# § 4963. Definitions
**(a)** **First tier tax** For purposes of this subchapter, the term “first tier tax” means any tax imposed by subsection (a) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.
**(b)** **Second tier tax** For purposes of this subchapter, the term “second tier tax” means any tax imposed by subsection (b) of section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4971, or 4975.
**(c)** **Taxable event** For purposes of this subchapter, the term “taxable event” means any act (or failure to act) giving rise to liability for tax under section 4941, 4942, 4943, 4944, 4945, 4951, 4952, 4955, 4958, 4966, 4967, 4971, or 4975.
**(d)** **Correct** For purposes of this subchapter—
**(1)** **In general** Except as provided in paragraph (2), the term “correct” has the same meaning as when used in the section which imposes the second tier tax.
**(2)** **Special rules** The term “correct” means—
**(A)** in the case of the second tier tax imposed by section 4942(b), reducing the amount of the undistributed income to zero,
**(B)** in the case of the second tier tax imposed by section 4943(b), reducing the amount of the excess business holdings to zero, and
**(C)** in the case of the second tier tax imposed by section 4944, removing the investment from jeopardy.
**(e)** **Correction period** For purposes of this subchapter—
**(1)** **In general** The term “correction period” means, with respect to any taxable event, the period beginning on the date on which such event occurs and ending 90 days after the date of mailing under section 6212 of a notice of deficiency with respect to the second tier tax imposed on such taxable event, extended by—
**(A)** any period in which a deficiency cannot be assessed under section 6213(a) (determined without regard to the last sentence of section 4961(b)), and
**(B)** any other period which the Secretary determines is reasonable and necessary to bring about correction of the taxable event.
**(2)** **Special rules for when taxable event occurs** For purposes of paragraph (1), the taxable event shall be treated as occurring—
**(A)** in the case of section 4942, on the first day of the taxable year for which there was a failure to distribute income,
**(B)** in the case of section 4943, on the first day on which there are excess business holdings,
**(C)** in the case of section 4971, on the last day of the plan year in which there is an accumulated funding deficiency, and
**(D)** in any other case, the date on which such event occurred.
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**Source Credit**: (Added Pub. L. 96–596, § 2(c)(1), Dec. 24, 1980, 94 Stat. 3473, § 4962; renumbered § 4963, Pub. L. 98–369, div. A, title III, § 305(a), July 18, 1984, 98 Stat. 783; amended Pub. L. 100–203, title X, § 10712(b)(3), Dec. 22, 1987, 101 Stat. 1330–467; Pub. L. 104–168, title XIII, § 1311(c)(2), July 30, 1996, 110 Stat. 1478; Pub. L. 109–280, title XII, § 1231(b)(1), Aug. 17, 2006, 120 Stat. 1098.)
## Editorial Notes
### Amendments
2006—Subsecs. (a), (c). , which directed the insertion of “4966, 4967,” after “4958,” in subsecs. (a) and (c) of section 4963, without specifying the act to be amended, was executed by making the insertion in subsecs. (a) and (c) of this section, which is section 4963 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress.
1996—Subsecs. (a) to (c). inserted “4958,” after “4955,”.
1987—Subsecs. (a) to (c). inserted reference to .
## Statutory Notes and Related Subsidiaries
### Effective Date of 2006 Amendment
> “The amendments made by this section [enacting subchapter G of this chapter and amending this section] shall apply to taxable years beginning after the date of the enactment of this Act [
>
> ].”
, , , provided that:
### Effective Date of 1996 Amendment
Amendment by applicable to excess benefit transactions occurring on or after , and not applicable to any benefit arising from a transaction pursuant to any written contract which was binding on , and at all times thereafter before such transaction occurred, see section 1311(d)(1), (2) of , set out as a note under .
### Effective Date of 1987 Amendment
Amendment by applicable to taxable years beginning after , see , set out as an Effective Date note under .
### Effective Date
For effective date of section with respect to any first tier tax and to any second tier tax, see , set out as a note under .