CH. 1
NORMAL TAXES AND SURTAXES
191
the taxable year in which such Hen is satisfied or released. Where an amount is added to the taxable income of a corporation by reason of the preceding sentence of this paragraph, the shareholders of the corporation may, pursuant to regulations prescribed by the Secretary or his delegate, elect to compute the income tax with respect to such dividends as are attributable to such amount as though they were received ratably over the period the lien was in effect, SEC. 546. INCOME NOT PLACED ON ANNUAL BASIS. Section 443(b) (relating to computation of tax on change of annual accounting period) shall not apply in the computation of the personal holding company tax imposed by section 541. SEC. 547. DEDUCTION FOR DEFICIENCY DIVIDENDS. (a) GENERAL RULE. — I f a determination (as defined in subsection (c)) with respect to a taxpayer establishes liability for personal holding company tax imposed by section 541 (or by a corresponding provision of a prior income tax law) for any taxable year, a deduction shall be allowed to the taxpayer for the amount of deficiency dividends (as defined in subsection (d)) for the purpose of determining the personal holding company tax for such year, b u t not for the purpose of determining interest, additional amounts, or assessable penalties computed with respect to such personal holding company tax. (b)
RULES FOR APPLICATION OF SECTION.—
(1) ALLOWANCE OF DEDUCTION.—The deficiency dividend deduction shall be allowed as of the date the claim for the deficiency dividend deduction is filed. (2) CREDIT OR REFUND.—If the allowance of a deficiency dividend deduction results in an overpayment of personal holding company tax for any taxable year, credit or refund with respect to such overpayment shall be made as if on the date of the determination 2 years remained before the expiration of the period of limitation on the filing of claim ior refund for the taxable year to which the overpayment relates. No interest shall be allowed on a credit or refund arising from the application of this section. (c) DETERMINATION.—For purposes of this section, the term "determination" means— (1) a decision by the Tax Court or a judgment, decree, or other order by any court of competent jurisdiction, which has become final; (2) a closing agreement made under section 7121; or (3) under regulations prescribed by the Secretary or his delegate, an agreement signed by the Secretary or his delegate and by, or on behalf of, the taxpayer relating to the liability of such taxpayer for personal holding company tax. (d)
DEFICIENCY DIVIDENDS.—
(1) DEFINITION.—For purposes of this section, the term "deficiency dividends" means the amount of the dividends paid by the corporation on or after the date of the determination and before filing claim under subsection (e), which would have been includible in the computation of the deduction for dividends paid under sec§ 547(d)(1)
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