PAYMENT OF ESTIMATED TAX BY CORPORATIONS.

SEC. 103. PAYMENT OF ESTIMATED TAX BY CORPORATIONS. (a) Repeal of Requirement of Declaration.— Section 6016 (relating to declarations of estimated income tax by corporations) and section 6074 (relating to time for filing declarations of estimated income tax by corporations) are repealed. (b) Installment Payments of Estimated Income Tax by Corporations.— Section 6154 (relating to installment payments of estimated income tax by corporations) is amended to read as follows: “SEC. 6154. INSTALLMENT PAYMENTS OF ESTIMATED INCOME TAX BY CORPORATIONS. “(a) Corporations Required To Pay Estimated Income Tax.— Every corporation subject to taxation under section 11 or 1201(a), or subchapter L of chapter 1 (relating to insurance companies), shall make payments of estimated tax (as defined in subsection (c)) during its taxable year as provided in subsection (b) if its estimated tax for such taxable year can reasonably be expected to be $40 or more. “(b) Payment in Installments.— Any corporation required under subsection (a) to make payments of estimated tax (as defined in subsection (c)) shall make such payments in installments as follows: “If the requirements of subsection (a) are first met— The following estimated tax the 15th day of percentage of the sha11 be paid on the— 4th month 6th month 9th month 12th month Before the 1st day of the 4th month of the taxable year 25 25 25 25 After the 2st day of the 3d month and before the 1st day of the 6th month of the taxable year _ _ _ _ _ 33⅓ 33⅓ 33⅓ After the 1st day of the 5th month and before the 1st day of the 9th month of the taxable year _ _ _ _ _ _ _ _ _ _ 50 50 After the 1st day of the 8th month and before the 1st day of the 12th month of the taxable year _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ 100 “(c) Estimated Tax Defined.— “(1) In general.— For purposes of this title, in the case of a corporation the term ‘estimated tax’ means the excess of— “(A) the amount which the corporation estimates as the amount of the income tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, over “(B) the sum of— “(i) the amount which the corporation estimates as the sum of the credits against tax provided by part IV of subchapter A of chapter 1, “(ii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1977, the amount of the corporation’s temporary estimated tax exemption for such year, and “(iii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1972, the amount of the corporation’s transitional exemption for such year. “(2) Temporary estimated tax exemption.— “(A) In general.— For purposes of clause (ii) of paragraph (1)(B), the amount of a corporation’s temporary estimated tax exemption for a taxable year equals the applicable percentage (determined under subparagraph (B)) multiplied by the lesser of— 82 Stat. 261 “(i) an amount equal to 22 percent of the amount which the corporation estimates as its surtax exemption (as defined in section 11(d)) for such year, or “(ii) the excess determined under paragraph (1) without regard to clauses (ii) and (iii) of paragraph (1)(B). “(B) Applicable percentage.— For purposes of subparagraph (A) and section 6655(e)(2), the applicable percentage is— “In the case of a taxable year beginning in— 1968, 1969, 1970, 1971, and 1972 100 percent 1973 80 percent 1974 60 percent 1975 40 percent 1976 20 percent “(3) Transitional exemption.— “(A) In general.— For purposes of clause (iii) of paragraph (1)(B), the amount of a corporation’s transitional exemption for a taxable year equals the exclusion percentage (determined under subparagraph (B)) multiplied by the lesser of— “(i) $100,000, reduced by the amount of the corporation’s temporary estimated tax exemption for such year, or “(ii) the excess determined under paragraph (1) without regard to clause (iii) of paragraph (1)(B). “(B) Exclusion percentage.— For purposes of subparagraph (A) and section 6655(e)(3), the exclusion percentage is— “In the case of a taxable year beginning in— 1968 80 percent 1969 60 percent 1970 40 percent 1971 20 percent “(d) Recomputation of Estimated Tax.— If, after paying any installment of estimated tax, the taxpayer makes a new estimate, the amount of each remaining installment (if any) shall be the amount which would have been payable if the new estimate had been made when the first estimate for the taxable year was made, increased or decreased (as the case may be) by the amount computed by dividing— “(1) the difference between— “(A) the amount of estimated tax required to be paid before the date on which the new estimate is made, and “(B) the amount of estimated tax which would have been required to be paid before such date if the new estimate had been made when the first estimate was made, by “(2) the number of installments remaining to be paid on or after the date on which the new estimate is made. “(e) Application to Short Taxable Year.