Page:United States Statutes at Large Volume 68A.djvu/380

 340

INTERNAL REVENUE CODE OF 1954;

(4) under regulations prescribed by the Secretary or his delegate, an agreement for purposes of this part, signed by the Secretary or his delegate and by any person, relating to the liability of such person (or the person for whom he acts) in respect of a tax under this subtitle for any taxable period. (b) TAXPAYER.—Notwithstanding section 7701(a) (14), the term "taxpayer" means any person subject to a tax under the applicable revenue law. (c) RELATED TAXPAYER.—For purposes of this part, the term "related taxpayer" means a taxpayer who, with the taxpayer with respect to whom a determination is made, stood, in the taxable year with respect to which the erroneous inclusion, exclusion, omission, allowance, or disallowance was made, in one of the following relationships: (1) husband and wife, (2) grantor and fiduciary, •; (3) grantor and beneficiary, . (4) fiduciary and beneficiary, legatee, or heir, (5) decedent and decedent's estate, (6) partner, or (7) member of an affiliated group of corporations (as defined in section 1504). SEC. 1314. AMOUNT AND METHOD OF ADJUSTMENT. (a) ASCERTAINMENT OF AMOUNT OF ADJUSTMENT.—In computing

the amount of an adjustment under this part there shall first be ascertained the tax previously determined for the taxable year with respect to which the error was made. The amount of the tax previously determined shall be the excess of— (1) the sum of— (A) the amount shown as the tax by the taxpayer on his return (determined as provided in section 6211(b)(1) and (3), relating to the definition of deficiency), if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus (B) the amounts previously assessed (or collected without assessment) as a deficiency, over— (2) the amount of rebates, as defined in section 6211(b)(2), made. There shall then be ascertained the increase or decrease in tax previously determined which results solely from the correct treatment of the item which was the subject of the error (with due regard given to the effect of the item in the computation of gross income, taxable income, and other matters under this subtitle). A similar computation shall be made for any other taxable year affected, or treated as aff'ected, by a net operating loss deduction (as defined in section 172) or by a capital loss carryover (as defined in section 1212), determined with reference to the taxable year with respect to which the error was made. The amount so ascertained (together with any amounts wrongfully collected as additions to the tax or interest, as a result of such error) for each taxable year shall be the amount of the adjustment for that taxable year. (b) M E T H O D OF ADJUSTMENT.—The adjustment authorized in section 1311(a) shall be made by assessing and collecting, or refunding or crediting, the amount thereof in the same manner as if it were a § 1313(a)(4)

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