DISALLOWANCE OF INTEREST ON CERTAIN OVERPAYMENTS OF TAX.

SEC. 13271. DISALLOWANCE OF INTEREST ON CERTAIN OVERPAYMENTS OF TAX. (a) General Rule.— Subsection (e) of section 6611 is amended to read as follows: “(e) Disallowance of Interest on Certain Overpayments.— “(1) Refunds within 45 days after return is filed.— If any overpayment of tax imposed by this title is refunded within 45 days after the last day prescribed for filing the return of such tax (determined without regard to any extension of time for filing the return) or, in the case of a return filed after such last date, is refunded within 45 days after the date the return is filed, no interest shall be allowed under subsection (a) on such overpayment. “(2) Refunds after claim for credit or refund.— If— “(A) the taxpayer files a claim for a credit or refund for any overpayment of tax imposed by this title, and “(B) such overpayment is refunded within 45 days after such claim is filed, 107 STAT. 542no interest shall be allowed on such overpayment from the date the claim is filed until the day the refund is made. “(3) IRS initiated adjustments.— If an adjustment initiated by the Secretary, results in a refund or credit of an overpayment, interest on such overpayment shall be computed by subtracting 45 days from the number of days interest would otherwise be allowed with respect to such overpayment.” (b) Effective Dates.— (1) Paragraph (1) of section 6611(e) of the Internal Revenue Code of 1986 (as amended by subsection (a)) shall apply in the case of returns the due date for which (determined without regard to extensions) is on or after January 1, 1994. (2) Paragraph (2) of section 6611(e) of such Code (as so amended) shall apply in the case of claims for credit or refund of any overpayment filed on or after January 1, 1995, regardless of the taxable period to which such refund relates. (3) Paragraph (3) of section 6611(e) of such Code (as so amended) shall apply in the case of any refund paid on or after January 1, 1995, regardless of the taxable period to which such refund relates.