PARTIAL PAYMENTS; SALES OF INSTALLMENT ACCOUNTS.

SEC. 207. PARTIAL PAYMENTS; SALES OF INSTALLMENT ACCOUNTS. (a) Partial Payments.— Section 4216(c) (relating to definition of price; partial payments) is amended by striking out “that portion of the total tax which is proportionate to the portion of the total amount to be paid represented by such payment.” in the material following paragraph (4) and inserting in lieu thereof “a percentage of such payment equal to the rate of tax in effect on the date such payment is due.” (b) Sales of Installment Accounts.— Section 4216(e) (relating to definition of price; sales of installment accounts) is amended— (1) by striking out “total tax;” in paragraph (1) and inserting in lieu thereof “total tax which would be payable if such installment accounts had not been sold or otherwise disposed of (computed as provided in subsection (c));”; and (2) by amending paragraph (2) to read as follows: “(2) if any such sale is pursuant to the order of, or subject to the approval of, a court of competent jurisdiction in a bankruptcy or insolvency proceeding, the amount computed under paragraph (1) shall not exceed the sum of the amounts computed by multiplying (A) the proportionate share of the amount for which such accounts are sold which is allocable to each unpaid installment payment by (B) the rate of tax under this chapter in effect on the date such unpaid installment payment is or was due.” (c) Conforming Amendment.— Section 6416(b)(5) (relating to return of certain installment accounts) is amended by striking out “proportionate” and inserting in lieu thereof “allocable”.