CHAPTER 68 - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES

Title 26 > CHAPTER 68

Sections (81)

§ 6651 Failure to file tax return or to pay tax

(a) Addition to the tax In case of failure— to file any return required under authority of subchapter A of chapter 61 (other than part III thereof), subchapter A of chapter 51 (relating to distilled spirits, wines, and beer), or of subchapter A of chapter 52 (relating to tobacco, cigars, cigarettes, and cigarette papers and tubes), or of subchapter A of chapter 53 (relating to machine guns and certain other firearms), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate; to pay the amount shown as tax on any return specified in paragraph (1) on or before the date prescribed for payment of such tax (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount shown as tax on such return 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate; or to pay any amount in respect of any tax required to be shown on a return specified in paragraph (1) which is not so shown (including an assessment made pursuant to section 6213(b)) within 21 calendar days from the date of notice and demand therefor (10 business days if the amount for which such notice and demand is made equals or exceeds $100, 000), u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o t d u e t o w i ll f u l n e g l ec t, t h eres ha ll b e a dd e d t o t h e am o u n t o f t a x s t a t e d in s u c hn o t i ce an dd e man d 0.5 p erce n t o f t h e am o u n t o f s u c h t a x i f t h e f ai l u re i s f or n o t m ore t han 1 m o n t h, w i t hana dd i t i o na l 0.5 p erce n t f ore a c ha dd i t i o na l m o n t h or f r a c t i o n t h ereo fd u r in g w hi c h s u c h f ai l u reco n t in u es, n o t e x cee d in g 25 p erce n t in t h e a gg re g a t e . I n t h ec a seo f a f ai l u re t o f i l e a re t u r n o f t a x im p ose d b yc ha pt er 1 w i t hin 60 d a yso f t h e d a t e p rescr ib e df or f i l in g o f s u c h re t u r n (d e t er min e d w i t h re g a r d t o an ye x t e n s i o n so f t im e f or f i l in g), u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o t d u e t o w i ll f u l n e g l ec t, t h e a dd i t i o n t o t a xu n d er p a r a g r a p h (1) s ha ll n o t b e l ess t han t h e l essero f$ 435 or 100 percent of the amount required to be shown as tax on such return.

(b) Penalty imposed on net amount due For purposes of— subsection (a)(1), the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed on the return, subsection (a)(2), the amount of tax shown on the return shall, for purposes of computing the addition for any month, be reduced by the amount of any part of the tax which is paid on or before the beginning of such month and by the amount of any credit against the tax which may be claimed on the return, and subsection (a)(3), the amount of tax stated in the notice and demand shall, for the purpose of computing the addition for any month, be reduced by the amount of any part of the tax which is paid before the beginning of such month.

(c) Limitations and special rule With respect to any return, the amount of the addition under paragraph (1) of subsection (a) shall be reduced by the amount of the addition under paragraph (2) of subsection (a) for any month (or fraction thereof) to which an addition to tax applies under both paragraphs (1) and (2). In any case described in the last sentence of subsection (a), the amount of the addition under paragraph (1) of subsection (a) shall not be reduced under the preceding sentence below the amount provided in such last sentence. If the amount required to be shown as tax on a return is less than the amount shown as tax on such return, subsections (a)(2) and (b)(2) shall be applied by substituting such lower amount.

(d) Increase in penalty for failure to pay tax in certain cases In the case of each month (or fraction thereof) beginning after the day described in paragraph (2) of this subsection, paragraphs (2) and (3) of subsection (a) shall be applied by substituting “1 percent” for “0.5 percent” each place it appears. For purposes of paragraph (1), the day described in this paragraph is the earlier of— the day 10 days after the date on which notice is given under section 6331(d), or the day on which notice and demand for immediate payment is given under the last sentence of section 6331(a).

(e) Exception for estimated tax This section shall not apply to any failure to pay any estimated tax required to be paid by section 6654 or 6655.

(f) Increase in penalty for fraudulent failure to file If any failure to file any return is fraudulent, paragraph (1) of subsection (a) shall be applied— by substituting “15 percent” for “5 percent” each place it appears, and by substituting “75 percent” for “25 percent”.

(g) Treatment of returns prepared by Secretary under section 6020(b) In the case of any return made by the Secretary under section 6020(b)— such return shall be disregarded for purposes of determining the amount of the addition under paragraph (1) of subsection (a), but such return shall be treated as the return filed by the taxpayer for purposes of determining the amount of the addition under paragraphs (2) and (3) of subsection (a).

