Page:United States Statutes at Large Volume 52.djvu/603

 PUBLIC LAWS-CH. 289 -MAY 28, 1938 Amount. Credit or refund of deficiency paid. 45 Stat. 874. Credits or refunds. Ante, p. 544. Deficiency divi- dends. Definition. Effect on dividends paid credit. For taxable year in which paid. and additions to the tax provided by law not paid on or before the date when claim for a deficiency dividend credit is filed under sub- section (d). The amount/of such credit shall be 65 per centum of the amount of deficiency dividends, as defined in subsection (c), not in excess of $2,000, plus 75 per centum of the amount of such divi- dends in excess of $2,000; but such credit shall not exceed the portion of the deficiency so established which is not paid on or before the date of the closing agreement, or the date the decision of the Board or the judgment becomes final, as the case may be. Such credit shall be allowed as of the date the claim for deficiency dividend credit is filed. (b) CREDIT OR REFUND OF DEFICIENCY PAID. -When the Commis- sioner has determined that there is a deficiency with respect to the tax imposed by this title and the corporation has paid any portion of such asserted deficiency and it has been established- (1) by a decision of the Board of Tax Appeals which has become final; or (2) by a closing agreement made under section 606 of the Revenue Act of 1928, as amended; or (3) by a final judgment in a suit against the United States for refund- (A) if such suit is brought within six months after the corporation became entitled to bring suit? and (B) if claim for refund was filed within six months after the payment of such amount; that any portion of the amount so paid was the whole or a part of a deficiency at the time when paid, then there shall be credited or refunded to the corporation an amount equal to 65 per centum of the amount of deficiency dividends not in excess of $2,000, plus 75 per centum of the amount of such dividends in excess of $2,000, but such credit or refund shall not exceed the portion so paid by the corporation. Such credit or refund shall be made as provided in section 322 but without regard to subsection (b) or subsection (c) thereof. No interest shall be allowed on such credit or refund. No credit or refund shall be made under this subsection with respect to any amount of tax paid after the date of the closing agreement, or the date the decision of the Board or the judgment becomes final, as the case may be. (c) DEFICIENCY DIVIDENDS.- (1) DEFINITION.-For the purpose of this title, the term "deficiency dividends" means the amount of the dividends paid, on or after the date of the closing agreement or on or after the date the decision of the Board or the judgment becomes final, as the case may be, and prior to filing claim under subsection (d), which are includible, for the purposes of Title I, in the computation of the basic surtax credit for the year of distribu- tion. No dividends shall be considered as deficiency dividends for the purposes of allowance of credit under subsection (a) unless (under regulations prescribed by the Commissioner with the approval of the Secretary) the corporation files, within thirty days after the date of the closing agreement, or the date upon which the decision of the Board or judgment becomes final, as the case may be, notification (which specifies the amount of the credit intended to be claimed) of its intention to have the dividends so considered. (2) EFFECT ON DIVIDENDS PAID CREDIT. - - (A) FOR TAXABLE YEAR IN WHICH PAID. -Deficiency divi- dends paid in any taxable year (to the extent of the por- tion thereof with respect to which the credit under sub- 562 [52 STAT.

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