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TITLE 26-INTERNAL REVENUE CODE §991. Taxation of a Domestic International Sales Corporation For purposes of the taxes imposed by this subtitle upon a DISC (as defined in section 992(a)), a DISC shall not be subject to the taxes imposed by this subtitle except for the tax imposed by chapter 5. (Added Pub. L. 92-178, title V, § 501, Dec. 10, 1971, 85 Stat. 535.) EIMCTIVE DATE Section 507 of Pub. L. 92-178 provided that: "Except as provided in section 505 of this title [amending sec- tion 971(a)(3) of this title and enacting provisions set out as a note under section 970 of this title), the amendments made by sections 501 through 504 of this title (enacting sections 991 to 994, 995 to 997, 6686, 246(d), 861(a)(2)(D), 901(d), 904(f)(5), 1014(d), 1504(b)(7), 6011(e), and 6501(g)(3) of this title and amending sections 904(f), (f)(1), (3), 922, 931(a), and 6072(b) of this title] shall apply with respect to tax- able years ending after December 31, 1971, except that a corporation may not be a DISC (as defined in section 992(a) of the Internal Revenue Code of 1954, added by section 501 of this title) for any taxable year begin- ning before January 1, 1972." SUBMISSION OF ANNUAL REPORTS TO CONaREss Section 506 of Pub. L. 92-178 provided that: "The Secretary of the Treasury shall, commencing for the calendar year 1972, submit an annual report to the Congress within 15 months following the close of each calendar year setting forth an analysis of the op- eration and effect of the provisions of this title [enact- ing sections 991 to 994, 995 to 997, 6686, and 246(d), 861(a)(2)(D), 904(f)(5), 971(a)(3). 1014(d), 1504(b)(7), and 6011(e) of this title; amending sections 901(d), 904(f). (f)(1), (3). 922, 931(a), and 6501(g)(3) of this title: and enacting provisions set out as notes under this section and section 970 of this title]." § 992. Requirements of a Domestic International Sales Corporation. (a) Definition of "DISC" and "former DISC" (1) DISC For purposes of this title, the term "DISC" means, with respect to any taxable year, a corporation which is incorporated under the laws of any State and satisfies the following conditions for the taxable year: (A) 95 percent or more of the gross re- ceipts (as defined in section 993(f)) of such corporation consist of qualified export re- ceipts (as defined in section 993(a)). (B) the adjusted basis of the qualified export assets (as defined in section 993(b)) of the corporation at the close of the tax- able year equals or exceeds 95 percent of the sum of the adjusted basis of all assets of the corporation at the close of the taxable year, (C) such corporation does not have more than one class of stock and the par or stated value of its outstanding stock is at least $2,500 on each day of the taxable year, and (D) the corporation has made an election pursuant to subsection (b) to be treated as a DISC and such election is in effect for the taxable year. (2) Status as DISC after having filed a return as a DISC The Secretary shall prescribe regulations setting forth the conditions under and the extent to which a corporation which has filed a return as a DISC for a taxable year shall be treated as a DISC for such taxable year for all purposes of this title, notwithstanding the fact that the corporation has failed to satisfy the conditions of paragraph (1). (3) "Former DISC" For purposes of this title, the term "former DISC" means, with respect to any taxable year, a corporation which is not a DISC for such year but was a DISC in a preceding tax- able year and at the beginning of the taxable year has undistributed previously taxed income or accumulated DISC income. (b) Election (1) Election (A) An election by a corporation to be treated as a DISC shall be made by such corporation for a taxable year at any time during the 90-day period immediately pre- ceding the beginning of the taxable year, except that the Secretary may give his con- sent to the making of an election at such other times as he may designate. (B) Such election shall be made in such manwir as the Secretary shall prescribe and shall be valid only if all persons who are shareholders in such corporation on the first day of the first taxable year for which such election is effective consent to such election. (2) Effect of election If a corporation makes an election under paragraph (1), then the provisions of this part shall apply to such corporation for the taxable year of the corporation for which made and for all succeeding taxable years and shall apply to each person who at any time is a shareholder of such corporation for all peri- ods on or after the first day of the first tax- able year of the corporation for which the election is effective. (3) Termination of election (A) Revocation An election under this subsection made by any corporation may be terminated by revo- cation of such election for any taxable year of the corporation after the first taxable year of the corporation for which the elec- tion is effective. A termination under this paragraph shall be effective with respect to such election- (i) for the taxable year in which made, if made at any time during the first 90 days of such taxable year, or (ii) for the taxable year following the taxable year in which made, if made after the close of such 90 days, and for all succeeding taxab, years of the corporation. Such termination shall be made in such manner as the Secretary shall prescribe by regulations. (B) Continued failure to be DISC If a corporation is not a DISC for each of any 5 consecutive taxable years of the cor- § 992 Page 619