U.S. Code » Title 26 » Subtitle Subtitle A— Income Taxes › Chapter CHAPTER 1— NORMAL TAXES AND SURTAXES › Subchapter Subchapter B— Computation of Taxable Income › Part PART IX— ITEMS NOT DEDUCTIBLE

26 U.S.C. § 271

Debts owed by political parties, etc.

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(a) General rule

In the case of a taxpayer (other than a bank as defined in section 581) no deduction shall be allowed under section 166 (relating to bad debts) or under section 165(g) (relating to worthlessness of securities) by reason of the worthlessness of any debt owed by a political party.

(b) Definitions(1) Political partyFor purposes of subsection (a), the term “political party” means—(A) a political party;(B) a national, State, or local committee of a political party; or(C) a committee, association, or organization which accepts contributions or makes expenditures for the purpose of influencing or attempting to influence the election of presidential or vice-presidential electors or of any individual whose name is presented for election to any Federal, State, or local elective public office, whether or not such individual is elected.(2) Contributions

For purposes of paragraph (1)(C), the term “contributions” includes a gift, subscription, loan, advance, or deposit, of money, or anything of value, and includes a contract, promise, or agreement to make a contribution, whether or not legally enforceable.

(3) Expenditures

For purposes of paragraph (1)(C), the term “expenditures” includes a payment, distribution, loan, advance, deposit, or gift, of money, or anything of value, and includes a contract, promise, or agreement to make an expenditure, whether or not legally enforceable.

(c) ExceptionIn the case of a taxpayer who uses an accrual method of accounting, subsection (a) shall not apply to a debt which accrued as a receivable on a bona fide sale of goods or services in the ordinary course of the taxpayer’s trade or business if—(1) for the taxable year in which such receivable accrued, more than 30 percent of all receivables which accrued in the ordinary course of the trades and businesses of the taxpayer were due from political parties, and(2) the taxpayer made substantial continuing efforts to collect on the debt.(Aug. 16, 1954, ch. 736, 68A Stat. 82; Pub. L. 94–455, title XXI, § 2104(a), Oct. 4, 1976, 90 Stat. 1901.)Editorial NotesAmendments

1976—Subsec. (c). Pub. L. 94–455 added subsec. (c).

Statutory Notes and Related SubsidiariesEffective Date of 1976 Amendment

Pub. L. 94–455, title XXI, § 2104(b), Oct. 4, 1976, 90 Stat. 1902, provided that: “The amendment made by subsection (a) [amending this section] shall apply to taxable years beginning after December 31, 1975.”

Notes of Decisions
Cited in 33 cases, 1935–2001 · leading case: Ventura Consol. Oil Fields v. Rogan, 86 F.2d 149 (9th Cir. 1936).
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Ventura Consol. Oil Fields v. Rogan, 86 F.2d 149 (9th Cir. 1936). · cites it 4× “§ 1047 , post now 26 U.S.C.A. § 271 and note]. The stipulation of deficiencies entered into before the Board of Tax Appeals necessarily was predicated upon the validity of the deficiency assessments in November, 1929.”
George Olshausen v. Comm'r, 273 F.2d 23 (9th Cir. 1960). “1939, 26 U.S.C.A. § 271 , which defines “deficiency” as follows : “ * * * ‘deficiency’ means the amount by which the tax imposed by this chapter exceeds the excess of— “(1) the sum of (A) the amount shown as the tax by the taxpayer upon his return, if a return was made by the…”
F.B. Blansett & Ethel Blansett v. United States, 283 F.2d 474 (8th Cir. 1960). “Deficiency, as it is used in the statute, Section 271, 1939 Code, 26 U.S.C. § 271 , relates to the assertion of a claim for an additional tax as a part of the mechanism by which the Board of Tax Appeals, now the Tax Court, acquires jurisdiction, and thus affords taxpayers an…”
Stand. Oil Co. (New Jersey) v. Denis J. McMahon Individually & as Dist. Dir. of Internal Revenue, 244 F.2d 11 (2d Cir. 1957). “The term is defined in Section 271, Internal Revenue Code of 1939, 26 U.S.C.A. § 271 . It does not include amounts due as interest.”
McConkey v. Comm'r, 199 F.2d 892 (4th Cir. 1952). “So far as this case is concerned, a "“deficiency” within the meaning of Section 271 (a), 26 U.S.C.A. § 271 (a), would be the excess of the correct tax due, as determined by the Commissioner, over the amount shown on the return plus any amounts previously assessed or collected…”
Joseph T. Miller & Crystal v. Miller v. Comm'r of Internal Revenue, 231 F.2d 8 (5th Cir. 1956). “1939, 26 U.S.C.A. § 271 . (2) The respondent filed tax liens for the unpaid income taxes assessed for 1946.”
Joseph N. Romm v. Comm'r, 245 F.2d 730 (4th Cir. 1957). “Taxpayer contends that the “deficiency” upon which the fraud penalty is levied by Section 293(b) is determined by the definition of “deficiency” contained in Section 271(a), 26 U.S.C.A. § 271 (a). In general terms, the definition of Section 271(a) is that a deficiency is the…”
United States v. Erie Forge Co., 191 F.2d 627 (3d Cir. 1951). “26 U.S.CA. § 271(a). 4 . “§ 272. Procedure in general “(a) (1) Petition to (Tax Court).”
Stand. Portland Cement Co. v. Comm'r, 80 F.2d 585 (3d Cir. 1935). · cites it 2× “True, payment of the amounts contained in the letters of deficiency was made without assessment, but section 271 (a) of the Revenue Act of 1928, 26 U.S.C.A. § 271 and note (section 273 (1) of the Act of 1926, 44 Stat.”
Kingston Prods. Corp. v. United States, 368 F.2d 281 (Ct. Cl. 1966). “Under section 271(a) of the 1939 Code, as amended, 26 U.S.C. § 271 (a) (1952 ed.), a “deficiency” is defined as the amount by which the tax imposed by chapter 1 (which covers both income and excess profits tax) exceeds the excess of the amount shown on the return as filed and…”
Moore v. Cleveland Ry. Co., 108 F.2d 656 (6th Cir. 1940). “§ 271 (a), as “the amount by which the tax imposed by this title [chapter] exceeds the amount shown as the tax by the taxpayer upon his return * * It would seem, therefore, that whenever the taxpayer has failed to make adequate return of income, there is a deficiency,…”
Frank C. & Mary Papa v. Comm'r, 464 F.2d 150 (2d Cir. 1972). “The court stated there: Taxpayer contends that the “deficiency” upon which the fraud penalty is levied by Section 293(b) is determined by the definition of “deficiency” contained in Section 271(a), 26 U.S. C.A. § 271(a). In general terms, the definition of Section 271(a) is that…”
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26 U.S.C. § 271(a): 2 cases
United States v. Erie Forge Co., 191 F.2d 627 (3d Cir. 1951). “26 U.S.CA. § 271(a). 4 . “§ 272. Procedure in general “(a) (1) Petition to (Tax Court).”
Frank C. & Mary Papa v. Comm'r, 464 F.2d 150 (2d Cir. 1972). “The court stated there: Taxpayer contends that the “deficiency” upon which the fraud penalty is levied by Section 293(b) is determined by the definition of “deficiency” contained in Section 271(a), 26 U.S. C.A. § 271(a). In general terms, the definition of Section 271(a) is that…”
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