Procedures similar to deficiency dividend procedures made applicable
(1) In general If— (A) there is a determination that the provisions of this part do not apply to an investment company for any taxable year (hereinafter in this subsection referred to as the “non-RIC year”), and (B) such investment company meets the distribution requirements of paragraph (2) with respect to the non-RIC year, for purposes of applying subsection (a)(2) to subsequent taxable years, the provisions of this part shall be treated as applying to such investment company for the non-RIC year. If the determination under subparagraph (A) is solely as a result of the failure to meet the requirements of subsection (a)(2), the preceding sentence shall also apply for purposes of applying subsection (a)(2) to the non-RIC year and the amount referred to in paragraph (2)(A)(i) shall be the portion of the accumulated earnings and profits which resulted in such failure.
(2) Distribution requirements (A) In general The distribution requirements of this paragraph are met with respect to any non-RIC year if, within the 90-day period beginning on the date of the determination (or within such longer period as the Secretary may permit), the investment company makes 1 or more qualified designated distributions and the amount of such distributions is not less than the excess of— (i) the portion of the accumulated earnings and profits of the investment company (as of the date of the determination) which are attributable to the non-RIC year, over (ii) any interest payable under paragraph (3). (B) Qualified designated distribution For purposes of this paragraph, the term “qualified designated distribution” means any distribution made by the investment company if— (i) section 301 applies to such distribution, and (ii) such distribution is designated (at such time and in such manner as the Secretary shall by regulations prescribe) as being taken into account under this paragraph with respect to the non-RIC year. (C) Effect on dividends paid deduction Any qualified designated distribution shall not be included in the amount of dividends paid for purposes of computing the dividends paid deduction for any taxable year.
(3) Interest charge (A) In general If paragraph (1) applies to any non-RIC year of an investment company, such investment company shall pay interest at the underpayment rate established under section 6621— (i) on an amount equal to 50 percent of the amount referred to in paragraph (2)(A)(i), (ii) for the period— (I) which begins on the last day prescribed for payment of the tax imposed for the non-RIC year (determined without regard to extensions), and (II) which ends on the date the determination is made. (B) Coordination with subtitle F Any interest payable under subparagraph (A) may be assessed and collected at any time during the period during which any tax imposed for the taxable year in which the determination is made may be assessed and collected.
(4) Provision not to apply in the case of fraud The provisions of this subsection shall not apply if the determination contains a finding that the failure to meet any requirement of this part was due to fraud with intent to evade tax.
(5) Determination For purposes of this subsection, the term “determination” has the meaning given to such term by section 860(e). Such term also includes a determination by the investment company filed with the Secretary that the provisions of this part do not apply to the investment company for a taxable year.
(1)In general#
If—
(A) there is a determination that the provisions of this part do not apply to an investment company for any taxable year (hereinafter in this subsection referred to as the “non-RIC year”), and
(B) such investment company meets the distribution requirements of paragraph (2) with respect to the non-RIC year,
for purposes of applying subsection (a)(2) to subsequent taxable years, the provisions of this part shall be treated as applying to such investment company for the non-RIC year. If the determination under subparagraph (A) is solely as a result of the failure to meet the requirements of subsection (a)(2), the preceding sentence shall also apply for purposes of applying subsection (a)(2) to the non-RIC year and the amount referred to in paragraph (2)(A)(i) shall be the portion of the accumulated earnings and profits which resulted in such failure.
(1)(A)#
there is a determination that the provisions of this part do not apply to an investment company for any taxable year (hereinafter in this subsection referred to as the “non-RIC year”), and
(1)(B)#
such investment company meets the distribution requirements of paragraph (2) with respect to the non-RIC year,
(2)Distribution requirements#
(A) In general The distribution requirements of this paragraph are met with respect to any non-RIC year if, within the 90-day period beginning on the date of the determination (or within such longer period as the Secretary may permit), the investment company makes 1 or more qualified designated distributions and the amount of such distributions is not less than the excess of— (i) the portion of the accumulated earnings and profits of the investment company (as of the date of the determination) which are attributable to the non-RIC year, over (ii) any interest payable under paragraph (3).
(B) Qualified designated distribution For purposes of this paragraph, the term “qualified designated distribution” means any distribution made by the investment company if— (i) section 301 applies to such distribution, and (ii) such distribution is designated (at such time and in such manner as the Secretary shall by regulations prescribe) as being taken into account under this paragraph with respect to the non-RIC year.
(C) Effect on dividends paid deduction Any qualified designated distribution shall not be included in the amount of dividends paid for purposes of computing the dividends paid deduction for any taxable year.
(2)(A)In general#
The distribution requirements of this paragraph are met with respect to any non-RIC year if, within the 90-day period beginning on the date of the determination (or within such longer period as the Secretary may permit), the investment company makes 1 or more qualified designated distributions and the amount of such distributions is not less than the excess of—
(i) the portion of the accumulated earnings and profits of the investment company (as of the date of the determination) which are attributable to the non-RIC year, over
(ii) any interest payable under paragraph (3).
(3)Interest charge#
(A) In general If paragraph (1) applies to any non-RIC year of an investment company, such investment company shall pay interest at the underpayment rate established under section 6621— (i) on an amount equal to 50 percent of the amount referred to in paragraph (2)(A)(i), (ii) for the period— (I) which begins on the last day prescribed for payment of the tax imposed for the non-RIC year (determined without regard to extensions), and (II) which ends on the date the determination is made.
(B) Coordination with subtitle F Any interest payable under subparagraph (A) may be assessed and collected at any time during the period during which any tax imposed for the taxable year in which the determination is made may be assessed and collected.
(3)(A)In general#
If paragraph (1) applies to any non-RIC year of an investment company, such investment company shall pay interest at the underpayment rate established under section 6621—
(i) on an amount equal to 50 percent of the amount referred to in paragraph (2)(A)(i),
(ii) for the period— (I) which begins on the last day prescribed for payment of the tax imposed for the non-RIC year (determined without regard to extensions), and (II) which ends on the date the determination is made.
(3)(A)(i)#
on an amount equal to 50 percent of the amount referred to in paragraph (2)(A)(i),
(4)Provision not to apply in the case of fraud#
The provisions of this subsection shall not apply if the determination contains a finding that the failure to meet any requirement of this part was due to fraud with intent to evade tax.
(5)Determination#
For purposes of this subsection, the term “determination” has the meaning given to such term by section 860(e). Such term also includes a determination by the investment company filed with the Secretary that the provisions of this part do not apply to the investment company for a taxable year.