# Pub. L. 96-589: changes to the Internal Revenue Code 1980-12-24, 94 Stat. 3389. Source: . ## Legislative history - Bill: [H.R. 5043](https://www.congress.gov/bill/96th-congress/house-bill/5043) ## § 108: Income from discharge of indebtedness - § 108: Pub. L. 96–589 completely revised and expanded provisions by specifying the types of indebtedness and by setting out priorities among the exclusions, to reflect the revision of Title 11, Bankruptcy, in 1978. ## § 111: Recovery of tax benefit items - § 111(d): Pub. L. 96–589 added subsec. (d). ## § 118: Contributions to the capital of a corporation - § 118(c): Pub. L. 96–589 designated existing provisions as par. (1) and added par. (2). ## § 140: Cross references to other Acts - § 140(a): Pub. L. 96–589 redesignated pars. (2) to (9) as (1) to (8), respectively. Former par. (1), relating to section 1079 of title 11 for adjustments of indebtedness under wage earners’ plans, was struck out. ## § 302: Distributions in redemption of stock - § 302(a): Pub. L. 96–589, § 5(b)(2)(A), struck out reference to par. (4) of subsec. (b). - § 302(b)(4), § 302(b)(5): Pub. L. 96–589, § 5(b)(1), (2)(B), redesignated par. (5) as (4) and struck out reference to par. (4) in two places. Former par. (4) was struck out. ## § 312: Effect on earnings and profits - § 312(l): Pub. L. 96–589 added subsec. (l). ## § 351: Transfer to corporation controlled by transferor - § 351(a): Pub. L. 96–589, § 5(e)(2), struck out provision that stock or securities issued for services shall not be considered as issued in return for property for purposes of this section. - § 351(d): Pub. L. 96–589, § 5(e)(1), added subsec. (d). Former subsec. (d) redesignated (e)(1). - § 351(e): Pub. L. 96–589, § 5(e)(2), redesignated former subsec. (d) as par. (1) and added par. (2). Former subsec. (e) redesignated (f). - § 351(f): Pub. L. 96–589, § 5(e)(1), redesignated former subsec. (e) as (f). ## § 354: Exchanges of stock and securities in certain reorganizations - § 354(a)(2): Pub. L. 96–589, § 4(e)(1), redesignated existing pars. (A) and (B) as par. (A)(i), (ii), and added par. (B). - § 354(a)(3): Pub. L. 96–589, § 4(e)(1), designated existing provisions as subpar. (A), inserted provisions excluding property to which paragraph (2)(B) applies, and added subpar. (B). - § 354(b): Pub. L. 96–589, § 4(h)(1), substituted “subparagraph (D) or (G) of section 368(a)(1)” for “section 368(a)(1)(D)”, wherever appearing. - § 354(c): Pub. L. 96–589, § 6(i)(2), substituted “confirmed under section 1173 of title 11 of the United States Code, or approved by the Interstate Commerce Commission” for “approved by the Interstate Commerce Commission under section 77 of the Bankruptcy Act, or”. ## § 355: Distribution of stock and securities of a controlled corporation - § 355(a)(3): Pub. L. 96–589 designated existing provisions as subpars. (A) and (B) and added subpar. (C). - § 355(a)(4): Pub. L. 96–589, § 4(e)(2), designated existing provisions as subpar. (A), substituted “exchange if any property” for “distribution if any property”, inserted provisions excluding property to which paragraph (3)(C) applies, and added subpar. (B). ## § 357: Assumption of liability - § 357(c)(2): Pub. L. 96–589 added subpar. (C). ## § 368: Definitions relating to corporate reorganizations - § 368(a)(1)(G): Pub. L. 96–589, § 4(a), (h)(3), added subpar. (G). - § 368(a)(2)(C): Pub. L. 96–589, § 4(c), inserted provision that a similar rule would apply to a transaction otherwise qualifying under par. (1)(G), where the requirements of subpars. (A) and (B) of section 354(b)(1) are met with respect to the acquisition of the assets or stock. - § 368(a)(2)(D): Pub. L. 96–589, § 4(d), among other changes, inserted reference to par. (1)(G). - § 368(a)(3): Pub. L. 96–589, § 4(b), added par. (3). - § 368(b): Pub. L. 96–589, § 4(h)(4), substituted “paragraph (1)(A), (1)(B), (1)(C), or (1)(G) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) or (1)(G) of subsection (a) by reason of paragraph (2)(D)” for “paragraph (1)(A), (1)(B), or (1)(C) of subsection (a) by reason of paragraph (2)(C)” and “paragraph (1)(A) of subsection (a) by reason of paragraph (2)(D)”, respectively. ## § 381: Carryovers in certain corporate acquisitions - § 381(a): Pub. L. 96–589, § 4(g)(2), inserted provisions that a reorganization shall be treated as meeting the requirements of subparagraph (D) or (G) of section 