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Internal Revenue Code · 26 U.S.C.

§ 4963. Definitions

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 4963

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Added
December 24, 1980 by Pub. L. 96–596
Last amended
August 17, 2006 by Pub. L. 109–280
Amendments
4 dated changes in the source credit
Length
5 subsections · 491 words · about 2 min to read
Defines
6 terms
Cross-references
cites 7; cited by 5 Code sections and 8 other regulations
Regulations
1 issued under this section
(a) First tier tax

For purposes of this subchapter, the term “first tier tax” means any tax imposed by subsection (a) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.

(b) Second tier tax

For purposes of this subchapter, the term “second tier tax” means any tax imposed by subsection (b) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4971, or 4975.

(c) Taxable event

For purposes of this subchapter, the term “taxable event” means any act (or failure to act) giving rise to liability for tax under section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.

(d) Correct For purposes of this subchapter—
(1) In general

Except as provided in paragraph (2), the term “correct” has the same meaning as when used in the section which imposes the second tier tax.

(2) Special rules The term “correct” means—
(A) in the case of the second tier tax imposed by section 4942(b), reducing the amount of the undistributed income to zero,
(B) in the case of the second tier tax imposed by section 4943(b), reducing the amount of the excess business holdings to zero, and
(C) in the case of the second tier tax imposed by section 4944, removing the investment from jeopardy.
(e) Correction period For purposes of this subchapter—
(1) In general The term “correction period” means, with respect to any taxable event, the period beginning on the date on which such event occurs and ending 90 days after the date of mailing under section 6212 of a notice of deficiency with respect to the second tier tax imposed on such taxable event, extended by—
(A) any period in which a deficiency cannot be assessed under section 6213(a) (determined without regard to the last sentence of section 4961(b)), and
(B) any other period which the Secretary determines is reasonable and necessary to bring about correction of the taxable event.
(2) Special rules for when taxable event occurs For purposes of paragraph (1), the taxable event shall be treated as occurring—
(A) in the case of section 4942, on the first day of the taxable year for which there was a failure to distribute income,
(B) in the case of section 4943, on the first day on which there are excess business holdings,
(C) in the case of section 4971, on the last day of the plan year in which there is an accumulated funding deficiency, and
(D) in any other case, the date on which such event occurred.

(Added Pub. L. 96–596, § 2(c)(1), Dec. 24, 1980, 94 Stat. 3473, § 4962; renumbered § 4963, Pub. L. 98–369, div. A, title III, § 305(a), July 18, 1984, 98 Stat. 783; amended Pub. L. 100–203, title X, § 10712(b)(3), Dec. 22, 1987, 101 Stat. 1330–467; Pub. L. 104–168, title XIII, § 1311(c)(2), July 30, 1996, 110 Stat. 1478; Pub. L. 109–280, title XII, § 1231(b)(1), Aug. 17, 2006, 120 Stat. 1098.)

Terms defined here

Where the text says “the term … means”. Select a term to jump to its definition.

Regulations under this section

Treasury regulations (26 CFR) issued under § 4963

Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 7 other sections

Cited by 5 Code sections

Cited in 8 regulations not issued under it

Amendment history

From the source credit and the official notes, newest first.

  1. Amended by Pub. L. 109–280Parts changed in 2006: (a)
  2. Amended by Pub. L. 104–168Parts changed in 1996: (a)
  3. Amended by Pub. L. 100–203Parts changed in 1987: (a)
  4. Amended by Pub. L. 98–369
  5. Added by Pub. L. 96–596

Where it sits in the Code

  1. Subtitle D Miscellaneous Excise Taxes
  2. Chapter 42 PRIVATE FOUNDATIONS; AND CERTAIN OTHER TAX-EXEMPT ORGANIZATIONS
  3. Subchapter E Abatement of First and Second Tier Taxes in Certain Cases

Nearby sections

Official notes

Show the Law Revision Counsel's notes (amendments, effective dates)

Editorial Notes

Amendments

2006—Subsecs. (a), (c). Pub. L. 109–280, which directed the insertion of “4966, 4967,” after “4958,” in subsecs. (a) and (c) of section 4963, without specifying the act to be amended, was executed by making the insertion in subsecs. (a) and (c) of this section, which is section 4963 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.

1996—Subsecs. (a) to (c). Pub. L. 104–168 inserted “4958,” after “4955,”.

1987—Subsecs. (a) to (c). Pub. L. 100–203 inserted reference to section 4955 of this title.

Statutory Notes and Related Subsidiaries

Effective Date of 2006 Amendment

Pub. L. 109–280, title XII, § 1231(c), Aug. 17, 2006, 120 Stat. 1098, provided that: “The amendments made by this section [enacting subchapter G of this chapter and amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [Aug. 17, 2006].”

Effective Date of 1996 Amendment

Amendment by Pub. L. 104–168 applicable to excess benefit transactions occurring on or after Sept. 14, 1995, and not applicable to any benefit arising from a transaction pursuant to any written contract which was binding on Sept. 13, 1995, and at all times thereafter before such transaction occurred, see section 1311(d)(1), (2) of Pub. L. 104–168, set out as a note under section 4955 of this title.

Effective Date of 1987 Amendment

Amendment by Pub. L. 100–203 applicable to taxable years beginning after Dec. 22, 1987, see section 10712(d) of Pub. L. 100–203, set out as an Effective Date note under section 4955 of this title.

Effective Date

For effective date of section with respect to any first tier tax and to any second tier tax, see section 2(d) of Pub. L. 96–596, set out as a note under section 4961 of this title.