Chapter 65, Subchapter B, Section 6416, Subsection (b) · 26 U.S.C. Chapter 65 — ABATEMENTS, CREDITS, AND REFUNDS

Contents

(b)Under regulations prescribed by the Secretary, credit or refund (without interest) shall be allowed or made in respect of the overpayments determined under the following paragraphs:

(1)

(A)Except as provided in subparagraph (B) or (C), if the price of any article in respect of which a tax, based on such price, is imposed by chapter 31 or 32, is readjusted by reason of the return or repossession of the article or a covering or container, or by a bona fide discount, rebate, or allowance, including a readjustment for local advertising (but only to the extent provided in section 4216(e)(2) and (3)), the part of the tax proportionate to the part of the price repaid or credited to the purchaser shall be deemed to be an overpayment.

(B)Subparagraph (A) shall not apply in the case of an article in respect of which tax was computed under section 4223(b)(2); but if the price for which such article was sold is readjusted by reason of the return or repossession of the article, the part of the tax proportionate to the part of such price repaid or credited to the purchaser shall be deemed to be an overpayment.

(C)No credit or refund of any tax imposed by subsection (a) or (b) of section 4071 shall be allowed or made by reason of an adjustment of a tire pursuant to a warranty or guarantee.

(2)The tax paid under chapter 32 (or under subsection (a) or (d) of section 4041 in respect of sales or under section 4051) in respect of any article shall be deemed to be an overpayment if such article was, by any person—

(A)exported;

(B)used or sold for use as supplies for vessels or aircraft;

(C)sold to a State or local government for the exclusive use of a State or local government;

(D)sold to a nonprofit educational organization for its exclusive use;

(E)sold to a qualified blood collector organization (as defined in section 7701(a)(49)) for such organization’s exclusive use in the collection, storage, or transportation of blood;

(F)in the case of any tire taxable under section 4071(a), sold to any person for use as described in section 4221(e)(3); or

(G)in the case of gasoline, used or sold for use in the production of special fuels referred to in section 4041.

Subparagraphs (C), (D), and (E) shall not apply in the case of any tax paid under section 4064. In the case of the tax imposed by section 4131, subparagraphs (B), (C), (D), and (E) shall not apply and subparagraph (A) shall apply only if the use of the exported vaccine meets such requirements as the Secretary may by regulations prescribe. This paragraph shall not apply in the case of any tax imposed under section 4041(a)(1) or 4081 on diesel fuel or kerosene and any tax paid under section 4121. Subparagraphs (C) and (D) shall not apply in the case of any tax imposed on gasoline under section 4081 if the requirements of subsection (a)(4) are not met. In the case of taxes imposed by subchapter C or D of chapter 32, subparagraph (E) shall not apply.

(3)If the tax imposed by chapter 32 has been paid with respect to the sale of any article (other than coal taxable under section 4121) by the manufacturer, producer, or importer thereof and such article is sold to a subsequent manufacturer or producer before being used, such tax shall be deemed to be an overpayment by such subsequent manufacturer or producer if—

(A)in the case of any article other than any fuel taxable under section 4081, such article is used by the subsequent manufacturer or producer as material in the manufacture or production of, or as a component part of—

(i)another article taxable under chapter 32, or

(ii)an automobile bus chassis or an automobile bus body,

manufactured or produced by him; or

(B)in the case of any fuel taxable under section 4081, such fuel is used by the subsequent manufacturer or producer, for nonfuel purposes, as a material in the manufacture or production of any other article manufactured or produced by him.

(4)If—

(A)the tax imposed by section 4071 has been paid with respect to the sale of any tire by the manufacturer, producer, or importer thereof, and

(B)such tire is sold by any person on or in connection with, or with the sale of, any other article, such tax shall be deemed to be an overpayment by such person if such other article is—

(i)an automobile bus chassis or an automobile bus body,

(ii)by such person exported, sold to a State or local government for the exclusive use of a State or local government, sold to a nonprofit educational organization for its exclusive use, or used or sold for use as supplies for vessels or aircraft, or

(iii)sold to a qualified blood collector organization for its exclusive use in connection with a vehicle the organization certifies will be primarily used in the collection, storage, or transportation of blood.

(5)If—

(A)tax was paid under section 4216(d)(1) in respect of any installment account,

(B)such account is, under the agreement under which the account was sold, returned to the person who sold such account, and

(C)the consideration is readjusted as provided in such agreement,

the part of the tax paid under section 4216(d)(1) allocable to the part of the consideration repaid or credited to the purchaser of such account shall be deemed to be an overpayment.

(6)If—

(A)the tax imposed by section 4051 has been paid with respect to the sale of any article, and

(B)before any other use, such article is by any person used as a component part of another article taxable under section 4051 manufactured or produced by him,

such tax shall be deemed to be an overpayment by such person. For purposes of the preceding sentence, an article shall be treated as having been used as a component part of another article if, had it not been broken or rendered useless in the manufacture or production of such other article, it would have been so used.

This subsection shall apply in respect of an article only if the exportation or use referred to in the applicable provision of this subsection occurs before any other use, or, in the case of a sale or resale, the use referred to in the applicable provision of this subsection is to occur before any other use.

United States Government work; public domain under 17 U.S.C. § 105.

