CORRELATION OF INTEREST WHERE OVERPAYMENT OF TAX IS CREDITED AGAINST UNDERPAYMENT OF TAX.

SEC. 83. CORRELATION OF INTEREST WHERE OVERPAYMENT OF TAX IS CREDITED AGAINST UNDERPAYMENT OF TAX. (a) Interest on Underpayment Satisfied by Credit.— (1) Underpayment under 1954 code.—Section 6601 (relating to interest on underpayments, etc.) is amended by redesignating subsections (g) and (h) as subsections (i) and (j), and by inserting after subsection (f) the following new subsection: “(g) Satisfaction by Credits.—If any portion of a tax is satisfied by credit of an overpayment, then no interest shall be imposed under this section on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to such overpayment.” (2) Underpayment under 1939 code.—Section 3794 of the Internal Revenue Code of 1939 (relating to interest on delinquent taxes) is amended by inserting “(a) General Rule.—” before 72 Stat. 1664 “Notwithstanding”, and by adding at the end of such section the following new subsection: “(b) Interest Not Imposed on Certain Underpayments.—If any portion of any tax due from the taxpayer under any provision of this title is satisfied by credit of an overpayment, then no interest shall be imposed on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to such overpayment.” (b) Interest on Overpayments Credited Against Underpayment.— Paragraph (1) of section 6611 (b) of the Internal Revenue Code of 1954 (relating to period for computation of interest on overpayments credited against other taxes), and paragraph (1) of section 3771 (b) of the Internal Revenue Code of 1939, are each amended to read as follows: “(1) Credits.—In the case of a credit, from the date of the overpayment to the due date of the amount against which the credit is taken.” (c) Technical Amendment.—Subsection (c) of section 6611 (relating to interest on overpayments) is hereby repealed. (d) Effective Date.—The amendments made by subsections (a), (b), and (c) shall apply only in respect of overpayments credited after December 31, 1957. (e) Interest Attributable to Net Operating Loss Carryback for Certain Taxable Years Ending in 1954.— If by reason of enactment of section 172 (b) (1) (A) of the Internal Revenue Code of 1954— (1) a deficiency resulted for the first taxable year preceding a taxable year ending after December 31, 1953, and before August 17, 1954, and (2) an overpayment resulted for the second preceding taxable year, no interest shall be payable with respect to any portion of such deficiency for any period during which there existed a corresponding amount of such overpayment with respect to which interest is not payable.