— The application of this section to taxable years of less than 12 months shall lie in accordance with regulations prescribed by the Secretary or his delegate. “(f) Installments Paid in Advance.— At the election of the corporation, any installment of the estimated tax may be paid before the date prescribed for its payment. “(g) Certain Foreign Corporations.— For purposes of this section and section 6655, in the case of a foreign corporation subject to taxation under section 11 or 1201(a), or under subchapter L of chapter 1, the tax imposed by section 881 shall be treated as a tax imposed by section 11.” 82 Stat. 262 (c) Failure by Corporation To Pay Estimated Tax.— (1) Raising to percent requirement to 80 percent.— Subsections (b) and (d)(3) of section 6655 (relating to underpayments of estimated tax) are amended by striking out “70 percent” each place it appears therein and inserting in lieu thereof “80 percent”. (2) Definition of tax.— Subsection (e) of section 6655 (relating to definition of tax) is amended to read as follows: “(e) Definition of Tax.— “(1) In general.— For purposes of subsections (b) and (d), the term ‘tax’ means the excess of— “(A) the tax imposed by section 11 or 1201 (a), or subchapter L of chapter 1. whichever is applicable, over “(B) the sum of— “(i) the credits against tax provided by part IV of subchapter A of chapter 1, “(ii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1977, the amount of the corporation’s temporary estimated tax exemption for such year, and “(iii) in the case of a taxable year beginning after December 31, 1967, and before January 1, 1972, the amount of the corporation’s transitional exemption for such year. “(2) Temporary estimated tax exemption.— For purposes of clause (ii) of paragraph (1)(B), the amount of a corporation’s temporary estimated tax exemption for a taxable year equals the applicable percentage (determined under section 6154(c)(2)(B)) multiplied by the lesser of— “(A) an amount equal to 22 percent of the corporation’s surtax exemption (as defined in section 11(d)) for such year, or “(B) the excess determined under paragraph (1) without regard to clauses (ii) and (iii) of paragraph (1)(B). “(3) Transitional exemption.— For purposes of clause (iii) of paragraph (1)(B), the amount of a corporation’s transitional exemption for a taxable year equals the exclusion percentage (determined under section 6154(c)(3)(B)) multiplied by the lesser of— “(A) $100,000, reduced by the amount of the corporation’s temporary estimated tax exemption for such year, or “(B) the excess determined under paragraph (1) without regard to clause (iii) of paragraph (1)(B). “(4) Special rule for subsection (d)(1) and (2).— In applying this subsection for purposes of subsection (d)(1) and (2), the applicable percentage and the exclusion percentage shall be the percentage for the taxable year for which the underpayment is being determined.” (d) Adjustment of Overpayment.— (1) Allowance of adjustment.— Subchapter B of chapter 65 (relating to rules of special application) is amended by adding at the end thereof the following new section: “SEC. 6425. ADJUSTMENT OF OVERPAYMENT OF ESTIMATED INCOME TAX BY CORPORATION. “(a) Application for Adjustment.— “(1) Time for filing.—A corporation may, after the close of the taxable year and on or before the 15th day of the third month thereafter, and before the day on which it files a return for such taxable year, file an application for an adjustment of an overpay-82 Stat. 263ment by it of estimated income tax for such taxable year. An application under this subsection shall not constitute a claim for credit or refund. “(2) Form of application, etc.— An application under this subsection shall be verified in the manner prescribed by section 6065 in the case of a return of the taxpayer, and shall be filed in the manner and form required by regulations prescribed by the Secretary or his delegate. The application shall set forth— “(A) the estimated income tax paid by the corporation during the taxable year, “(B) the amount which, at the time of filing the application, the corporation estimates as its income tax liability for the taxable year, “(C) the amount of the adjustment, and “(D) such other information for purposes of carrying out the provisions of this section as may be required by such regulations. “(b) Allowance of Adjustment.— “(1) Limited examination of application.