An act to amend the Internal Revenue Code of 1954 with respect to the determination of second tier taxes, and for other purposes.

Chapter 42 Second Tier Tax Correction Act of 1980 - Amends the Internal Revenue Code to eliminate the correction period, thus shortening the time for determining the amount of second tier taxes payable for failure to correct specified prohibited transactions, discountenanced conditions, or other taxable events, or for failure to meet minimum standards, with respect to certain private tax-exempt foundations, black-lung benefit trusts, and qualified pension plans.

Requires nonassessment of, abatement of any assessed, or refund or crediting of any collected second tier taxes if any such specified taxable event is corrected during the prescribed period. Provides for a supplemental court proceeding to determine whether a taxable event was so corrected, if any court determination of second tier tax liability has become final. Requires suspension of any levy or proceeding in court for collection of the second tier tax, if within 90 days after its assessment the first tier tax is paid in full and a claim for refund of the amount so paid is filed. Suspends the running of the statute of limitations for the period of such collection suspension. Ends such collection suspension period 90 days after denial of a refund claim if the person against whom a second tier tax was assessed fails to file suit for such refund.

Exempts the charitable contribution deduction of a certain type of charitable trust, under certain circumstances, from treatment as an itemized deduction in determining the adjusted itemized deduction preference for purposes of the alternative minimum tax. Limits such exemption to a charitable trust whose grantor and whose owner of all interests other than income interests is a corporation.

Reduces the rate of excise tax on: (1) highway vehicle tires from $.10 to $.0975 (and on or after October 1, 1984, to $.04875); and (2) other tires (except laminated tires) from $.05 to $.04875. Requires determination of any overpayment of such tax arising by reason of an adjustment for such reduction after the original sale pursuant to warranty, in accordance with principles set forth in regulations and rulings in effect on March 31, 1978. Applies this requirement to the adjustment of any tire between March 31, 1978, and January 1, 1983. Prohibits any credit or refund for adjustment after December 31, 1982.

Deems as satisfying the requirements for a qualified pension plan, according to the rules for cash or deferred arrangements, any money purchase pension plan with a qualified salary reduction arrangement which was in existence on June 27, 1964, in spite of such salary reduction feature. Prohibits such plans from increasing the level of either employer or employee contributions under such a salary reduction arrangement. Requires such plans, for plan years commencing on or after January 1, 1980, to meet established standards for employee participation and discrimination in favor of employees who are officers, shareholders, or highly compensated.

Excludes from the gross income of the trust for the Klamath Indian Tribe all amounts realized by the trust (formerly, only gain resulting) from the Federal condemnation of the Klamath Indian forest lands held by the trustee.