# Pub. L. 92-178: changes to the Internal Revenue Code 1971-12-10, 85 Stat. 511. Source: . ## Legislative history - Bill: [H.R. 10947](https://www.congress.gov/bill/92nd-congress/house-bill/10947) ## § 15: Effect of changes - § 15(e): Pub. L. 92–178 added subsec. (e). ## § 37: Overpayments of tax ## § 46: Amount of credit - § 46: Pub. L. 92–178, § 106(b), inserted concluding sentence “In the case of an unused credit for an unused credit year ending before January 1, 1971, which is an investment credit carryover to a taxable year beginning after December 31, 1970 (determined without regard to this sentence), this paragraph shall be applied by substituting ‘10 taxable years’ for ‘7 taxable years’ in subparagraph (B) and by substituting ‘13 taxable years’ for ‘10 taxable years’ and ‘12 taxable years’ for ‘9 taxable years’ in the preceding sentence.” - § 46: Pub. L. 92–178, § 106(a), added par. (3). - § 46: Pub. L. 92–178, § 106(c)(1), substituted “Certain taxable years ending in 1969, 1970, or 1971” for “Taxable years beginning after December 31, 1968, and ending after April 18, 1969” in heading; substituted “ending after April 18, 1969, and before January 1, 1972,” for “ending after April 18, 1969,”; and provided that “In the case of a taxable year ending after August 15, 1971, and before January 1, 1972, the percentage contained in the preceding sentence shall be increased by 6 percentage points for each month (or portion thereof) in the taxable year after August 15, 1971”. - § 46: Pub. L. 92–178, § 106(c)(2), substituted “ending after April 18, 1969, and before January 1, 1971,” for “ending after April 18, 1969,” and “following the 7th taxable year after the unused credit year” for “following the last taxable year for which such portion may be added under paragraph (1)”, respectively. - § 46: Pub. L. 92–178, § 102(a)(1), (b), substituted “3 years”, “5 years”, and “7 years” for “4 years” (once), “6 years” (twice), and “8 years” (twice), respectively in tables of first sentence and substituted in second sentence “subpart” for “paragraph” and “useful life of any property shall be the useful life used in computing the allowance for depreciation under section 167 for the taxable year in which the property is placed in service” for “useful life of any property shall be determined as of the time such property is placed in service by the taxpayer”. - § 46: Pub. L. 92–178, § 105(a), substituted the fraction of “4⁄7” for “3⁄7”. - § 46: Pub. L. 92–178, § 105(b)(1), (2), struck out cl. (iii) provisions respecting telephone service, redesignated cl. (iv) as (iii), included in cl. (iii) provision of former cl. (iii) respecting telephone service, included other communication services (other than international telegraph service), and defined term “public utility property” to also mean communication property of type used by persons engaged in providing telephone or microwave communication services to which cl. (iii) applies, if such property is used predominantly for communication purposes, respectively. - § 46: Pub. L. 92–178, § 105(b)(3), added subpar. (C). - § 46: Pub. L. 92–178, § 107(a)(1), struck out provisions respecting reduction in basis or cost of certain replacement property. - § 46: Pub. L. 92–178, § 108(a), added par. (3). - § 46: Pub. L. 92–178, § 105(c), added subsec. (e). ## § 47: Rehabilitation credit - § 47(a): Pub. L. 92–178, § 107(a)(1), struck out par. (4) relating to property destroyed by casualty, etc. - § 47(a): Pub. L. 92–178, § 107(b)(1), provided for the repeal of par. (5) with the repeal not to apply, however, in the case of certain replacement property. See section 107(b)(2) of Pub. L. 92–178, set out in the Effective Date of 1971 Amendment note below. - § 47(a): Pub. L. 92–178, § 102(c), substituted “3½ years” for “4 years”. ## § 48: Energy credit - § 48(a)(1): Pub. L. 92–178, § 102(a)(2), substituted “3 years” for “4 years” in second sentence. - § 48(a)(1): Pub. L. 92–178, § 104(a)(1), substituted “research facility” for “research or storage facility” in cl. (ii) and added cl. (iii). - § 48(a)(2)(B): Pub. L. 92–178, § 