U.S. Code » Title 26 » Subtitle Subtitle A— Income Taxes › Chapter CHAPTER 1— NORMAL TAXES AND SURTAXES › Subchapter Subchapter T— Cooperatives and Their Patrons › Part PART I— TAX TREATMENT OF COOPERATIVES

26 U.S.C. § 1383

Computation of tax where cooperative redeems nonqualified written notices of allocation or nonqualified per-unit retain certificates

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(a) General ruleIf, under section 1382(b)(2) or (4), or (c)(2)(B), a deduction is allowable to an organization for the taxable year for amounts paid in redemption of nonqualified written notices of allocation or nonqualified per-unit retain certificates, then the tax imposed by this chapter on such organization for the taxable year shall be the lesser of the following:(1) the tax for the taxable year computed with such deduction; or(2) an amount equal to—(A) the tax for the taxable year computed without such deduction, minus(B) the decrease in tax under this chapter for any prior taxable year (or years) which would result solely from treating such nonqualified written notices of allocation or nonqualified per-unit retain certificates as qualified written notices of allocation or qualified per-unit retain certificates (as the case may be).(b) Special rules(1) If the decrease in tax ascertained under subsection (a)(2)(B) exceeds the tax for the taxable year (computed without the deduction described in subsection (a)) such excess shall be considered to be a payment of tax on the last day prescribed by law for the payment of tax for the taxable year, and shall be refunded or credited in the same manner as if it were an overpayment for such taxable year.(2) For purposes of determining the decrease in tax under subsection (a)(2)(B), the stated dollar amount of any nonqualified written notice of allocation or nonqualified per-unit retain certificate which is to be treated under such subsection as a qualified written notice of allocation or qualified per-unit retain certificate (as the case may be) shall be the amount paid in redemption of such written notice of allocation or per-unit retain certificate which is allowable as a deduction under section 1382(b)(2) or (4), or (c)(2)(B) for the taxable year.(3) If the tax imposed by this chapter for the taxable year is the amount determined under subsection (a)(2), then the deduction described in subsection (a) shall not be taken into account for any purpose of this subtitle other than for purposes of this section.(Added Pub. L. 87–834, § 17(a), Oct. 16, 1962, 76 Stat. 1047; amended Pub. L. 89–809, title II, § 211(a)(5)–(7), Nov. 13, 1966, 80 Stat. 1581.)Editorial NotesAmendments

1966—Pub. L. 89–809, § 211(a)(5), inserted “or nonqualified per-unit retain certificates” in section catchline.

Subsec. (a). Pub. L. 89–809, § 211(a)(6), substituted “section 1382(b)(2) or (4)” for “1382(b)(2)” and inserted references to per-unit retain certificates.

Subsec. (b)(2). Pub. L. 89–809, § 211(a)(7), substituted “section 1382(b)(2) or (4)” for “section 1382(b)(2)” and inserted references to per-unit retain certificates.

Statutory Notes and Related SubsidiariesEffective Date of 1966 Amendment

Amendment by Pub. L. 89–809 applicable to per-unit retain allocations made during taxable years of an organization described in section 1381(a) of this title (relating to organizations to which part I of subchapter T of chapter 1 applies) beginning after Apr. 30, 1966, with respect to products delivered during such years, see section 211(e)(1) of Pub. L. 89–809, set out as a note under section 1382 of this title.

Effective Date

Section applicable, except as otherwise provided, to taxable years of organizations described in section 1381(a) of this title beginning after Dec. 31, 1962, see section 17(c) of Pub. L. 87–834, set out as a note under section 1381 of this title.

Notes of Decisions
Cited in 7 cases, 1936–1978 · leading case: Lambert v. United States, 101 F.2d 960 (5th Cir. 1939).
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Lambert v. United States, 101 F.2d 960 (5th Cir. 1939). · cites it 2× “The facts in this case, as established by the undisputed evidence and the verdict of the jury, are as follows: Appellant was a practicing physician who had registered and paid the special tax, as required by 26 U.S.C.A. §§ 1383 , 1384, when he began treating a man by the name of…”
Conway Cnty. Farmers Ass'n v. United States, 588 F.2d 592 (8th Cir. 1978). “§§ 1383 and 1385 ( 26 U.S.C. §§ 1383 and 1385). The authorized capital stock of CCFA consists of common stock, owned by the members, and two classes of preferred, noncumulative, nonvoting stock.”
United States v. Sam Chin, 24 F. Supp. 14 (D. Maryland 1938). · cites it 2× “And by section 174 it is provided: “Whenever on trial for a violation of this section defendant is shown to have-or to have had possession of the narcotic drug, such possession shall be deemed sufficient evidence to authorize conviction unless the defendant explains the…”
Perry v. Larson, 104 F.2d 728 (5th Cir. 1939). “Perry, holding a license as a naturopathist, is a “physician” within the meaning of the Florida Narcotic Act authorized to administer narcotic drugs, so as to be entitled to register, pay a tax, and dispense such drugs under the federal Narcotic Act, 26 U.S.C.A. § 1383 et seq.…”
Georgia Ass'n of Osteopathic Physicians & Surgeons, Inc. v. Allen, 31 F. Supp. 206 (M.D. Ga. 1940). “26 U.S.C.A. §§ 1383 , 1384. The right of an osteopath to register de *208 pends upon whether under the state law he is entitled to distribute, dispense, give away or administer narcotics.”
Perry v. Larson, 25 F. Supp. 728 (S.D. Fla. 1938). “Under section 1 of the Harrison Narcotic Act, 26 U.S.C.A. § 1383 (d), “physicians * * * and other practitioners, lawfully entitled to distribute, dispense, give away, or administer” narcotic drugs are entitled to register with the Collector and receive from him a special stamp…”
Conover v. Maloney, 16 F. Supp. 419 (D.N.J. 1936). “§ 211 (now 26 U.S.C.A. § 1383 (d). That learned court held that the Legislature of the state of Michigan “did not purport to draw any fine and narrow distinction between them (physicians and osteopaths) such as would prevent the use of any usual and recognized agency for the…”
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