Code of Federal Regulations · Section
§ 301.7507-9 — -9 Termination Of Immunity
26 C.F.R. § 301.7507-9
(a) In general. (1) In the case of a bank within section 7507(a), immunity will end whenever, and to the extent that, taxes may be assessed and collected, within the applicable limitation periods as extended by section 7507, without diminishing the assets available and necessary for payment of depositors. Immunity of a bank within section 7507 (b) is terminated, as to segregated assets, whenever claims of depositors against such assets have been paid in full. See § 301.7507-3. As to segregated assets, the termination of immunity is complete, and any balance remaining after payment of depositors is available, within statutory limitations, for collection of tax due at any time. However, taxes of the bank will be collectible from segregated assets only to the extent that the bank has a legal or equitable interest therein. Assets as to which there has been a complete conveyance for benefit of depositors, and the bank has bonafide been divested of all legal and equitable interest, are not available for collection of the bank's tax liability.
(2) As to unsegregated assets of a bank within section 7507(b), immunity terminates only as to taxes thereafter becoming due. When taxes are once immune from collection, the immunity as to unsegregated assets is absolute. But see paragraph (a) of § 301.7507-4.
(b) General creditors. While the immunity from tax collection is for protection of depositors, and not for benefit of general creditors, in some cases the immunity will not end until the assets are sufficient to cover indebtedness of creditors generally. This situation will exist where under applicable law the claims of general creditors are on a parity with those of depositors, so that to pay depositors in full it is necessary to pay all creditors in full.
(c) Shareholder liability. In determining the sufficiency of the assets to satisfy the depositors' claims, shareholders' liability to the extent collectible shall be treated as available assets. See § 301.7507-7.
(d) Deposit insurance. Deposit insurance payable to depositors shall not be treated as an asset of the bank and shall be disregarded in determining the sufficiency of the assets to meet the claims of depositors. For taxable years ending on or after April 22, 1992, deposit insurance does not include Federal Financial Assistance (as defined in section 597) and other payments described in section 597(a) prior to its amendment by the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 and, therefore, such payments must be taken into account to determine whether a bank's assets are sufficient to meet claims of depositors.
(e) Notice by bank. A bank within section 7507(b), upon termination of immunity with respect to (1) earnings, (2) segregated or transferred assets, or (3) unsegregated assets, shall immediately notify the district director for the internal revenue district in which the taxpayer's returns were filed of such termination of immunity. See paragraph (b) of § 301.7507-8.
(f) Payment by bank. As immunity terminates with respect to any assets, it will be the duty of the bank, without notice from the district director, to make payment of taxes collectible from such assets.
Authorizing Statute
-
Confidentiality and disclosure of returns and return information26 U.S.C. § 6103
-
Restrictions applicable to deficiencies; petition to Tax Court26 U.S.C. § 6213
-
Signing of returns and other documents26 U.S.C. § 6061
-
Assessment, collection, and payment26 U.S.C. § 6232
-
Period of limitations on making adjustments26 U.S.C. § 6235
-
Validity and priority against certain persons26 U.S.C. § 6323
-
Definitions26 U.S.C. § 7701
-
Partner’s return must be consistent with partnership return26 U.S.C. § 6222
-
Alternative to payment of imputed underpayment by partnership26 U.S.C. § 6226
-
Notice of qualification as executor or receiver26 U.S.C. § 6036
-
Partners bound by actions of partnership26 U.S.C. § 6223
-
Abatements26 U.S.C. § 6404
-
Commissioner of Internal Revenue; other officials26 U.S.C. § 7803
-
Extension of time for filing returns26 U.S.C. § 6081
-
Treaty-based return positions26 U.S.C. § 6114
-
Timely mailing treated as timely filing and paying26 U.S.C. § 7502
-
Interest and penalties26 U.S.C. § 6233
-
Certified professional employer organizations26 U.S.C. § 7705
-
Accelerated cost recovery system26 U.S.C. § 168
-
General requirement of return, statement, or list26 U.S.C. § 6011
-
Disclosure of reportable transactions26 U.S.C. § 6111
-
Rules and regulations26 U.S.C. § 7805
-
Persons required to make returns of income26 U.S.C. § 6012
-
Return of S corporation26 U.S.C. § 6037
-
Reimbursement to State and local law enforcement agencies26 U.S.C. § 7624
-
Determination at partnership level26 U.S.C. § 6221
-
Partnership adjustment by Secretary26 U.S.C. § 6225
-
Authority to release levy and return property26 U.S.C. § 6343
-
Disclosure or use of information by preparers of returns26 U.S.C. § 7216
-
Departmental regulations5 U.S.C. § 301
-
Tax imposed26 U.S.C. § 1
-
Notice of proceedings and adjustment26 U.S.C. § 6231
-
Payment of tax by commercially acceptable means26 U.S.C. § 6311
-
Sale of seized property26 U.S.C. § 6335
-
Procedural requirements26 U.S.C. § 6751
-
Low-income housing credit26 U.S.C. § 42
-
Special rules26 U.S.C. § 1474
-
Returns by exempt organizations26 U.S.C. § 6033
-
Definitions and special rules26 U.S.C. § 6241
-
Administrative appeal of liens26 U.S.C. § 6326
-
Expenses of detection of underpayments and fraud, etc.26 U.S.C. § 7623
-
Information concerning resident status26 U.S.C. § 6039E
-
Identifying numbers26 U.S.C. § 6109
-
Administrative adjustment request by partnership26 U.S.C. § 6227
-
Authority to make credits or refunds26 U.S.C. § 6402
-
Judicial review of partnership adjustment26 U.S.C. § 6234
-
Failure to file notice of redetermination of foreign tax26 U.S.C. § 6689
-
Income from discharge of indebtedness26 U.S.C. § 108