104(c)(2), (3), (d), added cls. (viii) to (x), respectively. - § 48(a)(3)(C): Pub. L. 92–178, § 104(b), added subpar. (C). - § 48(a)(5): Pub. L. 92–178, § 104(c)(1), inserted “(other than the International Telecommunications Satellite Consortium or any successor organization)” after “international organization”. - § 48(a)(6): Pub. L. 92–178, § 104(e), substituted provisions for treatment of livestock (other than horses) acquired by the taxpayer as section 38 property, with exception provision for reduction of acquisition cost by amount equal to amount realized on sale or other disposition under certain circumstances, and for nontreatment of horses as section 38 property for former provision that livestock shall not be treated as section 38 property. - § 48(a)(7), § 48(a)(8), § 48(a)(9): Pub. L. 92–178, §§ 103, 104(f)(1), (g), added pars. (7) to (9), respectively. - § 48(d): Pub. L. 92–178, § 108(b) and (c), substituted “section 46(d)(1)” for “section 46(d)”; and designated as par. (1) the present first sentence, redesignated as subpars. (A) and (B) provisions formerly designated cls. (1) and (2), again substituted “section 46(d)(1)” for “section 46(d)” in par. (1) and inserted “(other than property described in paragraph (4))” in par. (1), added pars. (2) and (4), incorporated provisions of former second, third, and fourth sentences in provisions designated as par. (3), substituted in par. (3) “the lessee shall be treated for all purposes of this subpart as having acquired a fractional portion of such property equal to the fraction determined under paragraph (2)(B) with respect to such property” for “the lessee shall be treated for all purposes of this subpart as having acquired such property”, and struck out former fifth and sixth sentences respecting election regarding treatment of leases of suspension period property and section 38 property. See Effective Date of 1971 Amendment note below. ## § 103: Interest on State and local bonds - § 103(c): Pub. L. 92–178, § 315(a)(1), substituted “energy or gas,” for “energy, gas, or water or”. - § 103(c): Pub. L. 92–178, § 315(a)(2), substituted “, or” for a period. - § 103(c): Pub. L. 92–178, § 315(a)(3), added subpar. (G). - § 103(c): Pub. L. 92–178, § 315(b), substituted “$1,000,000” for “$250,000”. ## § 151: Allowance of deductions for personal exemptions - § 151: Pub. L. 92–178 increased exemption from $650 to $675 with respect to taxable years beginning after Dec. 31, 1970, and before Jan. 1, 1972, and from $675 to $750 with respect to taxable years beginning after Dec. 31, 1971. ## § 162: Trade or business expenses - § 162(c): Pub. L. 92–178, § 310(a)(2), substituted “Illegal bribes, kickbacks, and other payments” for “Bribes and illegal kickbacks” in heading. - § 162(c)(2): Pub. L. 92–178, § 310(a)(1), substituted provisions respecting “Other illegal payments” for former provisions on “Other bribes or kickbacks” reading “If in a criminal proceeding a taxpayer is convicted of making a payment (other than a payment described in paragraph (1) which is an illegal bribe or kickback, or his plea of guilty or nolo contendere to an indictment or information charging the making of such a payment is entered or accepted in such a proceeding, no deduction shall be allowed under subsection (a) on account of such payment or any related payment made prior to the date of the final judgment in such proceeding.” - § 162(c)(3): Pub. L. 92–178, § 310(a)(1), substituted provisions respecting kickbacks, rebates, and bribes under medicare and medicaid for former statute of limitations provisions. ## § 163: Interest - § 163(d)(1): Pub. L. 92–178, § 304(b)(2), inserted “the amount (if any) by which the deductions allowable under this section (determined without regard to this subsection) and sections 162, 164(a)(1) or (2), or 212 attributable to property of the taxpayer subject to a net lease exceeds the rental income produced by such property for the property year, plus” after “plus”. - § 163(d)(3)(C): Pub. L. 92–178, § 304(d), inserted reference to section 162. - § 163(d)(4)(A)(i): Pub. L. 92–178, § 