Page:United States Statutes at Large Volume 98 Part 1.djvu/805

 PUBLIC LAW 98-369—JULY 18, 1984 at the end of paragraph (2) and inserting in lieu thereof a period, and (ii) by striking out "paragraphs (2), (3), and (4)" in the last sentence and inserting in lieu thereof "paragraph (2)", (B) Subsection (b) of section 1561 is amended— (i) by striking out paragraphs (3) and (4) and by adding "and" at the end of paragraph (1), and (ii) by striking out ", (2), (3), or (4)" and inserting in lieu thereof "or (2)". (22) Subsections (a)(4) and (b)(2)(D) of section 1563 (defining controlled group of corporations) are each amended by striking out "section 802" and inserting in lieu thereof "section 8 0 1 '. (23) Paragraph (2) of section 4371 (relating to imposition of tax on policies issued by foreign insurers) is amended by striking out "section 819" and inserting in lieu thereof "section 813. (24)(A) Subsection (c) of section 6501 (relating to limitations on assessment and collection) is amended by striking out paragraph (6) and by redesignating paragraph (7) as paragraph (6). (B) Subsection (k) of section 6501 (relating to reductions of policyholders surplus account of life insurance companies) is hereby repealed. (25) Subsection (d) of section 6511 (relating to limitations on credit or refund) is amended by striking out paragraph (6) and by redesignating paragraph (7) as paragraph (6). (26) Subsection (d) of section 6601 (relating to interest on underpayments, etc.) is amended by striking out paragraph (3) and by redesignating paragraph (4) as paragraph (3). (27) Subsection (0 of section 6611 (relating to interest on overpayments) is amended by striking out paragraph (4). SEC. 212. CERTAIN REINSURANCE AGREEMENTS. (a) IN GENERAL.—Part IV of subchapter L of chapter 1 (relating to provisions of general application) is amended by adding at the end thereof the following new section: "SEC. 845. CERTAIN REINSURANCE AGREEMENTS. "(a) ALLOCATION IN CASE OP REINSURANCE AGREEMENT INVOLVING TAX AVOIDANCE OR EVASION.—In the case of 2 or more related

persons (within the meaning of section 482) who are parties to a reinsurance agreement (or where one of the parties to a reinsurance agreement is, with respect to any contract covered by the agreement, in effect an agent of another party to such agreement or a conduit between related persons), the Secretary may— "(1) allocate between or among such persons income (whether investment income, premium, or otherwise), deductions, assets, reserves, credits, and other items related to such agreement, "(2) recharacterize any such items, or "(3) make any other adjustment, if he determines that such allocation, recharacterization, or adjustment is necessary to reflect the proper source and character of the taxable income (or any item described in paragraph (1) relating to such taxable income) of each such person. "(b) REINSURANCE CONTRACT HAVING SIGNIFICANT TAX AVOIDANCE

EFFECT.—If the Secretary determines that any reinsurance contract has a significant tax avoidance effect on any party to such contract, the Secretary may make proper adjustments with respect to such party to eliminate such tax avoidance effect (including treating such

98 STAT. 757

26 USC 1561.

26 USC 1563. 26 USC 4371. 26 USC 6501.

26 USC 6511. 26 USC 6601. 26 USC 6611.

26 USC 845.

