JEOPARDY AND TERMINATION ASSESSMENTS.

SEC. 1204. JEOPARDY AND TERMINATION ASSESSMENTS. (a) Review of Jeopardy and Termination Assessments.— Subchapter B of chapter 76 (relating to proceedings by taxpayers and third parties) is amended by inserting after section 7488 the following new section: “SEC. 7429. REVIEW OF JEOPARDY ASSESSMENT PROCEDURES. “(a) Administrative Review.— “(1) Information to taxpayer.— Within 5 days after the day on which an assessment is made under section 6851(a), 6861(a), or 6862, the Secretary shall provide the taxpayer with a written statement of the information upon which the Secretary relies in making such assessment. “(2) Request for review.— Within 30 days after the day on which the taxpayer is furnished the written statement described in paragraph (1), or within 30 days after the last day of the period within which such statement is required to be furnished, the tax-payer may request the Secretary to review the action taken, “(3) Redetermination by secretary.— After a request for review is made under paragraph (2), the Secretary shall determine whether or not— “(A) the making of the assessment under section 6851, 6861, or 6862, as the ease may be, is reasonable under the circumstances, and “(B) the amount so assessed or demanded as a result of the action taken under section 6851, 6861. or 6862 is appropriate under the circumstances. “(b) Judicial Review.— “(1) Actions permitted.— Within 30 days after the earlier of— “(A) the day the Secretary notifies the taxpayer of his determination described in subsection (a)(8), or “(B) the 16th day after the request, described in subsection (a)(2) was made, the taxpayer may bring a civil action against the United States in a district court of the United States for a determination under this subsection. “(2) Determination by district court.— Within 20 days after an action is commenced under paragraph (1), the district court shall determine whether or not— “(A) the making of the assessment under section 6851, 6861, or 6862, as the case may be, is reasonable under the circumstances, and “(B) the amount so assessed or demanded as a result of the action taken under section 6851, 6861, or 6862, is appropriate under the circumstances. “(3) Order of district court.— If the court determines that the making of such assessment is unreasonable or that the amount assessed or demanded is inappropriate, the court may order the Secretary to abate such assessment, to redetermine (in whole or 90 STAT. 1696in part) the amount assessed or demanded, or to take such other action as the court finds appropriate. “(c) Extension of 20-Day Period Where Taxpayer So Requests.— If the taxpayer requests an extension of the 20day period set forth in subsection (b)(2) and establishes reasonable grounds why such extension should be granted, the district court may grant an extension of not more than 40 additional days. “(d) Computation of Days.— For purposes of this section, Saturday, Sunday, or a legal holiday in the District of Columbia shall not be counted as the, last day of any period. “(e) Venue.— A civil action under subsection (b) shall be commenced only hi the judicial district described in section 1402(a)(1) or (2) of title 28, United States Code. “(f) Finality of Determination.— Any determination made by a district court under this section shall be final and conclusive and shall not be reviewed by any other court. “(g) Burden of Proof.— “(1) Reasonableness of termination or jeopardy assessment.— In an action under subsection (b) involving the issue of whether the making of an assessment under section 6851, 6861, or 6862 is reasonable under the circumstances, the burden of proof in respect to such issue shall be upon the Secretary. “(2) Reasonableness of amount of assessment.— In an action under subsection (b) involving the issue of whether an amount assessed or demanded as a result of action taken under section 6851, 6861, or 6862 is appropriate under the circumstances, the Secretary shall provide a written statement which contains any information with respect to which his determination of the amount assessed was based, but the burden of proof in respect of such issue shall be upon the taxpayer.” (b) Jeopardy Assessment of Income Tax.— (1) Termination assessments.— So much of section 6851 (relating to termination of taxable year) us precedes subsection (e) is amended to read as follows: “SEC. 6851. TERMINATION ASSESSMENTS OF INCOME TAX. “(a) Authority for Making.— “(1) In general.— If the Secretary finds that a taxpayer designs quickly to depart from the United States or to remove Ids property therefrom, or to conceal hili’self or his property therein, or to do any other act (including in the case of a corporation distributing all or a part of its assets in liquidation or otherwise) tending to prejudice or to render wholly or partially ineffectual proceedings to collect the income tax for the current or the immediately preceding taxable year unless such proceeding be brought without delay, the Secretary shall immediately make a determination of tax for the current taxable year or for the preceding taxable year, or both, as the case may be, and notwithstanding any other provision of law, such tax shall become immediately due and payable. The Secretary shall immediately assess the amount of the tax so determined (together with all interest, additional amounts, and additions to the tax provided by law) for the current taxable year or such preceding taxable year, or both, as the case may be and shall cause notice of such determination and assessment to be given the taxpayer, together with a demand for immediate payment of such tax. 90 STAT. 1697 “(2) Computation of tax.— In the ease of a current taxable year, the Secretary shall determine the tax for the period beginning on the first day of such current taxable year and ending on the date of the determination under paragraph (1) as though such period were a taxable year of the taxpayer, and shall take into account any prior determination made under this subsection with respect to such current taxable year. “(3) Treatment of amounts collected.— Any amounts collected as a result of any assessments under this subsection shall, to the extent thereof, be treated as a payment of tax for such taxable year. “(4) This section inapplicable where section 6861 applies.— This section shall not authorize any assessment of tax for the preceding taxable year which is made after the due date of the taxpayer’s return for such taxable year (determined with regard to any extensions). “(b) Notice of Deficiency.