Claim of Right Tax Computation

IRC §5

Provides a tax benefit (via cross-reference to Section 1341) when a taxpayer must restore a substantial amount held under a claim of right from a prior year.

Eligibility

Applies if the taxpayer included an item in gross income in a prior year because they appeared to have an unrestricted right to it, but later discovered they did not.

Frequently Asked Questions

Who is eligible for the Claim of Right Tax Computation?

Applies if the taxpayer included an item in gross income in a prior year because they appeared to have an unrestricted right to it, but later discovered they did not.

How does the Claim of Right Tax Computation work?

Provides a tax benefit (via cross-reference to Section 1341) when a taxpayer must restore a substantial amount held under a claim of right from a prior year.

What law authorizes the Claim of Right Tax Computation?

The Claim of Right Tax Computation is authorized under IRC §5 of the Internal Revenue Code (Title 26, United States Code).

Statutory Text — IRC §5

Source: Internal Revenue Code, Title 26, United States Code

§ 5. Cross references relating to tax on individuals(a) Other rates of tax on individuals, etc.(1) For rates of tax on nonresident aliens, see section 871. (2) For doubling of tax on citizens of certain foreign countries, see section 891. (3) For rate of withholding in the case of nonresident aliens, see section 1441. (4) For alternative minimum tax, see section 55. (b) Special limitations on tax(1) For limitation on tax in case of income of members of Armed Forces, astronauts, and victims of certain terrorist attacks on death, see section 692. (2) For computation of tax where taxpayer restores substantial amount held under claim of right, see section 1341. (Aug. 16, 1954, ch. 736, 68A Stat. 10; Pub. L. 88–272, title II, § 232(f)(2), Feb. 26, 1964, 78 Stat. 111; Pub. L. 91–172, title III, § 301(b)(2), title VIII, § 803(d)(6), Dec. 30, 1969, 83 Stat. 585, 684; Pub. L. 94–455, title XIX, §§ 1901(b)(22)(B), 1951(c)(3)(A), Oct. 4, 1976, 90 Stat. 1798, 1841; Pub. L. 95–600, title IV, §§ 401(b)(2), 421(e)(1), Nov. 6, 1978, 92 Stat. 2867, 2875; Pub. L. 96–222, title I, § 104(a)(4)(H)(vii), Apr. 1, 1980, 94 Stat. 218; Pub. L. 97–248, title II, § 201(d)(4), formerly § 201(c)(4), Sept. 3, 1982, 96 Stat. 419, renumbered § 201(d)(4), Pub. L. 97–448, title III, § 306(a)(1)(A)(i), Jan. 12, 1983, 96 Stat. 2400; Pub. L. 99–514, title I, § 141(b)(2), title VII, § 701(e)(4)(A), Oct. 22, 1986, 100 Stat. 2117, 2343; Pub. L. 107–134, title I, § 101(b)(1), Jan. 23, 2002, 115 Stat. 2428; Pub. L. 108–121, title I, § 110(a)(2)(A), Nov. 11, 2003, 117 Stat. 1342.)

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Legal Sources

US Code (Official) — 26 USC §5 → Cornell Law Institute — 26 USC §5 → Search IRS.gov for IRC §5 → Treasury Regulations (26 CFR) →

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