368(a)(1) only if the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met. - § 381(a)(2): Pub. L. 96–589, § 4(g)(1), substituted “subparagraph (A), (C), (D), (F), or (G) of section 368(a)(1)” for “subparagraph (A), (C), (D) (but only if the requirements of subparagraphs (A) and (B) of section 354(b)(1) are met), or (F) of section 368(a)(1)”. ## § 382: Limitation on net operating loss carryforwards and certain built-in losses following ownership change - § 382(b): Pub. L. 96–589 added par. (7). ## § 443: Returns for a period of less than 12 months - § 443(e): Pub. L. 96–589 inserted cross reference to section 1398(d)(3)(E) for returns for a period of less than 12 months in the case of a debtor’s election to terminate a taxable year. ## § 542: Definition of personal holding company - § 542(c): Pub. L. 96–589, added par. (9). ## § 703: Partnership computations - § 703(b): Pub. L. 96–589 inserted reference to section 108(b)(5) and (d)(4). ## § 1017: Discharge of indebtedness - § 1017: Pub. L. 96–589 generally revised and expanded the section to specify the amount of reduction of basis of property under different subsections of section 108 of this title and the property to which such reduction is applicable, and provided for recapture of reductions for purposes of gains from depreciable property. ## § 1023: Cross references - § 1023: Pub. L. 96–589 redesignated par. (3) as (2). Former par. (2), which provided reference to sections 670, 796, and 922 of Title 11, Bankruptcy, for basis of property in case of certain reorganizations and arrangements under the Bankruptcy Act, was struck out. ## § 1398: Rules relating to individuals’ title 11 cases - Enacted 26 U.S.C. § 1398. ## § 1399: No separate taxable entities for partnerships, corporations, etc. - Enacted 26 U.S.C. § 1399. ## § 3302: Credits against tax - § 3302(a)(5): Pub. L. 96–589 added par. (5). ## § 6012: Persons required to make returns of income - § 6012(a): Pub. L. 96–589, § 3(b)(1), added par. (9). - § 6012(b)(3): Pub. L. 96–589, § 6(i)(5), substituted “trustee in a case under title 11 of the United States Code” for “trustee in bankruptcy”. - § 6012(b)(4): Pub. L. 96–589, § 3(b)(2), inserted reference to estate of an individual under chapter 7 or 11 of title 11 of the United States Code. ## § 6036: Notice of qualification as executor or receiver - § 6036: Pub. L. 96–589 substituted “trustee in a case under title 11 of the United States Code” for “trustee in bankruptcy”. ## § 6103: Confidentiality and disclosure of returns and return information - § 6103(e)(4): Pub. L. 96–589, § 3(c)(1), added par. (4). Former par. (4), relating to public inspection of returns of persons whose property was in the hands of a trustee in bankruptcy or receiver, was struck out. - § 6103(e)(5): Pub. L. 96–589, § 3(c)(1), added par. (5). Former par. (5) redesignated (6). - § 6103(e)(6): Pub. L. 96–589, § 3(c)(1), (2), redesignated former par. (5) as (6), and in par. (6) as so redesignated, inserted reference to par. (5). Former par. (6) redesignated (7). - § 6103(e)(7): Pub. L. 96–589, § 3(c)(1), redesignated former par. (6) as (7). ## § 6155: Payment on notice and demand - § 6155(b)(2): Pub. L. 96–589 struck out reference to a bankruptcy proceeding. ## § 6161: Extension of time for paying tax - § 6161(c): Pub. L. 96–589 substituted “Claims in cases under title 11 of the United States Code or in receivership proceedings” for “Claims in bankruptcy or receivership proceedings” in heading, and substituted reference to cases under title 11 of the United States Code, for reference to bankruptcy proceedings in text. ## § 6212: Notice of deficiency - § 6212(c)(2): Pub. L. 96–589 inserted cross reference to section 505(a) of title 11 for provisions allowing determination of tax in title 11 cases. ## § 6213: Restrictions applicable to deficiencies; petition to Tax Court - § 6213(f): Pub. L. 96–589 added subsec. (f). Former subsec. (f) redesignated (g). - § 6213(g), § 6213(h): Pub. L. 96–589 redesignated former subsecs. (f) and (g) as (g) and (h), respectively. ## § 6216: Cross references - § 6216(1): Pub. L. 96–589 struck out reference to bankruptcy proceedings. ## § 6327: Cross references - § 6327(2): Pub. L. 96–589, § 6(i)(10)(A), substituted “cases under title 11 of the United States Code, see section 523 of such title 11” for “bankruptcy, see section 17 of the Bankruptcy Act, as amended (11 