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Internal Revenue Code, § 1314. Amount And Method Of Adjustment

I.R.C. § 1314(a) Ascertainment Of Amount Of Adjustment
In computing the amount of an adjustment under this part there shall first be ascertained the tax previously determined for the taxable year with respect to which the error was made. The amount of the tax previously determined shall be the excess of—
I.R.C. § 1314(a)(1)
the sum of—
I.R.C. § 1314(a)(1)(A)
the amount shown as the tax by the taxpayer on his return (determined as provided in section 6211(b)(1), (3), and (4), relating to the definition of deficiency), if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus
I.R.C. § 1314(a)(1)(B)
the amounts previously assessed (or collected without assessment) as a deficiency, over—
I.R.C. § 1314(a)(2)
the amount of rebates, as defined in section 6211(b)(2), made.
There shall then be ascertained the increase or decrease in tax previously determined which results solely from the correct treatment of the item which was the subject of the error (with due regard given to the effect of the item in the computation of gross income, taxable income, and other matters under this subtitle). A similar computation shall be made for any other taxable year affected, or treated as affected, by a net operating loss deduction (as defined in section 172) or by a capital loss carryback or carryover (as defined in section 1212), determined with reference to the taxable year with respect to which the error was made. The amount so ascertained (together with any amounts wrongfully collected as additions to the tax or interest, as a result of such error) for each taxable year shall be the amount of the adjustment for that taxable year.
I.R.C. § 1314(b) Method Of Adjustment
The adjustment authorized in section 1311(a) shall be made by assessing and collecting, or refunding or crediting, the amount thereof in the same manner as if it were a deficiency determined by the Secretary with respect to the taxpayer as to whom the error was made or an overpayment claimed by such taxpayer, as the case may be, for the taxable year or years with respect to which an amount is ascertained under subsection (a), and as if on the date of the determination one year remained before the expiration of the periods of limitation upon assessment or filing claim for refund for such taxable year or years. If, as a result of a determination described in section 1313(a)(4), an adjustment has been made by the assessment and collection of a deficiency or the refund or credit of an overpayment, and subsequently such determination is altered or revoked, the amount of the adjustment ascertained under subsection (a) of this section shall be redetermined on the basis of such alteration or revocation and any overpayment or deficiency resulting from such redetermination shall be refunded or credited, or assessed and collected, as the case may be, as an adjustment under this part. In the case of an adjustment resulting from an increase or decrease in a net operating loss or net capital loss which is carried back to the year of adjustment, interest shall not be collected or paid for any period prior to the close of the taxable year in which the net operating loss or net capital loss arises.
I.R.C. § 1314(c) Adjustment Unaffected By Other Items
The amount to be assessed and collected in the same manner as a deficiency, or to be refunded or credited in the same manner as an overpayment, under this part, shall not be diminished by any credit or set-off based upon any item other than the one which was the subject of the adjustment. The amount of the adjustment under this part, if paid, shall not be recovered by a claim or suit for refund or suit for erroneous refund based upon any item other than the one which was the subject of the adjustment.
I.R.C. § 1314(d) Taxes Imposed By Subtitle C
This part shall not apply to any tax imposed by subtitle C (sec. 3101 and following relating to employment taxes).
(Aug. 16, 1954, ch. 736, 68A Stat. 340; Sept. 2, 1958, Pub. L. 85-866, title I, 59(b), 72 Stat. 1647; June 21, 1965, Pub. L. 89-44, title VIII, 809(d)(5)(B), 79 Stat. 168; Dec. 30, 1969, Pub. L. 91-172, title V, 512(f)(7), (8), 83 Stat. 641, 642; Oct. 4, 1976, Pub. L. 94-455, title XIX, 1906(b)(13)(A), 90 Stat. 1834; Pub. L. 113-295, Div. A, title II, Sec. 221(a)(87), Dec. 19, 2014.)
BACKGROUND NOTES
AMENDMENTS
2014--Pub. L. 113-295, Div. A, Sec. 221(a)(87), struck subsec. (d) and redesignated subsec. (e) as subsec. (d). Before being struck, subsec. (d) read as follows:
“(d) Periods For Which Adjustments May Be Made.—No adjustment shall be made under this part in respect of any taxable year beginning prior to January 1, 1932.”
1976--Subsec. (b). Pub. L. 94-455 struck out “or his delegate” after “Secretary”.
1969--Subsec. (a). Pub. L. 91-172, 512(f)(7), substituted “capital loss carryback or carryover” for “capital loss carryover”.
