Page:United States Statutes at Large Volume 67.djvu/654

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618

26 USC 3761. 26 USC 3801.

53 Stat. 41. 26 USC 311.

65 Stat. 498. 26 USC 116.

65 Stat. 498. 26 USC 1621.

PUBLIC LAW 287-AUG. 15, 1953

[67 S T A T.

is barred (at the time of such filing) by any law or rule of law, any consent filed by the payee in respect of any amount which represents expenses incurred or interest accrued by the payor for such year shall be void. If a consent requires the inclusion in the gross income of the payee for any taxable year of an amount which was erroneously included in the gross income of the payee for another taxable year and, on the date the consent is filed, correction of the effect of the error is prevented by the operation of any provision of the internal-revenue laws other than section 3761 of the Internal Revenue Code (relating to compromises), then the effect of the error shall be corrected in accordance with section 3801 of the Internal Revenue Code as if the consent were a determination under such section 3801 in which there is adopted a position maintained by the Secretary of the Treasury. The Secretary of the Treasury shall prescribe such regulations as may be necessary to carry out the provisions of this paragraph. SEC. 203. BASIS OF CERTAIN PROPERTY TRANSFERRED IN TRUST. (a) AMENDMENT OF SECTION 113 (a)(5).—The second sentence of section 113(a)(5) (relating to the basis of property transmitted at death) is hereby amended by inserting immediately after the words "revoke the trust" the following: "or to make any change in the enjoyment thereof through the exercise of a power to alter, amend, or terminate the trust". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply (1) only in the case of property transferred by grantors dying after December 31, 1951, and (2) only with respect to taxable years ending after December 31, 1951. SEC. 204. EARNED INCOME FROM SOURCES WITHOUT THE UNITED STATES. (a) AMENDMENT OF SECTION 116 (a)(2).—Section 116(a)(2) (relating to exclusion from gross income of earned income from sources without the United States) is hereby amended by adding at the end thereof the following new sentences: "If the 18-month period includes the entire taxable year, the amount excluded under this paragraph for such taxable year shall not exceed $20,000. If the 18-month period does not include the entire taxable year, the amount excluded under this paragraph for such taxable year shall not exceed an amount which bears the same ratio to $20,000 as the number of days in the part of the taxable year within the 18-month period bears to the total number of days in such year." (b) WITHHOLDING OF TAX ON WAGES OF CITIZENS OUTSIDE THE UNITED STATES.—So much of section 1621(a)(8) (relating to the

definition of wages) as precedes subparagraph (B) tnereof is hereby amended to read as follows: "(8)(A) for services for an employer (other than the United States or any agency thereof)(i) performed by a citizen of the United States if, at the time of the payment of such remuneration, it is reasonable to believe that such remuneration will be excluded from gross income under section 116(a), or (ii) performed in a foreign country by such a citizen if, at the time of the payment of such remuneration, the employer is required by the law of any foreign country to withhold income tax upon such remuneration, or". (c) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to taxable years ending after December 31, 1952, but only to amounts received after such date. I n the case of any taxable year beginning in 1952 and ending in 1953 the exclusion of amounts received after December 31, 1952, shall not exceed an amount which is the same proportion of $20,000 as the number of days