26 U.S.C. § 982

Admissibility of documentation maintained in foreign countries

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(a) General rule

If the taxpayer fails to substantially comply with any formal document request arising out of the examination of the tax treatment of any item (hereinafter in this section referred to as the “examined item”) before the 90th day after the date of the mailing of such request on motion by the Secretary, any court having jurisdiction of a civil proceeding in which the tax treatment of the examined item is an issue shall prohibit the introduction by the taxpayer of any foreign-based documentation covered by such request.

(b) Reasonable cause exception(1) In general

Subsection (a) shall not apply with respect to any documentation if the taxpayer establishes that the failure to provide the documentation as requested by the Secretary is due to reasonable cause.

(2) Foreign nondisclosure law not reasonable cause

For purposes of paragraph (1), the fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the requested documentation is not reasonable cause.

(c) Formal document requestFor purposes of this section—(1) Formal document requestThe term “formal document request” means any request (made after the normal request procedures have failed to produce the requested documentation) for the production of foreign-based documentation which is mailed by registered or certified mail to the taxpayer at his last known address and which sets forth—(A) the time and place for the production of the documentation,(B) a statement of the reason the documentation previously produced (if any) is not sufficient,(C) a description of the documentation being sought, and(D) the consequences to the taxpayer of the failure to produce the documentation described in subparagraph (C).(2) Proceeding to quash(A) In general

Notwithstanding any other law or rule of law, any person to whom a formal document request is mailed shall have the right to begin a proceeding to quash such request not later than the 90th day after the day such request was mailed. In any such proceeding, the Secretary may seek to compel compliance with such request.

(B) Jurisdiction

The United States district court for the district in which the person (to whom the formal document request is mailed) resides or is found shall have jurisdiction to hear any proceeding brought under subparagraph (A). An order denying the petition shall be deemed a final order which may be appealed.

The running of the 90-day period referred to in subsection (a) shall be suspended during any period during which a proceeding brought under subparagraph (A) is pending.

(d) Definitions and special rulesFor purposes of this section—(1) Foreign-based documentation

The term “foreign-based documentation” means any documentation which is outside the United States and which may be relevant or material to the tax treatment of the examined item.

(2) Documentation

The term “documentation” includes books and records.

(3) Authority to extend 90-day period

The Secretary, and any court having jurisdiction over a proceeding under subsection (c)(2), may extend the 90-day period referred to in subsection (a).

(e) Suspension of statute of limitations

If any person takes any action as provided in subsection (c)(2), the running of any period of limitations under section 6501 (relating to the assessment and collection of tax) or under section 6531 (relating to criminal prosecutions) with respect to such person shall be suspended for the period during which the proceeding under such subsection, and appeals therein, are pending.

(Added Pub. L. 97–248, title III, § 337(a), Sept. 3, 1982, 96 Stat. 629; amended Pub. L. 98–369, div. A, title VII, § 714(k), July 18, 1984, 98 Stat. 963.)Editorial NotesAmendments

1984—Subsec. (d)(3), (4). Pub. L. 98–369 redesignated par. (4) as (3) and struck out former par. (3) which provided that an item was to be treated as foreign connected if directly or indirectly from a source outside the United States, or the item (in whole or in part) purported to arise outside the United States, or was otherwise dependent on transactions occurring outside the United States.

Statutory Notes and Related SubsidiariesEffective Date of 1984 Amendment

Amendment by Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title.

Effective Date

Pub. L. 97–248, title III, § 337(c), Sept. 3, 1982, 96 Stat. 630, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “The amendments made by this section [enacting this section] shall apply with respect to formal document requests (as defined in section 982(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by this section) mailed after the date of the enactment of this Act [Sept. 3, 1982].”

Notes of Decisions

Cited in 24 cases, 1927–2020 · leading case: NORTHWESTERN JOBBERS'CREDIT BUREAU v. Com'r of Int. Rev.

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NORTHWESTERN JOBBERS'CREDIT BUREAU v. Com'r of Int. Rev. (1930) ca8 · cites it 5× “The statute involved did not make an absence of organization for profit a condition of exemption, but based the exemption on the purpose of its organization and operation. On that ease it was also stipulated that no part of the net income was applied to the benefit of any…”

Chris-Marine USA, Inc. v. United States (1995) flmd · cites it 8× “General Legal Principles The IRS is authorized by 26 U.S.C. § 982 (c)(1) to issue a Formal Document Request (FDR) to any taxpayer to request foreign-based documentation.”