Subsec. (b). Pub. L. 91-172, 512(f)(8), inserted reference to net capital loss.
1965--Subsec. (a)(1)(A). Pub. L. 89-44 struck out “(b)(1) and (3)” and inserted in lieu thereof “(b)(1), (3), and (4)”.
1958--Subsec. (c). Pub. L. 85-866 substituted in second sentence “The” for “Other than in the case of an adjustment resulting from a determination under section 1313(a)(4), the”.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendments by Pub. L. 113-295, Div. A, Sec. 221(a)(87), effective on the date of the enactment of this Act [Enacted: Dec. 19, 2014].
Section 221(b)(2) of Pub. L. 113-295, Div. A, provided the following Savings Provision:
“(2) SAVINGS PROVISION.—If—
“(A) any provision amended or repealed by the amendments made by this section applied to—
“(i) any transaction occurring before the date of the enactment of this Act [Enacted: Dec. 19, 2014],
“(ii) any property acquired before such date of enactment, or
“(iii) any item of income, loss, deduction, or credit taken into account before such date of enactment, and
“(B) the treatment of such transaction, property, or item under such provision would (without regard to the amendments or repeals made by this section) affect the liability for tax for periods ending after date of enactment, nothing in the amendments or repeals made by this section shall be construed to affect the treatment of such transaction, property, or item for purposes of determining liability for tax for periods ending after such date of enactment.”
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by Pub. L. 91-172 applicable with respect to net capital losses sustained in taxable years beginning after Dec. 31, 1969, see section 512(g) of Pub. L. 91-172, set out as a note under section 1212 of this title.
EFFECTIVE DATE OF 1965 AMENDMENT
Amendment by Pub. L. 89-44 applicable to taxable years beginning on or after July 1, 1965, see section 809(f) of Pub. L. 89-44, set out as a note under section 6420 of this title.
EFFECTIVE DATE OF 1958 AMENDMENT
Amendment by Pub. L. 85-866 effective with respect to determinations made after Nov. 14, 1954, see section 59(c) of Pub. L. 85-866, set out as a note under section 1312 of this title.
[1315. Repealed. Pub. L. 94-455, title XIX, 1901(a)(143), Oct. 4, 1976, 90 Stat. 1788]
Section, act Aug. 16, 1954, ch. 736, 68A Stat. 341, related to effective date of this part.
Effective Date of Repeal
Repeal effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title.
[1321. Repealed. Pub. L. 94-455, title XIX, 1901(a)(144), Oct. 4, 1976, 90 Stat. 1788]
Section, act Aug. 16, 1954, ch. 736, 68A Stat. 342, related to involuntary liquidation of LIFO inventories.
Effective Date of Repeal
Repeal effective for taxable years beginning after Dec. 31, 1976, see section 1901(d) of Pub. L. 94-455, set out as an Effective Date of 1976 Amendment note under section 2 of this title.
[1331 to 1337. Repealed. Pub. L. 94-455, title XIX, 1901(a)(145)(A), Oct. 4, 1976, 90 Stat. 1788]
Section 1331, act Aug. 16, 1954, ch. 736, 68A Stat. 343, related to war loss recoveries.
Section 1332, act Aug. 16, 1954, ch. 736, 68A Stat. 343, related to inclusion in gross income of war loss recoveries.
Section 1333, act Aug. 16, 1954, ch. 736, 68A Stat. 344, related to tax adjustment measured by prior benefits.
Section 1334, act Aug. 16, 1954, ch. 736, 68A Stat. 346, related to restoration of value of investments referable to destroyed or seized property.
Section 1335, act Aug. 16, 1954, ch. 736, 68A Stat. 346, related to election by taxpayer for application of section 1333.
Section 1336, act Aug. 16, 1954, ch. 736, 68A Stat. 347, related to basis of recovered property.
Section 1337, act Aug. 16, 1954, ch. 736, 68A Stat. 347, related to applicable rules.
Effective Date of Repeal
Section 1901(a)(145)(B) provided that: “The repeal by subparagraph (A) [repealing sections 1331 to 1337 of this title] shall apply with respect to war loss recoveries in taxable years beginning after December 31, 1976”.
Amendments
1976--Pub. L. 94-455, title XIX, 1901(b)(38), Oct. 4, 1976, 90 Stat. 1803, struck out item 1342 “Computation of tax where taxpayer recovers substantial amount held by another under claim of right”.