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Title 26, Internal Revenue CodeRelease 119-73

§982 Admissibility of Documentation Maintained in Foreign Countries

Title 26 › Subtitle Subtitle A— Income Taxes › Chapter 1— NORMAL TAXES AND SURTAXES › Subchapter N— Tax Based on Income From Sources Within or Without the United States › Part III— INCOME FROM SOURCES WITHOUT THE UNITED STATES › Subpart I— Admissibility of Documentation Maintained in Foreign Countries › § 982

Last updated Apr 6, 2026|Official source

Summary

If the IRS formally asks you for documents kept outside the United States and you do not substantially comply within 90 days of the mailed request, a court must block you from using those foreign documents as evidence in your tax case. You escape this penalty only if you show reasonable cause for not producing the documents, and fear of a foreign penalty for disclosing them does not count as reasonable cause. The formal request must come by registered or certified mail and explain what documents are wanted, why earlier responses fell short, and what happens if you do not comply. You have 90 days to ask a federal district court to quash the request. While that case is pending, the 90-day compliance clock stops, and the deadlines for the IRS to assess tax or bring criminal charges are also paused.

Full Legal Text

Title 26, §982

Internal Revenue Code, Source: USLM XML via OLRC

(a)If the taxpayer fails to substantially comply with any formal document request arising out of the examination of the tax treatment of any item (hereinafter in this section referred to as the “examined item”) before the 90th day after the date of the mailing of such request on motion by the Secretary, any court having jurisdiction of a civil proceeding in which the tax treatment of the examined item is an issue shall prohibit the introduction by the taxpayer of any foreign-based documentation covered by such request.
(b)(1)Subsection (a) shall not apply with respect to any documentation if the taxpayer establishes that the failure to provide the documentation as requested by the Secretary is due to reasonable cause.
(2)For purposes of paragraph (1), the fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the requested documentation is not reasonable cause.
(c)For purposes of this section—
(1)The term “formal document request” means any request (made after the normal request procedures have failed to produce the requested documentation) for the production of foreign-based documentation which is mailed by registered or certified mail to the taxpayer at his last known address and which sets forth—
(A)the time and place for the production of the documentation,
(B)a statement of the reason the documentation previously produced (if any) is not sufficient,
(C)a description of the documentation being sought, and
(D)the consequences to the taxpayer of the failure to produce the documentation described in subparagraph (C).
(2)(A)Notwithstanding any other law or rule of law, any person to whom a formal document request is mailed shall have the right to begin a proceeding to quash such request not later than the 90th day after the day such request was mailed. In any such proceeding, the Secretary may seek to compel compliance with such request.
(B)The United States district court for the district in which the person (to whom the formal document request is mailed) resides or is found shall have jurisdiction to hear any proceeding brought under subparagraph (A). An order denying the petition shall be deemed a final order which may be appealed.
(C)The running of the 90-day period referred to in subsection (a) shall be suspended during any period during which a proceeding brought under subparagraph (A) is pending.
(d)For purposes of this section—
(1)The term “foreign-based documentation” means any documentation which is outside the United States and which may be relevant or material to the tax treatment of the examined item.
(2)The term “documentation” includes books and records.
(3)The Secretary, and any court having jurisdiction over a proceeding under subsection (c)(2), may extend the 90-day period referred to in subsection (a).
(e)If any person takes any action as provided in subsection (c)(2), the running of any period of limitations under section 6501 (relating to the assessment and collection of tax) or under section 6531 (relating to criminal prosecutions) with respect to such person shall be suspended for the period during which the proceeding under such subsection, and appeals therein, are pending.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1984—Subsec. (d)(3), (4). Pub. L. 98–369 redesignated par. (4) as (3) and struck out former par. (3) which provided that an item was to be treated as foreign connected if directly or indirectly from a source outside the United States, or the item (in whole or in part) purported to arise outside the United States, or was otherwise dependent on transactions occurring outside the United States.

Statutory Notes and Related Subsidiaries

Effective Date

of 1984 AmendmentAmendment by Pub. L. 98–369 effective as if included in the provision of the Tax Equity and Fiscal Responsibility Act of 1982, Pub. L. 97–248, to which such amendment relates, see section 715 of Pub. L. 98–369, set out as a note under section 31 of this title.

Effective Date

Pub. L. 97–248, title III, § 337(c), Sept. 3, 1982, 96 Stat. 630, as amended by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, provided that: “The

Amendments

made by this section [enacting this section] shall apply with respect to formal document requests (as defined in section 982(c)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as added by this section) mailed after the date of the enactment of this Act [Sept. 3, 1982].”

Reference

Citations & Metadata

Citation

26 U.S.C. § 982

Title 26, Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73