— If an assessment of tax is made under the authority of subsection (a), the Secretary shall mail a notice under section 6212(a) for the taxpayer’s full taxable year (determined without regard to any action taken under subsection (a)) with respect to which such assessment was made within 60 days after the later of (i) the due date of the taxpayer’s return for such taxable year (determined with regard to any extensions), or (ii) the date such taxpayer files such return. Such deficiency may be in an amount greater or less than the amount assessed under subsection (a).” (2) Bonds.— Section 6851 is amended by striking out subsection (e) (relating to bonds) and inserting in lieu thereof the following: “(e) Sections 6861 (f) and (g) To Apply.— The provisions of section 6861(f) (relating to collection of unpaid amounts) and 6861(g) (relating to abatement if jeopardy does not exist) shall apply with respect to any assessment made under subsection (a). “(f) Cross References.— “(1) For provisions permitting immediate levy in case of jeopardy, see section 6331 (a). “(2) For provisions relating to the review of jeopardy, see section 7429.” (c) Technical and Conforming Amendments.— (1) Section 1346(e) of title 28, United States Code (relating to jurisdiction of district courts with the United States as defendant) is amended by inserting “or section 7429” immediately after “section 7426”. (2) Section 443(a)(3) (relating to returns for terminated period) is repealed. (3) Section 61191(b) (relating to place for filing returns) is amended— (A) by striking out “and” at the end of paragraph (1)(B)(iii) thereof, and by striking out paragraph (1)(B)(iv) and the matter following such paragraph and inserting in lieu thereof the following: “(iv) nonresident alien persons, and “(v) persons with respect to whom an assessment was made under section 6851(a) (relating to termination assessments) with respect to the taxable year, shall be made at such place as the Secretary may by regulations designate.”; and (B) by striking out “and” at the end of paragraph (2)(B)(ii), and by striking out paragraph (2)(B)(iii) and the 90 STAT. 1698matter following such paragraph and inserting in lieu thereof the following: “(iii) foreign corporations, and “(iv) corporations with respect to which an assessment was made under section 6851(a) (relating to termination assessments) with respect to the taxable year, shall be made at such place as the Secretary may by regulations designate.” (4) Section 6211(b)(1) (relating to rules for determining deficiencies) is amended by striking out “and” after “31,” and by inserting before the period at the end thereof the following: “, and without regard to any credits resulting from the collection of amounts assessed under section 6851 (relating to termination assessments)”. (5) Section 6212(c) (relating to restrictions on further deficiency letters) is amended by inserting after “errors),” the following: “in section 6851 (relating to termination assessments),”. (6) Section 6213(a) (relating to time for filing petition with the Tax Court) is amended by inserting “section 6851 or” before “section 6861”. (7) Section 6863(a) (relating to bond to stay collection) is amended— (A) by striking out “6861” and inserting in lieu thereof “6851, 6861,”; (B) by striking out “a jeopardy assessment” in the first sentence thereof and inserting in lieu thereof “an assessment”; and (C) by striking out “the jeopardy assessment” each place it appears therein and inserting in lieu thereof “such assessment”. (8) Section 6863(b)(3)(A) (relating to stay of sale of seized property) is amended to read as follows: “(A) General rule.— Where, notwithstanding the provisions of section 6213(a), an assessment has been made under section 6851 or 6861, the property seized for collection of the tax shall not be sold— “(i) before the expiration of the periods desert lied in subsection (c)(1)(A) and (B), “(ii) before the issuance of the notice of deficiency described in section 6851(b) or 6861(b), and the expiration of the period provided in section 6213(a) for filing a petition with the Tax Court, and “(iii) if a petition is filed with the Tax Court, (whether before or after the making of such assessment), before the expiration of the period during which the assessment of the deficiency would be prohibited if neither sections 6851(a) nor 6861(a) were applicable. Clauses (ii) and (iii) shall not apply in the case of a termination assessment under section 6851 if the taxpayer does not file a return for the taxable year by the due date (determined with regard to any extensions).” (9) Section 6863 (relating to stay of collection of jeopardy assessments) is amended by adding at the end thereof the following new subsection: “(c) Stat of Sale of Seized Property Pending District Court Determination Under Section 7429.— 90 STAT. 1699 “(1) General rule.— Where a jeopardy assessment has been made under section 6862(a) , the property seized for the collection of the tax shall not be sold— “(A) if a civil action is commenced in accordance with section 7429(b), on or before the day on which the district court judgment in such action becomes final, or “(B) if subparagraph (A) does not apply, before the day sifter the expiration of the period provided in section 7429(a) for requesting an administrative review, and if such review is requested, before the day after the expiration of the period provided in section 7429(b), for commencing an action in the district court. “(2) Exceptions.— With respect to any property described in paragraph (1). the exceptions provided by subsection (b)(3)(B) shall apply.” (10) Section 7103(a)(4) (relating to a cross reference) is repealed. (11) Section 7421(a) (relating to prohibition of suits to restrain assessment or collection of taxes) is amended by striking out “and 7426 (a) and (b)(1)” and inserting in lieu thereof “7426 (a) and (b)(1), and 7429(b)”. (12) The table of sections for part I of subchapter A of chapter 70 is amended to read as follows: “Sec. 6851. Termination assessments of income tax.” (13) The table of sections for subchapter B of chapter 76 is amended by inserting after the item relating to section 7428 the following: “Sec. 7429. Review of jeopardy assessment procedures,” (d) Effective Date.— The amendments made by this section apply with respect to action taken under section 6851, 6861, or 6862 of the Internal Revenue Code of 1954 where the notice and demand takes place after December 31, 1976.