Title 22 — Foreign Relations and IntercourseRelease 119-73

§1631k Taxes

Title 22 › Chapter CHAPTER 21— - SETTLEMENT OF INTERNATIONAL CLAIMS › Subchapter SUBCHAPTER II— - VESTING AND LIQUIDATION OF BULGARIAN, HUNGARIAN, AND RUMANIAN PROPERTY › § 1631k

Last updated Apr 6, 2026|Official source

Summary

When the President puts property or its earnings under the control of an officer or agency, that property can still be taxed for times before or after the transfer. The officer or agency must pay any taxes on that property as soon as doing so won’t hurt the United States’ interests, even if someone has filed a claim or lawsuit. The former owner usually is not responsible for taxes that arise while the designee holds the property, unless the property is returned without the designee having paid the tax. The designee must pay taxes from the property, its proceeds, or other property from the same former owner. Unless a tax lien existed and was perfected when the property vested, the designee may transfer the property free of tax and the sale proceeds count as the property for tax purposes. The Treasury Secretary will make rules for computing and paying these federal taxes, and time limits for tax assessments and collections are paused while the property is held and for six months after. No interest is due on any refund for a period when those time limits were paused. Tax: includes property, income, estate, import duties, special assessments, and similar federal taxes, plus interest or penalties not caused by the designee.

Full Legal Text

Title 22, §1631k

Foreign Relations and Intercourse — Source: USLM XML via OLRC

(a)The vesting in any officer or agency designated by the President under this subchapter of any property or the receipt by such designee of any earnings, increment, or proceeds thereof shall not render inapplicable any Federal, State, Territorial, or local tax for any period before or after such vesting.

(b)The officer or agency designated by the President under this subchapter shall, notwithstanding the filing of any claim or the institution of any suit under this subchapter, pay any tax incident to any such property, or the earnings, increment, or proceeds thereof, at the earliest time appearing to him to be not contrary to the interest of the United States. The former owner shall not be liable for any such tax accruing while such property, earnings, increment, or proceeds are held by such designee, unless they are returned pursuant to this subchapter without payment of such tax by the designee. Every such tax shall be paid by the designee to the same extent, as nearly as may be deemed practicable, as though the property had not been vested, and shall be paid only out of the property, or earnings, increment, or proceeds thereof, to which they are incident or out of other property acquired from the same former owner, or earnings, increment, or proceeds thereof. No tax liability may be enforced from any property or the earnings, increment, or proceeds thereof while held by the designee except with his consent. Where any property is transferred, otherwise than pursuant to section 1631f(a) or 1631f(b) of this title, the designee may transfer the property free and clear of any tax, except to the extent of any lien for a tax existing and perfected at the date of vesting, and the proceeds of such transfer shall, for tax purposes, replace the property in the hands of the designee.

(c)Subject to the provisions of subsection (b) of this section, the manner of computing any Federal taxes, including without limitation by reason of this enumeration, the applicability in such computation of credits, deductions, and exemptions to which the former owner is or would be entitled, and the time and manner of any payment of such taxes and the extent of any compliance by the designee with provisions of Federal law and regulations applicable with respect to Federal taxes, shall be in accordance with regulations prescribed by the Secretary of the Treasury to effectuate this section. Statutes of limitations on assessments, collection, refund, or credit of Federal taxes shall be suspended with respect to any vested property or the earnings, increment, or proceeds thereof, while vested and for six months thereafter; but no interest shall be paid upon any refund with respect to any period during which the statute of limitations is so suspended.

(d)The word “tax” as used in this section shall include, without limitation by reason of this enumeration, any property, income, excess-profits, war-profits, excise, estate, and employment tax, import duty, and special assessment; and also any interest, penalty, additional amount, or addition thereto not arising from any act, omission, neglect, failure, or delay on the part of the designee.

Reference

Citations & Metadata

Citation

22 U.S.C. § 1631k

Title 22 — Foreign Relations and Intercourse

Last Updated

Apr 6, 2026

Release point: 119-73