U.S. Code, Title 26, Internal Revenue Code

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Author: "U.S. Congress, Office of the Law Revision Counsel"

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§ 982. Admissibility of Documentation Maintained in Foreign Countries

(a) General rule

     If the taxpayer fails to substantially comply with any formal document request arising out of the examination of the tax treatment of any item (hereinafter in this section referred to as the "examined item") before the 90th day after the date of the mailing of such request on motion by the Secretary, any court having jurisdiction of a civil proceeding in which the tax treatment of the examined item is an issue shall prohibit the introduction by the taxpayer of any foreign-based documentation covered by such request.

(b) Reasonable cause exception

(1) In general

     Subsection (a) shall not apply with respect to any documentation if the taxpayer establishes that the failure to provide the documentation as requested by the Secretary is due to reasonable cause.

(2) Foreign nondisclosure law not reasonable cause

     For purposes of paragraph (1), the fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the requested documentation is not reasonable cause.

(c) Formal document request

     For purposes of this section—

(1) Formal document request

     The term "formal document request" means any request (made after the normal request procedures have failed to produce the requested documentation) for the production of foreign-based documentation which is mailed by registered or certified mail to the taxpayer at his last known address and which sets forth—

     (A) the time and place for the production of the documentation,

     (B) a statement of the reason the documentation previously produced (if any) is not sufficient,

     (C) a description of the documentation being sought, and

     (D) the consequences to the taxpayer of the failure to produce the documentation described in subparagraph (C).

(2) Proceeding to quash

(A) In general

     Notwithstanding any other law or rule of law, any person to whom a formal document request is mailed shall have the right to begin a proceeding to quash such request not later than the 90th day after the day such request was mailed. In any such proceeding, the Secretary may seek to compel compliance with such request.

(B) Jurisdiction

     The United States district court for the district in which the person (to whom the formal document request is mailed) resides or is found shall have jurisdiction to hear any proceeding brought under subparagraph (A). An order denying the petition shall be deemed a final order which may be appealed.

(C) Suspension of 90-day period

     The running of the 90-day period referred to in subsection (a) shall be suspended during any period during which a proceeding brought under subparagraph (A) is pending.

(d) Definitions and special rules

     For purposes of this section—

(1) Foreign-based documentation

     The term "foreign-based documentation" means any documentation which is outside the United States and which may be relevant or material to the tax treatment of the examined item.

(2) Documentation

     The term "documentation" includes books and records.

(3) Authority to extend 90-day period

     The Secretary, and any court having jurisdiction over a proceeding under subsection (c)(2), may extend the 90-day period referred to in subsection (a).

(e) Suspension of statute of limitations

     If any person takes any action as provided in subsection (c)(2), the running of any period of limitations under section 6501 (relating to the assessment and collection of tax) or under section 6531 (relating to criminal prosecutions) with respect to such person shall be suspended for the period during which the proceeding under such subsection, and appeals therein, are pending.

(Added Pub. L. 97–248, title III, § 337(a), Sept. 3, 1982, 96 Stat. 629; amended Pub. L. 98–369, div. A, title VII, § 714(k), July 18, 1984, 98 Stat. 963.)

Amendments

     1984—Subsec. (d)(3), (4). Pub. L. 98–369 redesignated par. (4) as (3) and struck out former par. (3) which provided that an item was to be treated as foreign connected if directly or indirectly from a source outside the United States, or the item (in whole or in part) purported to arise outside the United States, or was otherwise dependent on transactions occurring outside the United States.

Effective Date of 1984 Amendment

     Amendment by Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title.

Effective Date

     Section 337(c) of Pub. L. 97–248, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: "The amendments made by this section [enacting this section] shall apply with respect to formal document requests (as defined in section 982(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by this section) mailed after the date of the enactment of this Act [Sept. 3, 1982]."

Subpart J—Foreign Currency Transactions

Sec.

985.     Functional currency.

986.     Determination of foreign taxes and foreign corporation’s earnings and profits.

987.     Branch transactions.

988.     Treatment of certain foreign currency transactions.

989.     Other definitions and special rules.

Amendments

     1988—Pub. L. 100–647, title I, § 1012(v)(1)(C), Nov. 10, 1988, 102 Stat. 3529, added item 986 and struck out former item 986 "Determination of foreign corporation’s earnings and profits and foreign taxes".

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Chicago: "U.S. Congress, Office of the Law Revision Counsel", "§ 982. Admissibility of Documentation Maintained in Foreign Countries," U.S. Code, Title 26, Internal Revenue Code in U.S. Code, Title 26, Internal Revenue Code (Washington, D.C.: Government Printing Office, 2002), Original Sources, accessed January 26, 2023, http://www.originalsources.com/Document.aspx?DocID=8MVBIY9YQLL3TGU.

MLA: "U.S. Congress, Office of the Law Revision Counsel". "§ 982. Admissibility of Documentation Maintained in Foreign Countries." U.S. Code, Title 26, Internal Revenue Code, in U.S. Code, Title 26, Internal Revenue Code, Washington, D.C., Government Printing Office, 2002, Original Sources. 26 Jan. 2023. http://www.originalsources.com/Document.aspx?DocID=8MVBIY9YQLL3TGU.

Harvard: "U.S. Congress, Office of the Law Revision Counsel", '§ 982. Admissibility of Documentation Maintained in Foreign Countries' in U.S. Code, Title 26, Internal Revenue Code. cited in 2002, U.S. Code, Title 26, Internal Revenue Code, Government Printing Office, Washington, D.C.. Original Sources, retrieved 26 January 2023, from http://www.originalsources.com/Document.aspx?DocID=8MVBIY9YQLL3TGU.