Page:United States Statutes at Large Volume 90 Part 2.djvu/277

 PUBLIC LAW 94-455—OCT. 4, 1976 r u n n i n g of the statute of limitations provided i n section 6501 on the making of assessments, and the bringing of distraint or a proceeding in court for collection, in respect of the deficiency established by a determination under this section, and all interest, additions to tax, additional amounts, or assessable penalties i n respect thereof, shall be suspended for a period of 2 years after the date of the determination. " (2) STAY o r COLLECTION.—In the case of any deficiency established by a determination under this section— " (A) the collection of the deficiency, and all interest, additions to tax, additional amounts, and assessable penalties i n respect thereof, shall, except i n cases of jeopardy, be stayed until the expiration of 120 days after the date of the determination, and " (B) if claim for a deficiency dividend deduction is filed under subsection (e), the collection of such part of the deficiency as is not reduced by the deduction for deficiency dividends provided i n subsection (a) shall be stayed u n t i l the date the claim is disallowed (in whole or in part), and if disallowed i n part collection shall be made only with respect to the part disallowed. No distraint or proceeding in court shall be begun for the collection of a n amount the collection of which is stayed under subparagraph (A) or (B) during the period for which the collection of such amount is stayed.

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" (g) DEDUCTION D E N I E D I N CASE OF F R A U D. — N o deficiency dividend

deduction shall be allowed under subsection (a) if the determination contains a finding that any part of any deficiency attributable to an adjustment with respect to the taxable year is due to fraud with intent to evade tax o r to willful failure to file a n income tax return within the time prescribed by law or prescribed by the Secretary i n pursuance of law. "(h)

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PENALTY.—

"For assessable penalty with respect to liability for tax of real estate investment trust which is allowed a deduction under subsection (a), see section 6697." (2) The table of sections for such part II is amended by a d d i n g at the end thereof the following new item: "Sec. 859. Deduction for deficiency dividends." (b) PENALTY.—

(1) Subchapter B of chapter 68 (relating to assessable penalties) is amended by a d d i n g a t the end thereof the following new section: "SEC. 6697. ASSESSABLE PENALTIES WITH RESPECT TO LIABILITY FOR 26 USC 6697. TAX OF REAL ESTATE INVESTMENT TRUSTS. " (a) CIVIL P E N A L T Y. — I n addition to any other penalty provided by law, any real estate investment t r u s t whose tax liability for any taxable year is deemed to be increased pursuant to section 859(b)(2)(A) Anu, p. 1742. (relating to interest and additions to tax determined with respect to the amount of the deduction for deficiency dividends allowed) shall p a y a penalty in an amount equal to the amount of interest for which such t r u s t is liable that is attributable solely to such increase. " (b) 50-PERCENT LIMITATION.—The penalty payable under this section w i t h respect to any determination shall not exceed one-half of the amount of the deduction allowed by section 859(a) for such taxable year.

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