304(a)(2)(A), inserted “of the lessor” after “deductions” and “(other than rents and reimbursed amounts with respect to such property)” after “section 162”. - § 163(d): Pub. L. 92–178, § 304(a)(2)(B), added par. (7). ## § 167: Depreciation - § 167: Pub. L. 92–178 added subsec. (m) and redesignated former subsec. (m) as (n). ## § 169: Amortization of pollution control facilities - § 169(h): Pub. L. 92–178 struck out provision that investment credit not be allowed. See section 48(a)(8) of this title. ## § 183: Activities not engaged in for profit - § 183(e): Pub. L. 92–178 added subsec. (e). ## § 226: Cross reference - § 226: Pub. L. 92–178 renumbered section 218 of this title as this section. ## § 246: Rules applying to deductions for dividends received - § 246(d), § 246: Pub. L. 92–178 added subsec. (d) and redesignated former subsec. (d) as (e). ## § 263: Capital expenditures - § 263(e): Pub. L. 92–178, § 109(c), substituted “shall, at the election of the taxpayer, be treated” for “shall be treated” and inserted provisions respecting making of election under this subsection for any taxable year at such time and in such manner as Secretary or his delegate prescribed by regulation and prohibiting making of election for any taxable year to which an election under subsec. (f) applies to railroad rolling stock (other than locomotives). - § 263(f): Pub. L. 92–178, § 109(b), added subsec. (f). ## § 301: Distributions of property - § 301(b)(1): Pub. L. 92–178, § 312(a)(1), substituted “corporation, unless subparagraph (D) applies” for “corporation” where first appearing. - § 301(b)(1): Pub. L. 92–178, § 312(a)(2), added subpar. (D). - § 301(d): Pub. L. 92–178, § 312(a)(3), substituted “corporation, unless paragraph (3) applies” for “corporation” where first appearing. - § 301(d): Pub. L. 92–178, § 312(a)(4), added par. (3) and redesignated former par. (3) as (4). ## § 381: Carryovers in certain corporate acquisitions - § 381(c)(24): Pub. L. 92–178 added par. (24). ## § 383: Special limitations on certain excess credits, etc. - Enacted 26 U.S.C. § 383. ## § 642: Special rules for credits and deductions - § 642(a): Pub. L. 92–178, § 701(b), added par. (3). - § 642(f): Pub. L. 92–178, § 303(c)(4), inserted reference to section 188. - § 642(i), § 642: Pub. L. 92–178, § 702(b), added subsec. (i) and redesignated former subsec. (i) as (j). ## § 665: Definitions applicable to subpart D - § 665: Pub. L. 92–178 struck out “for such taxable year” after “undistributed capital gain” in introductory text. ## § 703: Partnership computations - § 703(b): Pub. L. 92–178 substituted “,” for “or” after “(relating to pre-1970 exploration expenditures)” and inserted “under section 57(c) (relating to definition of net lease), or under section 163(d) (relating to limitation on interest on investment indebtedness)” after “(relating to deduction and recapture of certain mining exploration expenditures)”. ## § 861: Income from sources within the United States - § 861(a)(2)(D): Pub. L. 92–178, § 503, added subpar. (D). - § 861(e): Pub. L. 92–178, § 314(a), added subsec. (e). ## § 862: Income from sources without the United States - § 862: Pub. L. 92–178 added subsec. (c). ## § 871: Tax on nonresident alien individuals - § 871(a)(1)(A): Pub. L. 92–178, § 313(a), inserted “(other than original issue discount as defined in section 1232(b))” after “interest”. - § 871(a)(1)(C): Pub. L. 92–178, § 313(b), designated existing provisions as cl. (i), inserted “and before April 1, 1972,” after “September 28, 1965,”, substituted “section 1232(a)(2)(B)” for “section 1232”, and inserted “, in the case of corporate obligations issued after May 27, 1969, and before April 1, 1972, amounts which would be so considered but for the fact the obligations were issued after May 27, 1969,”, and added cls. (ii) and (iii). ## § 881: Tax on income of foreign corporations not connected with United States business - § 881(a)(1): Pub. L. 92–178, § 313(a), inserted “(other than original issue discount as defined in section 1232(b))” after “interest”. - § 881(a)(3): Pub. L. 92–178, § 313(c), designated