Jockey Club v. Helvering (1935) ca2 · cites it 2× “We do not think that the petitioner was a “scientific” corporation within section 231 *598 (6) of the Act of 1926, 26 USCA § 982 (6), and section 103 (6) of the Act of 1928, 26 USCA § 2103 (6), though in a loose sense it might be possible to find a scientific aspect to some of…”

Garden Homes Co. v. Commissioner of Internal Revenue (1933) ca7 · cites it 3× “The exempted groups which fall within those sections are farmers, fruij; growers, or like associations, which are organized and operated either as sales agents for the purpose of marketing the products of members and turning back to thém the proceeds of the sales, less the…”

In Re Chris-Marine U.S.A., Inc. (2001) flmb · cites it 2× “On September 17, 1993, the IRS issued a Formal Document Request (“FDR”) pursuant to 26 U.S.C. § 982 (c)(1) seeking production of certain documents allegedly relevant to its investigation of Debtor.”

Crooks v. Kansas City Hay Dealers' Ass'n (1929) ca8 · cites it 2× “Was this association exempt from income tax by virtue of subsection 7 of section 231 of the Revenue Act of 1924 (26 USCA § 982), which exempts from such taxation “business leagues, chambers of commerce, or boards of trade, not organized for profit and no part of the net earnings…”

Producers' Creamery Co. v. United States (1932) ca5 · cites it 3× “Its claim for refund on the ground that it was a co-operative farmers’ organization doing business in accordance with section 231 of the Revenue Acts of 1924 and 1926 (26 USCA § 982 and note), and therefore exempt from taxation, was allowed and paid on October 16, 1928.”

MacLaughlin v. Philadelphia Contributionship for Ins. (1934) ca3 · cites it 4× “The question in this ease is whether or not the Philadelphia Contributionship the plaintiff-appellee, is exempt from taxes on its income under section 231 (11) of the Revenue Act of 1926 (26 USCA § 982 (11), as a mutual fire insurance company, “the income of which is used or…”

Yujuico v. United States (1993) cand · cites it 7× “” 26 U.S.C. § 982 (e)(1). The consequence to a taxpayer who fails to substantially comply, within 90 days of the service of an FDR, is as follows: *287 any court having jurisdiction of a civil proceeding in which the tax treatment of the examined item is an issue shall prohibit…”

United States v. Toyota Motor Corp. (1983) cacd “As a third and final “alternative,” respondents propose that the IRS issue a “formal document request” pursuant to the recently-enacted provisions of section 337 of the Tax Equity and Fiscal Responsibility Act of 1982, 26 U.S.C. § 982 . However, the purpose of section 982 is to…”

Louisville Credit Men's Adjustment Bureau v. United States (1934) kywd “” 26 USCA § 982 (7). Revenue Act of 1928: “Sec.”

Anderson v. P. W. Madsen Inv. Co. (1934) ca10 “90 setting forth that there was included in its j-etum $97,340 received as dividends from a building and loan association, which should have been allowed as a deduction.”

Show all 24 citing cases →

— 26 U.S.C. § 982(11) — 1 case

Baltimore Equitable Soc. v. United States (1933) cc

— 26 U.S.C. § 982(6) — 2 cases

Crooks v. Kansas City Hay Dealers' Ass'n (1929) ca8 “Was this association exempt from income tax by virtue of subsection 7 of section 231 of the Revenue Act of 1924 (26 USCA § 982), which exempts from such taxation “business leagues, chambers of commerce, or boards of trade, not organized for profit and no part of the net earnings…”

NORTHWESTERN JOBBERS'CREDIT BUREAU v. Com'r of Int. Rev. (1930) ca8 “The statute involved did not make an absence of organization for profit a condition of exemption, but based the exemption on the purpose of its organization and operation. On that ease it was also stipulated that no part of the net income was applied to the benefit of any…”

— 26 U.S.C. § 982(7) — 1 case

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