Laws, Regulations & Annotations

Business Taxes Law Guide – Revision 2018

Sales and Use Tax Annotations

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320.0000 INTEREST AND PENALTIES—Regulation 1703

Annotation 320.0129

320.0129 Interest and Penalty—FDIC Receivership. The late filing of a tax return by FDIC, acting as receiver of a closed thrift and loan association, is subject to the interest imposed by section 6591 but not to the penalty discussed therein. In as much as the association's seller's permit remained in effect during the receivership and FDIC had not requested a permit in its own name as receiver, the penalty and interest was billed to the association. The rights and protections of FDIC as a receiver are contained in 12 U.S.C. section 1825. The courts have interpreted this section to mean that it "prevents local taxing authorities from forcing FDIC to pay penalties for the failure of previous owner to pay taxes." It also said that FDIC would not have to pay interest on late taxes if it could be shown that the interest imposed was in the nature of a penalty, and was not "to compensate the taxing unit for not having such tax money available to pay its obligations." Since the Board collects interest for exactly that purpose and not as a penalty, the assessment of interest on the late payment is proper and payable by the FDIC, although the penalty is not payable by the FDIC. 3/9/94.