existing provisions as subpar. (A), inserted “and before April 1, 1972,” after “September 28, 1965,”, substituted “section 1232(a)(2)(B)” for “section 1232”, and inserted “, in the case of corporate obligations issued after May 27, 1969, and before April 1, 1972, amounts which would be so considered but for the fact that the obligations were issued after May 27, 1969,”, and added subpars. (B) and (C). ## § 901: Taxes of foreign countries and of possessions of United States - § 901(d): Pub. L. 92–178 inserted provision for treatment of dividends from a DISC or former DISC as dividends from a foreign corporation to the extent such dividends are treated under part I as income from sources without the United States. ## § 904: Limitation on credit - § 904(f): Pub. L. 92–178, § 502(b)(2), inserted “and dividends from a DISC or former DISC” after “interest income” in the heading. - § 904(f)(1): Pub. L. 92–178, § 502(b)(2), inserted “each of the following items of income” in introductory text, added subpar. (B), and redesignated former subpar. (B) as (C), inserting therein provisions respecting dividends described in subparagraph (B). - § 904(f)(3): Pub. L. 92–178, § 502(b)(3), provided that the limitation provided by subsec. (a)(2) shall not apply to dividends described in paragraph (1)(B) and substituted “limitation provided by subsection (a)(2) applies with respect to income described in paragraph (1)(B) and (C)” for “limitation provided by subsection (a)(2) applies with respect to income other than the interest income described in paragraph (2)”. - § 904(f)(5): Pub. L. 92–178, § 502(b)(4), added par. (5). ## § 931: Income from sources within Guam, American Samoa, or the Northern Mariana Islands - § 931(a): Pub. L. 92–178 provided for non-application of section in the case of a corporation for a taxable year for which it is a DISC or in which it owns at any time stock in a DISC or former DISC. ## § 971: Definitions - § 971(a)(3): Pub. L. 92–178 added par. (3). ## § 991: Taxation of a domestic international sales corporation - Enacted 26 U.S.C. § 991. ## § 992: Requirements of a domestic international sales corporation - Enacted 26 U.S.C. § 992. ## § 993: Definitions and special rules - Enacted 26 U.S.C. § 993. ## § 994: Inter-company pricing rules - Enacted 26 U.S.C. § 994. ## § 995: Taxation of DISC income to shareholders - Enacted 26 U.S.C. § 995. ## § 996: Rules for allocation in the case of distributions and losses - Enacted 26 U.S.C. § 996. ## § 997: Special subchapter C rules - Enacted 26 U.S.C. § 997. ## § 1014: Basis of property acquired from a decedent - § 1014(d): Pub. L. 92–178 added subsec. (d). ## § 1245: Gain from dispositions of certain depreciable property - § 1245(a)(2): Pub. L. 92–178, § 303(c)(1), inserted reference to section 188 in two places in text following subpar. (D). - § 1245(a)(3)(B)(ii), § 1245(a)(3)(B)(iii): Pub. L. 92–178, § 104(a)(2), substituted “research facility” for “research or storage facility” in cl. (ii) and added cl. (iii). - § 1245(a)(3)(D): Pub. L. 92–178, § 303(c)(2), inserted reference to section 188. ## § 1250: Gain from dispositions of certain depreciable realty - § 1250(b)(3): Pub. L. 92–178 inserted reference to section 188. ## § 1441: Withholding of tax on nonresident aliens - § 1441(b): Pub. L. 92–178, § 313(a), inserted “(other than original issue discount as defined in section 1232(b))” after “interest”. - § 1441(c)(8): Pub. L. 92–178, § 313(d), added par. (8). ## § 1442: Withholding of tax on foreign corporations - § 1442(a): Pub. L. 92–178 provided that reference in section 1441(c)(8) to section 871(a)(1)(C) shall be treated as referring to section 881(a)(3). ## § 1504: Definitions - § 1504(b): Pub. L. 92–178 added par. (7). ## § 3402: Income tax collected at source - § 3402(a): Pub. L. 92–178, § 208(a), substituted new sets of tables 1 to 8 applicable (under § 208(i)(1)) with respect to wages paid after Jan. 15, 1972, for the tables applicable in the case of wages paid as provided in former: par. (1) after Dec. 31, 1969, and before July 1, 1970; par. (2) after June 30, 1970, and