U.S.C. 35)”. - § 6327(3): Pub. L. 96–589, § 6(i)(10)(A), redesignated par. (4) as (3) and substituted “cases under title 11 of the United States Code, see sections 545 and 724 of such title 11” for “proceedings under the Bankruptcy Act, see section 67(b) and (c) of that act, as amended (11 U.S.C. 107)”. Former par. (3), which provided cross reference to section 93 of title 11 for limit on amount allowed in bankruptcy proceedings on debts owing to the United States, was struck out. - § 6327(4): Pub. L. 96–589, § 6(i)(10)(A), redesignated par. (5) as (4) and substituted “plans for individuals with regular income in cases under title 11 of the United States Code, see section 1328 of such title 11” for “wage earners’ plans in bankruptcy courts, see section 680 of the Bankruptcy Act, as added by the act of June 22, 1938 (11 U.S.C. 1080)”. Former par. (4) redesignated (3). - § 6327(5), § 6327(6), § 6327: Pub. L. 96–589, § 6(i)(10)(A), (B), redesignated pars. (6) and (7) as (5) and (6), respectively. Former par. (5) redesignated (4). ## § 6404: Abatements - § 6404(d): Pub. L. 96–589 substituted “section 6213(g)(2)(A)” for “section 6213(f)(2)(A)”. ## § 6503: Suspension of running of period of limitation - § 6503(i): Pub. L. 96–589, § 6(a), added subsec. (i) and redesignated former subsec. (i), relating to cross references, as (j). See Codification note set out above. - § 6503(j): Pub. L. 96–589, § 6(a), (i)(11), redesignated former subsec. (i), relating to cross references, as (j), and in par. (2) of subsec. (j) as so redesignated, struck out reference to bankruptcy. See Codification note set out above. ## § 6512: Limitations in case of petition to Tax Court - § 6512(c): Pub. L. 96–589 added subsec. (c). ## § 6532: Periods of limitation on suits - § 6532(a)(5): Pub. L. 96–589 added par. (5). ## § 6658: Coordination with title 11 - Enacted 26 U.S.C. § 6658. ## § 6871: Claims for income, estate, gift, and certain excise taxes in receivership proceedings, etc. - § 6871(a): Pub. L. 96–589 amended subsec. (a) generally, substituting reference to appointment of a receiver for the taxpayer in any receivership proceedings, for reference to adjudication of bankruptcy of a taxpayer in a liquidating proceeding, the filing or the approval of a petition of or the approval of a petition against any taxpayer in any other bankruptcy proceeding, or the appointment of a receiver for any taxpayer in any receivership proceeding, and inserted reference to chapters 41, 42, 43, 44, and 45. - § 6871(b), § 6871(c): Pub. L. 96–589 added subsec. (b), redesignated former subsec. (b) as (c), inserted reference to chapters 41, 42, 43, 44, and 45, and struck out reference to bankruptcy proceedings. ## § 6872: Suspension of period on assessment - § 6872: Pub. L. 96–589 substituted “any case under title 11 of the United States Code” for “any proceeding under the Bankruptcy Act”. ## § 6873: Unpaid claims - § 6873(a): Pub. L. 96–589 struck out reference to proceedings under the Bankruptcy Act. ## § 7437: Cross references - § 7437(1): Pub. L. 96–589, § 6(d)(1), added par. (1). Former par. (1), which provided cross reference to former section 35 of title 11 for exclusion of tax liability from discharge in bankruptcy, was struck out. - § 7437(2): Pub. L. 96–589, § 6(d)(1), (i)(13), added par. (2). Former par. (2), which provided cross reference to former section 93 of title 11 for limit on amount allowed in bankruptcy proceedings on debts owing to the United States, was struck out. - § 7437(3): Pub. L. 96–589, § 6(d)(1), (i)(13), added par. (3). Former par. (3), which provided cross reference to former section 107 of title 11 for recognition of tax liens in proceedings under the Bankruptcy Act, was struck out. - § 7437(4): Pub. L. 96–589, § 6(d)(1), (i)(13), added par. (4). Former par. (4), which provided for cross reference to former section 1080 of title 11 for collection of taxes in connection with wage earners’ plans in bankruptcy courts, was struck out. ## § 7464: Intervention by trustee of debtor’s estate - Enacted 26 U.S.C. § 7464. ## § 7465: Provisions of special application to transferees ## § 7508: Time for performing certain acts postponed by reason of service in combat zone or contingency operation - § 7508(d): Pub. L. 96–589 substituted “cases under title 11 of the United States Code and receiverships” for “bankruptcy and receiverships” in par. (1) heading.