Defined terms · 51

Show every defined term

additional payment determination date
means the earlier of—
alcohol
includes methanol and ethanol but does not include— Such term also includes an alcohol gallon equivalent of ethyl tertiary butyl ether or other ethers produced from such alcohol.
alcohol fuel mixture
means a mixture of alcohol and a taxable fuel which— For purposes of subparagraph (A), a mixture produced by any person at a refinery prior to a taxable event which includes ethyl tertiary butyl ether or other ethers produced from alcohol shall be treated as sold at the time of its removal from the refinery (and only at such time) to another person for use as a fuel.
alcohol or tobacco tax
means—
alternative fuel
means— Such term does not include ethanol, methanol, biodiesel, or any fuel (including lignin, wood residues, or spent pulping liquors) derived from the production of paper or pulp.
alternative fuel mixture
means a mixture of alternative fuel (other than a fuel described in subparagraph (A), (C), or (E) of subsection (d)(2)) and taxable fuel (as defined in subparagraph (A), (B), or (C) of section 4083(a)(1)) which—
applicable credit
means each of the following:
applicable entity
means—
applicable retirement savings vehicle
means an account or plan elected by the eligible individual under paragraph (2).
biodiesel mixture
means a mixture of biodiesel and diesel fuel (as defined in section 4083(a)(3)), determined without regard to any use of kerosene, which—
covered unemployment compensation debt
means—
dealer
includes a wholesaler, jobber, distributor, or retailer.
dependent
has the meaning given such term by section 152.
eligible child
means a qualifying child (as defined in section 152(c))—
eligible credit
means each of the following:
eligible indelibly dyed diesel fuel or kerosene
means diesel fuel or kerosene—
eligible individual
means any individual if such individual has attained the age of 18 as of the close of the taxable year.
eligible taxpayer
means any taxpayer which is not described in section 6417(d)(1)(A).
employer
includes a State or any political subdivision thereof, or any instrumentality of any one or more of the foregoing;
excessive credit transfer
means, with respect to a facility or property for which an election is made under subsection (a) for any taxable year, an amount equal to the excess of—
excessive payment
means, with respect to a facility or property for which an election is made under this section for any taxable year, an amount equal to the excess of—
farm
includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards.
Federal agency
means a department, agency, or instrumentality of the United States, and includes a Government corporation (as such term is defined in section 103 of title 5, United States Code).
gasoline
has the meaning given to such term by section 4083(a).
gasoline gallon equivalent
means, with respect to any nonliquid alternative fuel, the amount of such fuel having a Btu content of 124,800 (higher heating value).
incentive tax rate
means the aggregate rate of tax imposed by section 4081 determined with regard to section 4081(a)(2)(D).
income tax liability
means the excess of—
modified adjusted gross income
means adjusted gross income—
nontaxable use
means any use which is exempt from the tax imposed by section 4041(a)(1) other than by reason of a prior imposition of tax.
off-highway business use
means any use by a person in a trade or business of such person or in an activity of such person described in section 212 (relating to production of income) otherwise than as a fuel in a highway vehicle—
overpayment
includes that part of the amount of the payment of any internal revenue tax which is assessed or collected after the expiration of the period of limitation properly applicable thereto.
past-due, legally enforceable State income tax obligation
means a debt— For purposes of this paragraph, the term “State income tax” includes any local income tax administered by the chief tax administration agency of the State.
person
includes the government of any State or political subdivision thereof, any Indian tribal government (as defined in section 139E(c)(1)), any agency or instrumentality of any of the foregoing, and any agency or instrumentality of the Government of the United States that is described in section 501(c)(1) and exempt from taxation under section 501(a).
qualified local bus
means any local bus—
qualified retirement savings contributions
means, with respect to any taxable year, the sum of—
regular tax rate
means the aggregate rate of tax imposed by section 4081 determined without regard to section 4081(a)(2)(D).
specified early distribution
means any portion of a distribution—
specified individual
means any individual who is—
specified railroad retirement beneficiary
means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is entitled to a monthly annuity or pension payment payable (without regard to section 5(a)(ii) of the Railroad Retirement Act of 1974 (45 U.S.C. 231d(a)(ii))) under—
specified social security beneficiary
means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is entitled to any monthly insurance benefit payable under title II of the Social Security Act (42 U.S.C. 401 et seq.), including payments made pursuant to sections 202(d), 223(g), and 223(i)(7) of such Act.
specified supplemental security income recipient
means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is eligible for a monthly benefit payable under title XVI of the Social Security Act (42 U.S.C. 1381 et seq.), including—
specified veterans beneficiary
means any individual who, for the last month for which the Secretary has available information as of the date of enactment of this section, is entitled to a compensation or pension payment payable under—
State income tax
includes any local income tax administered by the chief tax administration agency of the State.
suspension period
means the period—
tax
includes a tax and an exaction denominated a “tax”, and any penalty, addition to tax, additional amount, or interest applicable to any such tax.
tax imposed by section 3101(a)
includes, in the case of services covered by an agreement made pursuant to section 218 of the Social Security Act, an amount equivalent to the tax which would be imposed by section 3101(a), if such services constituted employment as defined in section 3121;
tax imposed by section 3101(a),
includes, in the case of services covered by an agreement entered into pursuant to section 3121(l), an amount equivalent to the tax which would be imposed by section 3101(a), if such services constituted employment as defined in section 3121;
taxable fuel
has the meaning given such term by section 4083(a)(1).
United States
includes any possession of the United States.
valid identification number
means a social security number issued to an individual by the Social Security Administration on or before the due date for filing the return for the taxable year.
wages
includes for purposes of this subsection the amount, not to exceed an amount equal to the contribution and benefit base (as determined under section 230 of the Social Security Act) for any calendar year with respect to which such contribution and benefit base is effective, determined by each such head or agent as constituting wages paid to an employee.