§3109 — Title 31 Money and Finance | U.S. Code

Summary

The Treasury Secretary may create tax and loss bonds and may buy, cash in, or refund them under section 3111. Money from those bonds must be used for lawful spending. The bonds pay no interest and generally cannot be transferred unless the Secretary allows it. The Secretary sets the amounts and rules so people can comply with section 832(e) of the Internal Revenue Code of 1986 (26 U.S.C. 832(e)). If amounts are deducted from the mortgage guaranty account in section 832(e)(3), bonds bought under section 832(e)(2) must be cashed in for that deducted amount to pay taxes under section 832(b)(1)(E).

Title 31, §3109

Money and Finance — Source: USLM XML via OLRC

(a)The Secretary of the Treasury may issue tax and loss bonds of the United States Government and may buy, redeem, and make refunds under section 3111 of this title. The proceeds of the tax and loss bonds shall be used for expenditures authorized by law. Tax and loss bonds are nontransferrable except as provided by the Secretary, bear no interest, and shall be issued in amounts needed to allow persons to comply with section 832(e) of the Internal Revenue Code of 1986 (26 U.S.C. 832(e)). The Secretary may prescribe the amount of tax and loss bonds and the conditions under which the bonds will be issued as required by section 832(e).

(b)For a taxable year in which amounts are deducted from the mortgage guaranty account referred to in section 832(e)(3) of the Internal Revenue Code of 1986 (26 U.S.C. 832(e)(3)), an amount of tax and loss bonds bought under section 832(e)(2) of the Internal Revenue Code of 1986 (26 U.S.C. 832(e)(2)) shall be redeemed for the amount deducted from the account. The amount redeemed shall be applied as necessary to pay taxes due because of the inclusion under section 832(b)(1)(E) of the Internal Revenue Code of 1986 (26 U.S.C. 832(b)(1)(E)) of amounts in gross income. The Secretary also may prescribe additional ways to redeem the bonds.

Notes & Related Subsidiaries

Historical and Revision Notes

Revised SectionSource (U.S. Code)Source (Statutes at Large) 3109(a)31:757c–3(1st–3d sentences).Sept. 24, 1917, ch. 56, 40 Stat. 288, § 26; added Jan. 2, 1968, Pub. L. 90–240, § 5(f), 81 Stat. 778. 3109(b)31:757c–3(4th, last sentences). In subsection (a), the words “and may buy, redeem, and make refunds under section 3111 of this title” are substituted for “and to retire any outstanding obligations of the United States issued under this Act” for consistency. The words “subject to the limitations imposed by section 757b of this title” are omitted as surplus. The word “conditions” is substituted for “terms and conditions” because it is inclusive.

Editorial Notes

Amendments

1986—Pub. L. 99–514 substituted “Internal Revenue Code of 1986” for “Internal Revenue Code of 1954” wherever appearing.

§3109 Tax and loss bonds