ- ing an assignee under a qualified assignment under section 130) or the person issuing the funding asset for the structured settlement is domiciled or has its principal place of business. (4) Applicable State court For purposes of this section— (A) In general The term ‘‘applicable State court’’ means, with respect to any applicable State statute, a court of the State which enacted such stat- ute. (B) Special rule In the case of an applicable State statute described in paragraph (3)(B), such term also includes a court of the State in which the payee of the structured settlement is domi- ciled. (5) Qualified order dispositive A qualified order shall be treated as disposi- tive for purposes of the exception under this subsection. (c) Definitions For purposes of this section— (1) Structured settlement The term ‘‘structured settlement’’ means an arrangement— (A) which is established by— (i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipient under section 104(a)(2), or (ii) agreement for the periodic payment of compensation under any workers’ com- pensation law excludable from the gross income of the recipient under section 104(a)(1), and (B) under which the periodic payments are— (i) of the character described in subpara- graphs (A) and (B) of section 130(c)(2), and (ii) payable by a person who is a party to the suit or agreement or to the workers’ compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130. (2) Structured settlement payment rights The term ‘‘structured settlement payment rights’’ means rights to receive payments under a structured settlement. (3) Structured settlement factoring transaction (A) In general The term ‘‘structured settlement factoring transaction’’ means a transfer of structured settlement payment rights (including por- tions of structured settlement payments)