before Jan. 1, 1971; par. (3) after Dec. 31, 1970, and before Jan. 1, 1972; par. (4) after Dec. 31, 1971, and before Jan. 1, 1973; and par. (5) after Dec. 31, 1972. Pub. L. 92–178, § 208(h)(1), made provisions of par. (3) applicable (under section 208(i)(2)) with respect to wages paid after Dec. 31, 1971, and before Jan. 16, 1972. - § 3402(b)(1): Pub. L. 92–178, § 208(b)(1), revised withholding rates upwards, substituting 14.40; 28.80; 31.30; 62.50; 187.50; 375.00; 750.00; and 2.10 for 12.50; 25.00 27.10; 54.20; 162.50; 325.00; 650.00; and 1.80, respectively, to be effective with respect to wages paid after Jan. 15, 1972. Pub. L. 92–178, § 208(h)(2), in amending Pub. L. 91–172, § 805(b)(1), extended application of such former withholding rates to wages paid after June 30, 1970, and before Jan. 16, 1972, previously applicable to wages paid before Jan. 1, 1972. - § 3402(c)(6): Pub. L. 92–178, § 208(g), substituted “table 7 contained in subsection (a)” for “table 7 contained in paragraph (1), (2), (3), (4), or (5) (whichever is applicable) of subsection (a)”. - § 3402(f)(1): Pub. L. 92–178, § 208(c), added subpar. (G). - § 3402(f)(7): Pub. L. 92–178, § 208(d), added par. (7). - § 3402(m)(1): Pub. L. 92–178, § 208(e), substituted “an amount equal to the lesser of (i) $2,000 or (ii) 15 percent of his estimated wages” for “an amount equal to 15 percent of his estimated wages”. - § 3402(m)(2): Pub. L. 92–178, § 208(f)(1), inserted “or (if such a return has not been filed for such preceding taxable year at the time the withholding exemption certificate is furnished the employer) the second taxable year preceding the estimation year” after “for the taxable year preceding the estimation year”. - § 3402(m)(2): Pub. L. 92–178, § 208(f)(2), substituted as definition of “estimation year” the calendar year in which the wages are paid for prior provision defining term as meaning “(i) with respect to payments of wages after April 30 and on or before December 31 of any calendar year, such calendar year, and (ii) with respect to payments of wages on or after January 1 and before May 1 of any calendar year, the preceding calendar year (except that with respect to an exemption certificate furnished by an employee after he has filed his return for the preceding calendar year, such term means the current calendar year).” - § 3402(m)(3): Pub. L. 92–178, § 208(f)(3), struck out subpars. (B) and (C) providing that only one certificate be in effect and for termination of effectiveness of certificate and redesignated subpars. (D) and (E) as (B) and (C), respectively. ## § 4071: Imposition of tax - § 4071: Pub. L. 92–178 added subsec. (e). ## § 4216: Definition of price - § 4216(b)(2)(C), § 4216(b)(5): Pub. L. 92–178, § 401(g)(4)(A), substituted “(relating to trucks, buses, tractor, etc.)” for “(relating to automobiles, trucks, etc.)”. - § 4216: Pub. L. 92–178, § 401(g)(4)(B), inserted reference to “tractors,” after “buses,”. ## § 4221: Certain tax-free sales - § 4221(c): Pub. L. 92–178 inserted reference to section 4063(a)(6) or (7). ## § 4222: Registration - § 4222(d): Pub. L. 92–178 inserted reference to section 4063(a)(6) and (7). ## § 6011: General requirement of return, statement, or list - § 6011(e), § 6011(f): Pub. L. 92–178 added subsec. (e) and redesignated former subsec. (e) as (f). ## § 6012: Persons required to make returns of income - § 6012(a)(1): Pub. L. 92–178 substituted “$750” for “$600” in subpars. (A) and (B); “$2,050” for “1,700” in subpars. (A)(i) and (B); and “2,800” for “2,300” in subpars. (A)(ii) and (B), twice; and added subpar. (C), respectively. ## § 6013: Joint returns of income tax by husband and wife - § 6013(b)(3)(A): Pub. L. 92–178 increased the exemptions wherever appearing from $650 and $1,300 to $675 and $1,350, respectively, with respect to taxable years beginning after Dec. 1970, and before Jan. 1, 1972, and to $750 and $1,500, respectively, with respect to taxable years beginning after Dec. 31, 1971. ## § 6072: Time for filing income tax returns - § 6072(b): Pub. L. 92–178 required returns of a DISC to be filed on or