Code of Federal Regulations · Section
§ 301.7507-2 — -2 Scope Of Section Generally
26 C.F.R. § 301.7507-2
(a) Purpose. Section 7507 is intended to assist depositors of a bank which had ceased to do business by reason of insolvency to recover their deposits, by prohibiting collection of taxes of the bank which would diminish the assets necessary for payment of its depositors and also assist depositors of banks which are in financial difficulties but which, in certain conditions, continue in business.
(b) Requisites of application. In order that section 7507 shall operate in a case where the bank continues business it is necessary that the depositors shall agree to accept, in lieu of all or a part of their deposit claims as such, claims against segregated assets, or a lien upon subsequent earnings of the bank, or both. When such an agreement exists, no tax diminishing such assets or earnings, or both, otherwise available and necessary for payment of depositors, may be collected therefrom. If, under such an agreement, the depositors have the right also to look to the unsegregated assets of the bank for recovery, in whole or in part, the unsegregated assets are likewise, until they exceed the amount of the depositors' claims chargeable thereto, unavailable for tax collection. Any tax of such a bank, or part of any tax, which is once uncollectible under section 7507, cannot thereafter be collected except from any residue of segregated assets remaining after claims of depositors against such assets have been paid.
(c) Interest. For the purposes of section 7507, depositors' claims include bona fide interest, either on the deposits as such, or on the claims accepted in lieu of deposits as such.
(d) Limitations on immunity. Section 7507 is not primarily intended for the relief of banks as such. It does not prevent tax collection, from assets not necessary, or not available, for payment of depositors, from a bank within section 7507(a), at any time within the statute of limitations. In other words, the immunity of such a bank is not complete, but ceases whenever, within the statutory period for collection, it becomes possible to make collection without diminishing assets necessary for payment of depositors. In the case of a bank within section 7507(b), any immunity to which the bank is entitled is absolute except as to segregated assets. Any tax coming within such immunity may never be collected. With respect to segregated assets, such a bank is subject to the same rule as a bank within section 7507(a), that is to say, after claims of depositors against segregated assets have been paid, any surplus is subject, within the statute of limitations, to collection of any tax, due at any time, the collection of which was suspended by the section. The section is not for the relief of creditors other than depositors, although it may incidentally operate for their benefit. See § 301.7507-4 and paragraph (b) of § 301.7507-9.
Authorizing Statute
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Confidentiality and disclosure of returns and return information26 U.S.C. § 6103
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Restrictions applicable to deficiencies; petition to Tax Court26 U.S.C. § 6213
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Signing of returns and other documents26 U.S.C. § 6061
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Assessment, collection, and payment26 U.S.C. § 6232
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Period of limitations on making adjustments26 U.S.C. § 6235
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Validity and priority against certain persons26 U.S.C. § 6323
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Definitions26 U.S.C. § 7701
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Partner’s return must be consistent with partnership return26 U.S.C. § 6222
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Alternative to payment of imputed underpayment by partnership26 U.S.C. § 6226
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Notice of qualification as executor or receiver26 U.S.C. § 6036
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Partners bound by actions of partnership26 U.S.C. § 6223
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Abatements26 U.S.C. § 6404
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Commissioner of Internal Revenue; other officials26 U.S.C. § 7803
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Extension of time for filing returns26 U.S.C. § 6081
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Treaty-based return positions26 U.S.C. § 6114
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Timely mailing treated as timely filing and paying26 U.S.C. § 7502
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Interest and penalties26 U.S.C. § 6233
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Certified professional employer organizations26 U.S.C. § 7705
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Accelerated cost recovery system26 U.S.C. § 168
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General requirement of return, statement, or list26 U.S.C. § 6011
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Disclosure of reportable transactions26 U.S.C. § 6111
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Rules and regulations26 U.S.C. § 7805
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Persons required to make returns of income26 U.S.C. § 6012
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Return of S corporation26 U.S.C. § 6037
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Reimbursement to State and local law enforcement agencies26 U.S.C. § 7624
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Determination at partnership level26 U.S.C. § 6221
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Partnership adjustment by Secretary26 U.S.C. § 6225
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Authority to release levy and return property26 U.S.C. § 6343
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Disclosure or use of information by preparers of returns26 U.S.C. § 7216
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Departmental regulations5 U.S.C. § 301
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Tax imposed26 U.S.C. § 1
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Notice of proceedings and adjustment26 U.S.C. § 6231
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Payment of tax by commercially acceptable means26 U.S.C. § 6311
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Sale of seized property26 U.S.C. § 6335
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Procedural requirements26 U.S.C. § 6751
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Low-income housing credit26 U.S.C. § 42
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Special rules26 U.S.C. § 1474
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Returns by exempt organizations26 U.S.C. § 6033
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Definitions and special rules26 U.S.C. § 6241
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Administrative appeal of liens26 U.S.C. § 6326
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Expenses of detection of underpayments and fraud, etc.26 U.S.C. § 7623
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Information concerning resident status26 U.S.C. § 6039E
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Identifying numbers26 U.S.C. § 6109
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Administrative adjustment request by partnership26 U.S.C. § 6227
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Authority to make credits or refunds26 U.S.C. § 6402
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Judicial review of partnership adjustment26 U.S.C. § 6234
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Failure to file notice of redetermination of foreign tax26 U.S.C. § 6689
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Income from discharge of indebtedness26 U.S.C. § 108