(h) Limitation on penalty on individual’s failure to pay for months during period of installment agreement In the case of an individual who files a return of tax on or before the due date for the return (including extensions), paragraphs (2) and (3) of subsection (a) shall each be applied by substituting “0.25” for “0.5” each place it appears for purposes of determining the addition to tax for any month during which an installment agreement under section 6159 is in effect for the payment of such tax.

(i) Application to imputed underpayment For purposes of this section, any failure to comply with section 6226(b)(4)(A)(ii) shall be treated as a failure to pay the amount described in subclause (II) thereof and such amount shall be treated for purposes of this section as an amount shown as tax on a return specified in subsection (a)(1).

(j) Adjustment for inflation In the case of any return required to be filed in a calendar year beginning after 2020, the $435 d o ll a r am o u n t u n d ers u b sec t i o n (a) s ha ll b e in cre a se d b y anam o u n t e q u a lt os u c h d o ll a r am o u n t m u lt i pl i e d b y t h ecos t - o f - l i v in g a d j u s t m e n t d e t er min e d u n d ersec t i o n 1 (f) (3) f or t h ec a l e n d a rye a r d e t er min e d b ys u b s t i t u t in g “ c a l e n d a rye a r 2019” f or “ c a l e n d a rye a r 2016” in s u b p a r a g r a p h (A) (ii) t h ereo f . I f an y am o u n t a d j u s t e d u n d er p a r a g r a p h (1) i s n o t am u lt i pl eo f$ 5, such amount shall be rounded to the next lowest multiple of $5.

§ 6652 Failure to file certain information returns, registration statements, etc.

**(a) Returns with respect to certain payments aggregating less than $10 * * I n t h ec a seo f e a c h f ai l u re t o f i l e a s t a t e m e n t o f a p a y m e n tt o an o t h er p erso n re q u i re d u n d er t h e a u t h or i t yo f — sec t i o n 6042 (a) (2) (re l a t in g t o p a y m e n t so fd i v i d e n d s a gg re g a t in g l ess t han$ 10), or section 6044(a)(2) (relating to payments of patronage dividends aggregating less than $10), o n t h e d a t e p rescr ib e d t h ere f or (d e t er min e d w i t h re g a r d t o an ye x t e n s i o n o f t im e f or f i l in g), u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o tt o w i ll f u l n e g l ec t, t h eres ha ll b e p ai d (u p o nn o t i ce an dd e man d b y t h e S ecre t a ry an d in t h es am e mann er a s t a x) b y t h e p erso n f ai l in g t oso f i l e t h es t a t e m e n t,$ 1 for each such statement not so filed, but the total amount imposed on the delinquent person for all such failures during the calendar year shall not exceed $1,000.

(b) Failure to report tips In the case of failure by an employee to report to his employer on the date and in the manner prescribed therefor any amount of tips required to be so reported by section 6053(a) which are wages (as defined in section 3121(a)) or which are compensation (as defined in section 3231(e)), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be paid by the employee, in addition to the tax imposed by section 3101 or section 3201 (as the case may be) with respect to the amount of tips which he so failed to report, an amount equal to 50 percent of such tax.

