26 U.S.C. § 7701, Definitions
26 U.S.C. § 7701 is a federal statute that defines terms used throughout the Internal Revenue Code. For a U.S. citizen, its definitions help identify how the Code describes persons and trusts in contexts that include U.S. reporting.
Document and scope
Section 7701 is part of Title 26 of the United States Code, the Internal Revenue Code. The Office of the Law Revision Counsel of the U.S. House of Representatives publishes the Code text online. The section supplies definitions for use across the title, subject to its opening qualification that another meaning may apply when distinctly expressed or incompatible with the title's intent.[1]
Its subjects include legal and tax roles, domestic and foreign classification, geographic terms, and specialized meanings used in particular provisions. The section also defines United States person, foreign estate, and foreign trust. The text is a definitions provision, so the applicable meaning depends on the context in which a term appears elsewhere in the Code.[1]
Definitions relevant to trusts and U.S. persons
The section defines a person to include an individual and a trust, along with estates, partnerships, associations, companies, and corporations. A fiduciary includes a trustee and other people acting in a fiduciary capacity. These broad terms establish that a trust and its fiduciary can fall within categories used in federal tax provisions.[1]
For section 7701, a U.S. citizen is included within the definition of United States person. The definition also includes a U.S. resident, domestic partnerships and corporations, certain estates, and a trust meeting both a U.S. court supervision test and a U.S. person control test. The two trust conditions are stated together, so both are part of the statutory definition. Subsection (b) separately defines a resident alien for income tax purposes through the green card test and the substantial presence test, so a non-citizen can also fall within the United States person definition.[1]
A foreign trust is defined by reference to the trust category in the United States person definition. It means a trust other than one meeting the two specified tests for a U.S. trust. Section 7701 separately defines foreign corporations and partnerships as those that are not domestic, while its domestic definition for those entities generally refers to creation or organization in the United States or under U.S. or state law.[1]
The section also defines taxpayer as any person subject to an internal revenue tax, and withholding agent by reference to specified withholding provisions. These terms can matter when another Code section assigns a tax or withholding function. Their appearance here does not itself establish a particular filing requirement for a given trust arrangement.[1]
Connection to U.S. reporting
For a U.S. citizen connected to a foreign trust or foreign accounts, the statute provides classification terms that other Code provisions may use. Section 7701 states that a citizen is a United States person and defines foreign trust, but it does not itself set out foreign trust or foreign account reporting forms or filing thresholds. Reporting requirements must be read in the other provisions and instructions that address the particular reporting topic.[1]
The section's definitions can therefore identify relevant categories without supplying every operational rule attached to those categories. It also explains that a term used in one subtitle in connection with provisions of another subtitle takes the meaning used in those provisions. This directs the reader to the surrounding statutory context when a defined term appears in a reporting rule.[1]
Finding the official text
The official text is available through the United States Code Online site maintained by the Office of the Law Revision Counsel, U.S. House of Representatives.
Key points
When used geographically, the section defines "United States" to include only the States and the District of Columbia. The section separately says that "State" includes the District of Columbia where needed to carry out title provisions.[1]
Related reading
26 C.F.R. § 301.7701-7, Trusts explains the court and control tests used to classify a trust. 26 U.S.C. § 6048, Foreign trust information covers information reporting rules for certain foreign trusts. IRS Foreign Trust Reporting Requirements describes IRS guidance on foreign trust reporting.
Questions and answers
Does section 7701 include a U.S. citizen in the term United States person?
Yes. The definition expressly includes a citizen or resident of the United States. It also lists domestic entities, certain estates, and a trust that meets the court supervision and decision control conditions.[1]
How does section 7701 define a foreign trust?
It defines a foreign trust as a trust that is not within the specified U.S. trust category. That U.S. category requires that a U.S. court be able to exercise primary supervision over the trust's administration and that one or more U.S. persons have authority to control all substantial trust decisions.[1]
Does section 7701 list foreign trust reporting forms?
No. This section defines terms, including United States person and foreign trust, but does not set out forms or filing thresholds for foreign trust reporting. Those details are addressed in other provisions and instructions.[1]
Where can a reader find the official statute?
The Office of the Law Revision Counsel publishes the section on the United States Code Online site. It appears as 26 U.S.C. 7701, Definitions, within Title 26.[1]
Related resources
Related glossary terms
- Section 679: Section 679 addresses certain transfers by U.S. persons to foreign trusts. It treats some property transfers as ownership when the trust has a U.S. beneficiary.
- Nonadverse party: The Internal Revenue Code defines a nonadverse party by reference to the term adverse party. Sections 672 through 678 use the distinction in trust rules.
- Section 6048: Section 6048 sets information reporting rules for certain foreign trusts. Its parts cover notice of events, U.S. owner duties and beneficiary distributions.
Related articles and guides
- IRS page on gifts from foreign persons: IRS reporting rules for gifts and bequests from foreign persons, with thresholds, Form 3520 filing information, and how gifts differ from trust distributions.
- Rev. Proc. 2020-17 and foreign trust reporting: Rev. Proc. 2020-17 exempts certain tax-favored foreign retirement and savings trusts from Section 6048 information reporting.
Related pages
Sources and data notes
- United States Congress, Office of the Law Revision Counsel, 26 U.S.C. § 7701, Definitions. https://uscode.house.gov/us/usc/119-118/t26/s7701/. Retrieved .
Dates in this block record when each source was read for this page.