— Within a period of +5 days from the date on which an application for an adjustment is filed under subsection (a), the Secretary or his delegate shall make, to the extent he deems practicable in such period, a limited examination of the application to discover omissions and errors therein, and shall determine the amount of the adjustment upon the basis of the application and the examination; except that the Secretary or his delegate may disallow, without further action, any application which he finds contains material omissions or errors which he deems cannot be corrected within such 45 days. “(2) Adjustment credited or refunded.—The Secretary or his delegate, within the 45-day period referred to tn paragraph (1), may credit the amount of the adjustment against any liability in respect of an internal revenue tax on the part of the corporation and shall refund the remainder to the corporation. “(3) Limitation.—No application under this section shall be allowed unless the amount of the adjustment equals or exceeds (A) 10 percent of the amount estimated by the corporation on its application as its income tax liability for the taxable year, and (B) $500. “(4) Effect of adjustment.—For purposes of this title (other than section 6655), any adjustment under this section shall be treated as a reduction, in the estimated income tax paid, made on the day the credit is allowed or the refund is paid. “(c) Definitions.— For purposes of this section and section 6655(g) (relating to excessive adjustment)— “(1) The term ‘income tax liability’ means the excess of— “(A) the tax imposed by section 11 or 1201(a), or subchapter L of chapter 1, whichever is applicable, over “(B) the credits against tax provided by part IV of subchapter A of chapter 1. “(2) The amount of an adjustment under this section is equal to the excess of— “(A) the estimated income tax paid by the corporation during the taxable year, over “(B) the amount which, at the time of filing the application, the corporation estimates as its income tax liability for the taxable year. “(d) Consolidated Returns.— If the corporation seeking an adjustment under this section paid its estimated income tax on a consolidated basis or expects to make a consolidated return for the taxable82 Stat. 264 year, this section shall apply only to such extent and subject to such conditions, limitations, and exceptions as the Secretary or his delegate may by regulations prescribe.” (2) Amendment of section 6655.— Section 6655 is amended by adding at the end thereof the following new subsection: “(g) Excessive Adjustment Under Section 6425.— “(1) Addition to tax.— If the amount of an adjustment under section 6425 made before the 15th day of the third month following the close of the taxable year is excessive, there shall be added to the tax under chapter 1 for the taxable year an amount determined at the rate of 6 percent per annum upon the excessive amount from the date on which the credit is allowed or the refund is paid to such 15th day. “(2) Excessive amount.— For purposes of paragraph (1), the excessive amount is equal to the amount of the adjustment or (if smaller) the amount by which— “(A) the income tax liability (as defined in section 6425 (c)) for the taxable year as shown on the return for the taxable year exceeds “(B) the estimated income tax paid during the taxable year, reduced by the amount of the adjustment.” (e) Conforming Amendments.— (1) Section 6655(d)(1) is amended by striking out “reduced by $100,000”. (2) Section 243(b)(3)(C)(v) is amended to read as follows: “(v) surtax exemption, and one amount under sections 6154 (c)(2) and (3) and sections 6655(e)(2) and (3), for purposes of estimated tax payment requirements under section 6154 and the addition to the tax under section 6655 for failure to pay estimated tax.” (3) Section 6020(b)(1) is amended by striking out “section 6015 or 6016)” and inserting in lieu thereof “section 6015)”. (4) Section 6651(c) is amended by striking out “or section 6016”. (5) Section 7203 is amended by striking out “section 6015 or section 6016),” and inserting in lieu thereof “section 6015),”. (6) Section 7701(a)(34)(B) is amended by striking out “section 6016(b)” and inserting in lieu thereof “section 6154(c)”, (7) The table of sections for subpart B of part II of subchapter A of chapter 61 is amended by striking out the item relating to section 6016. (8) The table of sections for part V of subchapter A of chapter 61 is amended by striking out the item relating to section 6074. (9) The table of sections for subchapter B of chapter 65 is amended by adding at the end thereof the following: “Sec. 6425. Adjustment of overpayment of estimated income tax by corporation.” (f) Effective Date.— Except as provided by section 104, the amendments made by this section shall apply with respect to taxable years beginning after December 31, 1967.