Page:United States Statutes at Large Volume 111 Part 1.djvu/1036

 Ill STAT. 1012 PUBLIC LAW 105-34—AUG. 5, 1997 For purposes of the preceding sentence, any net decrease in a loss shall be treated as an increase in income and a similar rule shall apply to a net increase in a loss. " (c) ADMINISTRATIVE PROVISIONS.— "(1) IN GENERAL.— Any payment required by subsection (a)(2) or (b)(1)(A)— "(A) shall be assessed and collected in the same msmner as if it were a tax imposed by subtitle C, and "(B) shall be paid on or before the return due date for the partnership taxable year in which the partnership adjustment takes effect. "(2) INTEREST. — For purposes of determining interest, any payment required by subsection (a)(2) or (b)(1)(A) shall be treated as an underpayment of tax. "(3) PENALTIES.— "(A) IN GENERAL.—In the case of any failure by any partnership to pay on the date prescribed therefor any amount required by subsection (a)(2) or (b)(1)(A), there is hereby imposed on such partnership a penalty of 10 percent of the underpayment. For purposes of the preceding sentence, the term *underpa5rment' means the excess of any payment required under this section over the amount (if any) paid on or before the date prescribed therefor. "(B) ACCURACY-RELATED AND FRAUD PENALTIES MADE APPLICABLE. —For purposes of part II of subchapter A of chapter 68, any payment required by subsection (a)(2) shall be treated as an underpayment of tax. "(d) DEFINITIONS AND SPECIAL RULES.— For purposes of this section— "(1) PARTNERSHIP ADJUSTMENT. —The term 'partnership adjustment' means any adjustment in the amount of any partnership item of an electing large partnership. "(2) WHEN ADJUSTMENT TAKES EFFECT.—A partnership adjustment takes effect— "(A) in the case of an adjustment pursuant to the decision of a court in a proceeding brought under part II, when such decision becomes final, "(B) in the case of an adjustment pursuant to any administrative adjustment request under section 6251, when such adjustment is allowed by the Secretary, or "(C) in any other case, when such adjustment is made. "(3) ADJUSTED YEAR. —The term 'adjusted year' means the partnership taxable year to which the item being adjusted relates. "(4) RETURN DUE DATE. —The term 'return due date' means, with respect to any taxable year, the date prescribed for filing the partnership return for such taxable year (determined without regard to extensions). "(5) ADJUSTMENTS INVOLVING CHANGES IN CHARACTER. — Under regulations, appropriate adjustments in the application of this section shall be made for purposes of taking into account partnership adjustments which involve a change in the character of any item of income, gain, loss, or deduction, "(e) PAYMENTS NONDEDUCTIBLE. —NO deduction shall be allowed under subtitle A for any payment required to be made by an electing large partnership under this section.

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