before the fifteenth day of the ninth month following the close of the taxable year. ## § 6096: Designation by individuals - § 6096(a): Pub. L. 92–178 substituted “$1 shall be paid over to the Presidential Election Campaign Fund for the account of the candidates of any specified political party for President and Vice President of the United States, or if no specific account is designated by such individual, for a general account for all candidates for election to the offices of President and Vice President of the United States, in accordance with the provisions of section 9006(a)(1)” for “$1 shall be paid into the Presidential Election Campaign Fund established by section 303 of the Presidential Election Campaign Fund Act of 1966” and provided, in the case of a joint return of husband and wife having an income tax liability of $2 or more, that each spouse may designate that $1 shall be paid to any such account in the fund. ## § 6331: Levy and distraint - § 6331(d), § 6331(e): Pub. L. 92–178 added subsec. (d) and redesignated former subsec. (d) as (e). ## § 6411: Tentative carryback and refund adjustments - § 6411: Pub. L. 92–178, § 601(e)(1)(A), substituted “unused investment credit, or unused work incentive program credit” for “or unused investment credit” wherever appearing in subsecs. (a), (a)(1), (b), and (c). - § 6411(a): Pub. L. 92–178, § 601(e)(1)(B) and (C), inserted “by a work incentive program carryback provided in section 50A(b),” after “section 46(b),” in first sentence, and “or a work incentive program carryback” after “investment credit carryback” in second sentence, respectively. ## § 6412: Floor stocks refunds - § 6412(a)(1): Pub. L. 92–178 struck out par. (1) which related to general rule for floor stocks refunds on passenger automobiles, etc. ## § 6416: Certain taxes on sales and services - § 6416(b)(2): Pub. L. 92–178, § 401(a)(3)(C)(i), inserted reference to section 4063(a)(6). - § 6416(b)(2): Pub. L. 92–178, § 401(a)(3)(C)(ii), added subpar. (S). - § 6416: Pub. L. 92–178, § 401(g)(6), substituted “Trucks, buses, tractors, etc.” for “Automobiles, etc.” in heading. ## § 6501: Limitations on assessment and collection - § 6501(g)(3): Pub. L. 92–178, § 504(c), added par. (3). - § 6501(m): Pub. L. 92–178, § 601(e)(2), substituted “an investment credit carryback, or a work incentive program carryback” for “or an investment credit carryback” and inserted reference to subsec. (o) in two places, respectively. - § 6501(o): Pub. L. 92–178, § 601(d)(1), added subsec. (o). ## § 6511: Limitations on credit or refund - § 6511(d)(7): Pub. L. 92–178 added par. (7). ## § 6601: Interest on underpayment, nonpayment, or extensions of time for payment, of tax - § 6601(e): Pub. L. 92–178 added par. (4). ## § 6611: Interest on overpayments - § 6611(f)(4): Pub. L. 92–178 added par. (4). ## § 6686: Failure to file returns or supply information by DISC or former FSC - Enacted 26 U.S.C. § 6686. ## § 7216: Disclosure or use of information by preparers of returns - Enacted 26 U.S.C. § 7216. ## § 7422: Civil actions for refund - § 7422(f)(1): Pub. L. 92–178 authorized maintenance of suit or proceeding against the United States notwithstanding provisions of section 1502 of Title 28 (relating to certain treaty cases). ## § 9001: Short title - Enacted 26 U.S.C. § 9001. ## § 9002: Definitions - Enacted 26 U.S.C. § 9002. ## § 9003: Condition for eligibility for payments - Enacted 26 U.S.C. § 9003. ## § 9004: Entitlement of eligible candidates to payments - Enacted 26 U.S.C. § 9004. ## § 9005: Certification by Commission - Enacted 26 U.S.C. § 9005. ## § 9006: Payments to eligible candidates - Enacted 26 U.S.C. § 9006. ## § 9007: Examinations and audits; repayments - Enacted 26 U.S.C. § 9007. ## § 9008: Payments for presidential nominating conventions - Enacted 26 U.S.C. § 9008. ## § 9009: Reports to Congress; regulations - Enacted 26 U.S.C. § 9009. ## § 9010: Participation by Commission in judicial proceedings - Enacted 26 U.S.C. § 9010. ## § 9011: Judicial review - Enacted 26 U.S.C. § 9011. ## § 9012: Criminal penalties - Enacted 26 U.S.C. § 9012.