(c) Returns by exempt organizations and by certain trusts In the case of— a failure to file a return required under section 6033(a)(1) (relating to returns by exempt organizations) or section 6012(a)(6) (relating to returns by political organizations) on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), or a failure to include any of the information required to be shown on a return filed under section 6033(a)(1) or section 6012(a)(6) or to show the correct information, there shall be paid by the exempt organization $20 f ore a c h d a y d u r in g w hi c h s u c h f ai l u reco n t in u es . T h e ma x im u m p e na lt y u n d er t hi ss u b p a r a g r a p h o n f ai l u res w i t h res p ec tt o an y 1 re t u r n s ha ll n o t e x cee d t h e l essero f$ 10,000 or 5 percent of the gross receipts of the organization for the year. In the case of an organization having gross receipts exceeding $1, 000, 000 f or an yye a r, w i t h res p ec tt o t h ere t u r n re q u i re d u n d ersec t i o n 6033 (a) (1) orsec t i o n 6012 (a) (6) f ors u c h ye a r, ina ppl y in g t h e f i rs t se n t e n ceo f t hi ss u b p a r a g r a p h, t h e am o u n t o f t h e p e na lt y f ore a c h d a y d u r in g w hi c ha f ai l u reco n t in u ess ha ll b e$ 100 in lieu of the amount otherwise specified, and, in lieu of applying the second sentence of this subparagraph, the maximum penalty under this subparagraph shall not exceed $50, 000. T h e S ecre t a ry ma y mak e a w r i tt e n d e man d o nan yor g ani z a t i o n s u bj ec tt o p e na lt y u n d ers u b p a r a g r a p h (A) s p ec i f y in g t h ere ina re a so nab l e f u t u re d a t e b y w hi c h t h ere t u r n s ha ll b e f i l e d (or t h e in f or ma t i o n f u r ni s h e d) f or p u r p oseso f t hi ss u b p a r a g r a p h . I f an y p erso n f ai l s t oco m pl y w i t han y d e man d u n d erc l a u se (i) o n or b e f ore t h e d a t es p ec i f i e d in s u c h d e man d, t h eres ha ll b e p ai d b y t h e p erso n f ai l in g t osoco m pl y$ 10 for each day after the expiration of the time specified in such demand during which such failure continues. The maximum penalty imposed under this subparagraph on all persons for failures with respect to any 1 return shall not exceed $5, 000. I n t h ec a seo f a f ai l u re t oco m pl y w i t h t h ere q u i re m e n t so f sec t i o n 6104 (d) w i t h res p ec tt o an y ann u a l re t u r n o n t h e d a t e an d in t h e mann er p rescr ib e d t h ere f or (d e t er min e d w i t h re g a r d t o an ye x t e n s i o n o f t im e f or f i l in g) orre p or t re q u i re d u n d ersec t i o n 527 (j), t h eres ha ll b e p ai d b y t h e p erso n f ai l in g t o m ee t s u c h re q u i re m e n t s$ 20 for each day during which such failure continues. The maximum penalty imposed under this subparagraph on all persons for failures with respect to any 1 return or report shall not exceed $10, 000. I n t h ec a seo f a f ai l u re t oco m pl y w i t h t h ere q u i re m e n t so f sec t i o n 6104 (d) w i t h res p ec tt o an ye x e m pt s t a t u s a ppl i c a t i o nma t er ia l s (a s d e f in e d in s u c h sec t i o n) or n o t i ce ma t er ia l s (a s d e f in e d in s u c h sec t i o n) o n t h e d a t e an d in t h e mann er p rescr ib e d t h ere f or, t h eres ha ll b e p ai d b y t h e p erso n f ai l in g t o m ee t s u c h re q u i re m e n t s$ 20 for each day during which such failure continues. This paragraph shall not apply with respect to any notice required under section 6033(i). In the case of a failure to file a return required under section 6034 (relating to returns by certain trusts) or section 6043(b) (relating to terminations, etc., of exempt organizations), on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), there shall be paid by the exempt organization or trust failing so to file $10 f ore a c h d a y d u r in g w hi c h s u c h f ai l u reco n t in u es, b u tt h e t o t a l am o u n t im p ose d u n d er t hi ss u b p a r a g r a p h o nan yor g ani z a t i o n or t r u s t f or f ai l u re t o f i l e an y 1 re t u r n s ha ll n o t e x cee d$ 5,000. The Secretary may make written demand on an organization or trust failing to file under subparagraph (A) specifying therein a reasonable future date by which such filing shall be made for purposes of this subparagraph. If such filing is not made on or before such date, there shall be paid by the person failing so to file $10 f ore a c h d a y a f t er t h ee x p i r a t i o n o f t h e t im es p ec i f i e d in t h e w r i tt e n d e man dd u r in g w hi c h s u c h f ai l u reco n t in u es, b u tt h e t o t a l am o u n t im p ose d u n d er t hi ss u b p a r a g r a p h o na llp erso n s f or f ai l u re t o f i l e an y 1 re t u r n s ha ll n o t e x cee d$ 5,000. In the case of a trust which is required to file a return under section 6034(a), subparagraphs (A) and (B) of this paragraph shall not apply and paragraph (1) shall apply