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TITLE 26-INTERNAL REVENUE CODE credit or refund described in the preceding sentence, and no interest shall be assessed with respect to any deficiency described in the preceding sentence, for any period before the day which is one year after the date of the enactment of this Act [Jan. 12, 1971." SECTION REFERRED TO IN OTHER SECTIONS This section is referred to in sections 810, 1016, 1232 of this title. § 819. Foreign life insurance companies (a) Adjustment where surplus held in United States is less than specified minimum (1) In general In the case of any foreign corporation tax- able under this part, if the minimum figure determined under paragraph (2) exceeds the surplus held in the United States, then- (A) the amount of the policy and other contract liability requirements (determined under section 805 without regard to this subsection), and (B) the amount of the required interest (determined under section 809(a)(2) without regard to this subsection), shall each be reduced by an amount deter- mined by multiplying such excess by the cur- rent earnings rate (as defined in section 805(b)(2)). (2) Definitions For purposes of paragraph (1)- (A) The minimum figure is the amount determined by multiplying the taxpayer's total insurance liabilities on United States business by a percentage for the taxable year to be determined and proclaimed by the Secretary. The percentage determined and proclaimed by the Secretary under the preceding sentence shall be based on such data with respect to domestic life insurance companies for the preceding taxable year as the Secretary considers representative. Such percentage shall be computed on the basis of a ratio the numerator of which is the excess of the assets over the total insur- ance liabilities, and the denominator of which is the total insurance liabilities. (B) The surplus held in the United States is the excess of the assets held in the United States over the total insurance li- abilities on United States business. For purposes of this paragraph and subsec- tion (b) the term "total insurance liabilities" means the sum of the total reserves (as de- fined in section 801(c)) plus (to the extent not included in total reserves) the items referred to in paragraphs (3), (4), and (5) of section 810(c). (3) Reduction of section 881 tax In the case of any foreign corporation tax- able under this part, there shall be deter- mined- (A) the amount which would be subject to tax under section 881 if the amount taxable under such section were determined with- out regard to sections 103 and 894, and (B) the amount of the reduction provided by paragraph (1). The tax under section 881 (determined with- out regard to this paragraph) shall be re- duced (but not below zero) by an amount which is the same proportion of such tax as the amount referred to in subparagraph (B) is of the amount referred to in subparagraph (A); but such reduction in tax shall not exceed the increase in tax under this part by reason of the reduction provided by para- graph (1). (b) Distributions to shareholders (I) In general In applying sections 802(b)(3) and 815 with respect to a foreign corporation the amount of the distributions to shareholders shall be determined by multiplying the total amount of the distributions to shareholders (within the meaning of section 815) of the foreign corporation by whichever of the following percentages is selected by the taxpayer for the taxable year: (A) the percentage which the minimum figure for the taxable year (determined under subsection (a)(2)(A)) is of the excess of the assets of the company over the total insurance liabilities; or (B) the percentage which the total insur- ance liabilities on United States business for the taxable year is of the company's total insurance liabilities. (2) Distributions pursuant to certain mutualiza. tions In applying section 815(e) with respect to a foreign corporation- (A) the paid-in capital and paid-in surplus referred to in section 815(e)(1)(A) of a for- eign corporation is the portion of such cap- ital and surplus determined by multiplying such capital and surplus by the percentage selected for the taxable year under pard- graph (1); and (B) the excess referred to in se,.tion 815(e)(2)(A)(i) (without the adjustmert pro- vided by section 815(e)(2)(B)) is whichever of the following is the greater: (i) the minimum figure for 1948 deter- mined under subsection (a)(2)(A) comput- ed by using a percentage of 9 percent in lieu of the percentage deter nined and proclaimed by the Secretary, or (ii) the surplus described in subsection (a)(2)(B) (determined as of December 31, 1958). (c) Cross reference For taxation of foreign corporations carrying on lire insurance business within the United States, see section 842. (Added Pub. L. 86-69, § 2(a), June 25, 1959, 73 Stat. 136, and amended Pub. L. 89-809, title I, § 104(i)(3), Nov. 13, 1966, 80 Stat. 1561; Pub. L. 94-455, title XIX, §§ 1901(a)(102), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1781, 1834.) AMENDMENTS 1976-Subsec. (a)(2)(A). Pub. L. 94-455, §§ 1901(a)(102), 1906(b)(13)(A), among other changes,. struck out reference to in the case of a taxable year beginning before Jan. 1, 1959, 9 percent, reference to in the case of a taxable year beginning after Dec. 31, 1958 and "or his delegate" following "Secretary" and substituted reference to the preceding sentence for reference to clause (if), Subsec. (b)(2)(B)(i). Pub. L. 94-455, § 1901(a)(102)(C), added reference to computed by using a percentage of § 819 Page 516