Page:United States Statutes at Large Volume 52.djvu/956

 52 STAT.] 75Tn CONG., 3D SESS.-CH. 575--JUNE 22, 1938 "SEC. 394. The clerk and, in the case of a reference, the referee after such reference, shall forthwith transmit to the Secretary of the Treasury copies of- "(1) all petitions filed under sections 321 and 322 of this Act; "(2) all notices given in a proceeding under this chapter; "(3) all orders dismissing proceedings or directing that bankruptcy be proceeded with, discharging debtors, closing estates, and setting aside confirmations; "(4) all orders appointing receivers or continuing debtors in posses- sion; "(5) all orders confirming arrangements, together with copies of such arrangements; "(6) all orders approving alterations or modifications in arrange- ments, together with copies of such alterations or modifications; "(7) all applications for allowances for compensation and expenses, and the orders making or refusing to make such allowances; and "(8) such other papers filed in the proceedings as the Secretary of the Treasury may request or which the court may direct to be trans- mitted to him. "Any order fixing the time for confirming an arrangement which affects claims of the United States shall include a notice to the Secre- tary of the Treasury of not less than fifteen days. "SEC. 395. Except as provided in section 396 of this Act, no income or profit, taxable under any law of the United States or of any State now in force or which may hereafter be enacted, shall, in respect to the adjustment of the indebtedness of a debtor in a proceeding under this chapter, be deemed to have accrued to or to have been realized by a debtor or a corporation organized or made use of for effectuating an arrangement under this chapter by reason of a modifi- cation in or cancellation in whole or in part of any such indebtedness in a proceeding under this chapter: Provided, however, That if it shall be made to appear that the arrangement had for one of its principal purposes the evasion of any income tax, the exemption provided by this section shall be disallowed. "SEC. 39G. In determining the basis of property for any purposes of any law of the United States or of a State imposing a tax upon income, the basis of the debtor's property (other than money) or of such property (other than money) as is transferred to any person required to use the debtor's basis in whole or in part shall be decreased by an amount equal to the amount by which the indebtedness of the debtor, not including accrued interest unpaid and not resulting in a tax benefit on any income tax return, has been cancelled or reduced in a proceeding under this chapter. The Commissioner of Internal Revenue, with the approval of the Secretary of the Treasury, shall prescribe such regulations as he may deem necessary in order to reflect such decrease in basis for Federal income tax purposes and otherwise carry into effect the purposes of this section. "SEC. 397. Any provision in this chapter to the contrary notwith- standing, all taxes which may be found to be owing to the United States or any State from a debtor within one year from the date of the filing of a petition under this chapter, and have not been assessed prior to the date of the confirmation of an arrangement under this chapter, and all taxes which may become owing to the United States or any State from a receiver or trustee of a debtor or from a debtor in possession, shall be assessed against, may be collected from, and shall be paid by the debtor or the corporation organized or made use of for effectuating an arrangement under this chapter: Provided, however, That the United States or any State may in writing accept Transmittal of cer- tain papers to Secre- tary of the Treasury. Ante, p. 907. Certain income, etc., not deemed to have accrued by rea- son of modification, etc., of indebtedness. Proviso. If arrangement for purpose of tax evasion. Determination of basis of property for income tax purposes. Taxes owing within one year from filing petition and not as- sessed prior to confir- mation of arrange- ment; payment. Proviso. Acceptance of provi- sions dealing with as- sumption, etc., of tax.

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