# 26 U.S.C. § 4963: Definitions

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s4963>. Cite pinpoints as 26 U.S.C. § 4963(a)(1).

## § 4963(a) First tier tax

For purposes of this subchapter, the term “first tier tax” means any tax imposed by subsection (a) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.

## § 4963(b) Second tier tax

For purposes of this subchapter, the term “second tier tax” means any tax imposed by subsection (b) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4971, or 4975.

## § 4963(c) Taxable event

For purposes of this subchapter, the term “taxable event” means any act (or failure to act) giving rise to liability for tax under section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.

## § 4963(d) Correct

For purposes of this subchapter—

**§ 4963(d)(1) In general.** Except as provided in paragraph (2), the term “correct” has the same meaning as when used in the section which imposes the second tier tax.

**§ 4963(d)(2) Special rules.** The term “correct” means—

**§ 4963(d)(2)(A)** in the case of the second tier tax imposed by section 4942(b), reducing the amount of the undistributed income to zero,

**§ 4963(d)(2)(B)** in the case of the second tier tax imposed by section 4943(b), reducing the amount of the excess business holdings to zero, and

**§ 4963(d)(2)(C)** in the case of the second tier tax imposed by section 4944, removing the investment from jeopardy.

## § 4963(e) Correction period

For purposes of this subchapter—

**§ 4963(e)(1) In general.** The term “correction period” means, with respect to any taxable event, the period beginning on the date on which such event occurs and ending 90 days after the date of mailing under section 6212 of a notice of deficiency with respect to the second tier tax imposed on such taxable event, extended by—

**§ 4963(e)(1)(A)** any period in which a deficiency cannot be assessed under section 6213(a) (determined without regard to the last sentence of section 4961(b)), and

**§ 4963(e)(1)(B)** any other period which the Secretary determines is reasonable and necessary to bring about correction of the taxable event.

**§ 4963(e)(2) Special rules for when taxable event occurs.** For purposes of paragraph (1), the taxable event shall be treated as occurring—

**§ 4963(e)(2)(A)** in the case of section 4942, on the first day of the taxable year for which there was a failure to distribute income,

**§ 4963(e)(2)(B)** in the case of section 4943, on the first day on which there are excess business holdings,

**§ 4963(e)(2)(C)** in the case of section 4971, on the last day of the plan year in which there is an accumulated funding deficiency, and

**§ 4963(e)(2)(D)** in any other case, the date on which such event occurred.

## Regulations

- [Treas. Reg. § 53.4963-1](/26/reg/53.4963-1.md): Definitions. (interprets § 4963)

## Final rules

- [84 FR 14008](https://www.federalregister.gov/documents/2019/04/09/2019-07010/regulations-to-prescribe-return-and-time-for-filing-for-payment-of-section-4960-4966-4967-and-4968) (2019): Regulations To Prescribe Return and Time for Filing for Payment of Section 4960, 4966, 4967, and 4968 Taxes and To Update the Abatement Rules for Section 4966 and 4967 Taxes
- [60 FR 62209](https://www.federalregister.gov/documents/1995/12/05/95-29094/political-expenditures-by-section-501c3-organizations) (1995): Political Expenditures by Section 501(c)(3) Organizations

## Leading cases

- [Parks v. Commissioner, 145 T.C. 278 (2015)](https://www.courtlistener.com/opinion/4562898/parks-v-commr/)

## Proposed regulations (not in force)

- [Prop. Treas. Reg. § 53.4963-1](/26/prop/53.4963-1_98-20419.md): [Amended] (REG-246256-96, proposed 1998-08-04)

## Connections

Cites: § 4941 Taxes on self-dealing; § 4942 Taxes on failure to distribute income; § 4943 Taxes on excess business holdings; § 4944 Taxes on investments which jeopardize charitable purpose; § 4961 Abatement of second tier taxes where there is correction; § 4971 Taxes on failure to meet minimum funding standards; § 6213 Restrictions applicable to deficiencies; petition to Tax Court

Cited by: § 4942 Taxes on failure to distribute income; § 6213 Restrictions applicable to deficiencies; petition to Tax Court; § 6214 Determinations by Tax Court; § 6503 Suspension of running of period of limitation; § 7422 Civil actions for refund

## Amendments

- 1980-12-24: [Pub. L. 96-596](/26/act/96-596.md), 94 Stat. 3473
- 1984-07-18: [Pub. L. 98-369](/26/act/98-369.md), 98 Stat. 783
- 1987-12-22: [Pub. L. 100-203](/26/act/100-203.md), 101 Stat. 1330
- 1996-07-30: [Pub. L. 104-168](/26/act/104-168.md), 110 Stat. 1478
- 2006-08-17: [Pub. L. 109-280](/26/act/109-280.md), 120 Stat. 1098