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

Summary

The Treasury Secretary may issue tax and loss bonds under 26 U.S.C. 3111. The bonds pay no interest, are generally not transferable unless the Secretary allows, and are issued in amounts and on terms the Secretary sets so people can meet 26 U.S.C. 832(e). If amounts are deducted from the mortgage guaranty account under 26 U.S.C. 832(e)(3), bonds bought under 26 U.S.C. 832(e)(2) must be redeemed for that amount and used to pay the tax caused by including those amounts in gross income under 26 U.S.C. 832(b)(1)(E). The Secretary may allow other ways to redeem the bonds.

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