§4701 — Title 26 Internal Revenue Code | U.S. Code

Summary

Anyone who issues a bond or similar obligation that is supposed to be in registered form, but is not, owes an excise tax. The tax equals 1 percent of the principal amount multiplied by the number of calendar years, or parts of years, from issuance to maturity. Obligations sold only to non-U.S. persons, with interest payable only outside the United States and a warning on their face about U.S. tax limits, are excluded, along with certain obligations registered under other rules.

Title 26, §4701

Internal Revenue Code — Source: USLM XML via OLRC

(a)In the case of any person who issues a registration-required obligation which is not in registered form, there is hereby imposed on such person on the issuance of such obligation a tax in an amount equal to the product of—

(1)1 percent of the principal amount of such obligation, multiplied by

(2)the number of calendar years (or portions thereof) during the period beginning on the date of issuance of such obligation and ending on the date of maturity.

(b)For purposes of this section—

(1)(A)The term “registration-required obligation” has the same meaning as when used in section 163(f), except that such term shall not include any obligation which—

(i)is required to be registered under section 149(a), or

(ii)is described in subparagraph (B).

(B)An obligation is described in this subparagraph if—

(i)there are arrangements reasonably designed to ensure that such obligation will be sold (or resold in connection with the original issue) only to a person who is not a United States person,

(ii)interest on such obligation is payable only outside the United States and its possessions, and

(iii)on the face of such obligation there is a statement that any United States person who holds such obligation will be subject to limitations under the United States income tax laws.

(2)The term “registered form” has the same meaning as when used in section 163(f).

Notes & Related Subsidiaries

Editorial Notes

Amendments

2010—Subsec. (b)(1). Pub. L. 111–147 amended par. (1) generally. Prior to amendment, text read as follows: “The term ‘registration-required obligation’ has the same meaning as when used in section 163(f), except that such term shall not include any obligation required to be registered under section 149(a).” 1986—Subsec. (b)(1). Pub. L. 99–514 substituted “section 149(a)” for “section 103(j)”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2010 AmendmentAmendment by Pub. L. 111–147 applicable to obligations issued after the date which is 2 years after Mar. 18, 2010, see section 502(f) of Pub. L. 111–147, set out as a note under section 149 of this title.

Effective Date

of 1986 AmendmentAmendment by Pub. L. 99–514 applicable to bonds issued after Aug. 15, 1986, except as otherwise provided, see sections 1311 to 1318 of Pub. L. 99–514, set out as an

Effective Date

Transitional Rules note under section 141 of this title.

Effective Date

Section applicable to obligations issued after Dec. 31, 1982, with an exception for certain warrants, see section 310(d)(1), (3) of Pub. L. 97–248, set out as an

Effective Date

of 1982 Amendment note under section 103 of this title.

§4701 Tax on Issuer of Registration-required Obligation Not in Registered Form

Summary

Title 26, §4701

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Effective Date

Effective Date

Effective Date

Effective Date

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