Page:United States Statutes at Large Volume 98 Part 1.djvu/837

 PUBLIC LAW 98-369—JULY 18, 1984

98 STAT. 789

"In the case of the following required installments:. The due date is: 1st April 15 2nd June 15 3rd September 15 4th January 15 of the following taxable year.

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"(d) AMOUNT OF REQUIRED INSTALLMENTS.—For purposes of this section— "(1) AMOUNT.—

"(A) IN GENERAL.—Except as provided in paragraph (2), the amount of any required installment shall be 25 percent of the required annual payment. "(B) REQUIRED ANNUAL PAYMENT.—For purposes of subparagraph (A), the term 'required annual payment' means the lesser of— "(i) 80 percent of the tax shown on the return for the taxable year (or, if no return is filed, 80 percent of the tax for such year), or "(ii) 100 percent of the tax shown on the return of the individual for the preceding taxable year. Clause (ii) shall not apply if the preceding taxable year was not a taxable year of 12 months or if the individual did not file a return for such preceding taxable year.

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"(2) LOWER REQUIRED INSTALLMENT WHERE ANNUALIZED INCOME INSTALLMENT IS LESS THAN AMOUNT DETERMINED UNDER PARAGRAPH (1).—

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"(A) IN GENERAL.—In the case of any required installment, if the individual establishes that the annualized income installment is less than the amount determined under paragraph (1)— "(i) the amount of such required installment shall be the annualized income installment, and "(ii) any reduction in a required installment resulting from the application of this subparagraph shall be recaptured by increasing the amount of the next required installment determined under paragraph (1) by the amount of such reduction (and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this clause). "(B)

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DETERMINATION OF ANNUALIZED INCOME INSTALL-

MENT.—In the case of any required installment, the annualized income installment is the excess (if any) of— "(i) an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income, alternative minimum taxable income, and adjusted self-employment income for months in the taxable year ending before the due date for the installment, over "(ii) the aggregate amount of any prior required installments for the taxable year. "(C) SPECIAL RULES.—For purposes of this paragraph— "(i) ANNUALIZATION.—The taxable income, alternative minimum taxable income, and adjusted self-employment income shall be placed on an annualized basis under regulations prescribed by the Secretary, "(ii) APPLICABLE PERCENTAGE.—

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