50 U.S.C. § 4333: Taxes

Summary

When the Alien Property Custodian takes control of a person's property (except property the United States already owned before December 18, 1941), any federal, state, territorial, or local taxes that apply to that property still apply for times before or after the transfer. Putting property under the Custodian does not make Social Security Title II exemptions for federal employment start to apply. The Custodian must pay taxes tied to the property, its earnings, or sale proceeds as soon as doing so does not hurt U.S. interests. A former owner is not responsible for taxes that accrue while the Custodian holds the property, unless the property is returned without the Custodian first paying those taxes. Taxes should be paid from the property or other assets from the same former owner, and tax claims cannot be enforced against the property while the Custodian holds it without his permission. How taxes are figured and paid will follow rules set by the Commissioner of Internal Revenue with the Secretary of the Treasury’s approval. Time limits for assessing or collecting federal taxes stop while the property is held and for six months after; no interest is paid on refunds for periods when those limits are stopped. "Tax" here covers property, income, excess-profits, war-profits, excise, estate, employment taxes, import duties, special assessments, and related interest or penalties not caused by the Custodian. Any special tax exemptions already given to the Custodian stay in place.

Title 50, §4333

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(a)Liability; exemptions

The vesting in or transfer to the Alien Property Custodian of any property or interest (other than any property or interest acquired by the United States prior to December 18, 1941), or the receipt by him of any earnings, increment, or proceeds thereof shall not render inapplicable any Federal, State, Territorial, or local tax for any period prior or subsequent to the date of such vesting or transfer, nor render applicable the exemptions provided in title II of the Social Security Act [42 U.S.C. 401 et seq.] with respect to service performed in the employ of the United States Government or of any instrumentality of the United States.

(b)Payment by Custodian; liability of former owner; enforcement of tax liability; transfer of property

The Alien Property Custodian shall, notwithstanding the filing of any claim or the institution of any suit under this chapter, pay any tax incident to any such property or interest, 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, interest, earnings, increment, or proceeds are held by the Alien Property Custodian, unless they are returned pursuant to this chapter without payment of such tax by the Alien Property Custodian. Every such tax shall be paid by the Alien Property Custodian to the same extent, as nearly as may be deemed practicable, as though the property or interest had not been vested in or transferred to the Alien Property Custodian, and shall be paid only out of the property or interest, or earnings, increment, or proceeds thereof, to which they are incident or out of other property or interests acquired from the same former owner, or earnings, increment, or proceeds thereof. No tax liability may be enforced from any property or interest or the earnings, increment, or proceeds thereof while held by the Alien Property Custodian except with his consent. Where any property or interest is transferred, otherwise than pursuant to section 4309(a) or 4329 of this title, the Alien Property Custodian may transfer the property or interest 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 or interest in the hands of the Alien Property Custodian.

(c)Computation; suspension of limitations, etc.

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 Custodian with provisions of Federal law and regulations applicable with respect to Federal taxes, shall be in accordance with regulations prescribed by the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury to effectuate this section. Statutes of limitations on assessment, collection, refund, or credit of Federal taxes shall be suspended, with respect to any vested property or interest, 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)“Tax” defined

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 Custodian.

(e)Exemptions

Any tax exemption accorded to the Alien Property Custodian by specific provision of existing law shall not be affected by this section.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The Social Security Act, referred to in subsec. (a), is act Aug. 14, 1935, ch. 531, 49 Stat. 620. Title II of the Act is classified generally to subchapter II (§ 401 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see section 1305 of Title 42 and Tables. This chapter, referred to in subsec. (b), was in the original “this Act”, meaning act Oct. 6, 1917, ch. 106, 40 Stat. 411, known as the Trading with the enemy Act, also known as the Trading with the Enemy Act, which is classified principally to this chapter. For complete classification of this Act to the Code, see section 4301 of this title and Tables. Codification Section was formerly classified to section 36 of the former Appendix to this title prior to editorial reclassification and renumbering as this section. Prior to classification as section 36, section was formerly classified to section 620 of the former Appendix to this title.

Executive Documents

Transfer of Functions

Functions vested by law in Alien Property Custodian and Office of Alien Property Custodian transferred to Attorney General by Reorg. Plan No. 1 of 1947, § 101, eff. July 1, 1947, 12 F.R. 4534, 61 Stat. 951, set out in the Appendix to Title 5, Government Organization and Employees.

§4333 Taxes