Internal Revenue Code Section 982:
Admissibility of documentation maintained in foreign countries
Location in U.S. Code: Title 26A, Chapter 1N, Part III-I
Section 982. Admissibility of documentation maintained in foreign
(a) General rule
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) Reasonable cause exception
(1) In general
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
(2) Foreign nondisclosure law not reasonable cause
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) Formal document request
For purposes of this section--
(1) Formal document request
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
(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) Proceeding to quash
(A) In general
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
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) Suspension of 90-day period
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) Definitions and special rules
For purposes of this section--
(1) Foreign-based documentation
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.
The term ``documentation'' includes books and records.
(3) Authority to extend 90-day period
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) Suspension of statute of limitations
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.