Page:United States Statutes at Large Volume 56 Part 1.djvu/884

 PUBLIC LAWS--CH. 619-OCT. 21, 1942 Ante, p. 852. Conditions. 53 Stat. 56 . 26U. S .C .§ 131 (a). 53 Stat. 35. 26U. .C. 102; Supp. I, § 102. Ante, pp. 807, 835, 836. Post, p. 884. "(f) DETERMINATION OF TAX BENEFIrs. -The determination as to whether and to what extent an allowable deduction on account of the destruction or seizure of property described in subsection (a) did or did not result in a reduction of any tax of the taxpayer under this chapter shall be made in accordance with regulations prescribed by the Commissioner with the approval of the Secretary." (b) TAXABLE YEARS TO WHICH AMENDMENTS APPLICABLE.-The amendments made by this section shall be applicable to taxable years beginning after December 31, 1940. SEC. 157. RECOVERY OF UNCONSTITUTIONAL FEDERAL TAXES. (a) IN GENERAL. - Chapter 1 of the Internal Revenue Code is amended by inserting after section 127 the following new section: "SEC. 128. RECOVERY OF UNCONSTITUTIONAL FEDERAL TAXES. "Income (excluding interest) attributable to the recovery during the taxable year of a tax imposed by the United States which has been held unconstitutional, and in respect of which a deduction was allowed in a prior taxable year may be excluded from gross income for the taxable year, and the deduction allowed in respect thereof in such prior taxable year treated as not having been allowable, if- "(a) The taxpayer elects in writing (at such time and in such manner as may be prescribed by regulations prescribed by the Commissioner with the approval of the Secretary) to treat such deduction as not having been allowable for such prior taxable year, and "(b) The taxpayer consents in writing to the assessment, within such period as may be agreed upon, of any deficiencies resulting from such treatment, even though the statutory period for the assessment of any such deficiency had expired prior to the filing of such consent." (b) TAXABLE YEARS TO WHICH APPLICABLE.- The amendment made by subsection (a) shall be applicable with respect to taxable years beginning after December 31, 1940. SEC. 158. FOREIGN TAX CREDIT. (a) CIOICE or CREDrr.-Section 131 (a) (relating to allowance of credit for taxes of foreign countries and possessions of the United States) is amended to read as follows: "(a) ALLOWANCE OF CREDIT. -I f the taxpayer chooses to have the benefits of this section, the tax imposed by this chapter, except the tax imposed under section 102 or section 450, shall be credited with: "(1) CITIZEN AND DOMESTIC CORPORATIONS.- In the case of a citizen of the United States and of a domestic corporation, the amount of any income, war-profits, and excess-profits taxes paid or accrued during the taxable year to any foreign country or to any possession of the United States; and "(2) RESIDENT OF UNITED STATES. -In the case of a resident of the United States, the amount of any such taxes paid or accrued during the taxable year to any possession of the United States; and "(3) ALIEN RESIDENT OF UNITED STATES.- In the case of an alien resident of the United States, the amount of any such taxes paid or accrued during the taxable year to any foreign country, if the foreign country of which such alien resident is a citizen or sub- ject, in imposing such taxes, allows a similar credit to citizens of the United States residing in such country; and 856 [56 STAT.

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