in the same manner as if such return were required under section 6033, except that— the 5 percent limitation in the second sentence of paragraph (1)(A) shall not apply, in the case of any trust with gross income in excess of $250, 000, ina ppl y in g t h e f i rs t se n t e n ceo f p a r a g r a p h (1) (A), t h e am o u n t o f t h e p e na lt y f ore a c h d a y d u r in g w hi c ha f ai l u reco n t in u ess ha ll b e$ 100 in lieu of the amount otherwise specified, and in lieu of applying the second sentence of paragraph (1)(A), the maximum penalty under paragraph (1)(A) shall not exceed $50, 000, an d t h e t hi r d se n t e n ceo f p a r a g r a p h (1) (A) s ha ll b e d i sre g a r d e d . I na dd i t i o n t o an y p e na lt y im p ose d o n t h e t r u s tp u rs u an tt o t hi ss u b p a r a g r a p h, i f t h e p erso n re q u i re d t o f i l es u c h re t u r nkn o w in g l y f ai l s t o f i l e t h ere t u r n, s u c h p e na lt ys ha ll a l so b e im p ose d o n s u c h p erso n w h os ha ll b e p erso na ll y l iab l e f ors u c h p e na lt y . I n t h ec a seo f a f ai l u re t o f i l e a d i sc l os u rere q u i re d u n d ersec t i o n 6033 (a) (2), t h eres ha ll b e p ai d b y t h e t a x - e x e m pt e n t i t y (t h ee n t i t y mana g er in t h ec a seo f a t a x - e x e m pt e n t i t y d escr ib e d in p a r a g r a p h (4), (5), (6), or (7) o f sec t i o n 4965 (c))$ 100 for each day during which such failure continues. The maximum penalty under this subparagraph on failures with respect to any 1 disclosure shall not exceed $50, 000. T h e S ecre t a ry ma y mak e a w r i tt e n d e man d o nan ye n t i t yor mana g ers u bj ec tt o p e na lt y u n d ers u b p a r a g r a p h (A) s p ec i f y in g t h ere ina re a so nab l e f u t u re d a t e b y w hi c h t h e d i sc l os u res ha ll b e f i l e df or p u r p oseso f t hi ss u b p a r a g r a p h . I f an ye n t i t yor mana g er f ai l s t oco m pl y w i t han y d e man d u n d erc l a u se (i) o n or b e f ore t h e d a t es p ec i f i e d in s u c h d e man d, t h eres ha ll b e p ai d b ys u c h e n t i t yor mana g er f ai l in g t osoco m pl y$ 100 for each day after the expiration of the time specified in such demand during which such failure continues. The maximum penalty imposed under this subparagraph on all entities and managers for failures with respect to any 1 disclosure shall not exceed $10, 000. A n y t er m u se d in t hi ssec t i o n w hi c hi s a l so u se d in sec t i o n 4965 s ha ll ha v e t h e m e anin gg i v e n s u c h t er m u n d ersec t i o n 4965. I n t h ec a seo f a f ai l u re t os u bmi t an o t i cere q u i re d u n d ersec t i o n 506 (a) (re l a t in g t oor g ani z a t i o n sre q u i re d t o n o t i f y S ecre t a ryo f in t e n tt oo p er a t e a s 501 (c) (4)) o n t h e d a t e an d in t h e mann er p rescr ib e d t h ere f or, t h eres ha ll b e p ai d b y t h eor g ani z a t i o n f ai l in g t osos u bmi t$ 20 for each day during which such failure continues, but the total amount imposed under this subparagraph on any organization for failure to submit any one notice shall not exceed $5, 000. T h e S ecre t a ry ma y mak e w r i tt e n d e man d o nan or g ani z a t i o n s u bj ec tt o p e na lt y u n d ers u b p a r a g r a p h (A) s p ec i f y in g in s u c h d e man d a re a so nab l e f u t u re d a t e b y w hi c h t h e n o t i ces ha ll b es u bmi tt e df or p u r p oseso f t hi ss u b p a r a g r a p h . I f s u c hn o t i ce i s n o t s u bmi tt e d o n or b e f ores u c h d a t e, t h eres ha ll b e p ai d b y t h e p erso n f ai l in g t osos u bmi t$ 20 for each day after the expiration of the time specified in the written demand during which such failure continues, but the total amount imposed under this subparagraph on all persons for failure to submit any one notice shall not exceed $5, 000. N o p e na lt ys ha ll b e im p ose d u n d er t hi ss u b sec t i o n w i t h res p ec tt o an y f ai l u re i f i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se . A n y p e na lt y im p ose d u n d er t hi ss u b sec t i o n s ha ll b e p ai d o nn o t i ce an dd e man d o f t h e S ecre t a ry an d in t h es am e mann er a s t a x . I f m ore t han 1 p erso ni s l iab l e u n d er t hi ss u b sec t i o n f or an y p e na lt y w i t h res p ec tt o an y f ai l u re, a ll s u c h p erso n ss ha ll b e j o in tl y an d se v er a ll y l iab l e w i t h res p ec tt os u c h f ai l u re . F or p u r p oseso f t hi ss u b sec t i o n, t h e t er m “ p erso n ” m e an s an yo ff i cer, d i rec t or, t r u s t ee, e m pl oyee, oro t h er in d i v i d u a lw h o i s u n d er a d u t y t o p er f or m t h e a c t in res p ec t o f w hi c h t h e v i o l a t i o n occ u rs . I n t h ec a seo f an y f ai l u rere l a t in g t o a re t u r n re q u i re d t o b e f i l e d ina c a l e n d a rye a r b e g innin g a f t er 2014, e a c h o f t h e d o ll a r am o u n t s u n d er p a r a g r a p h s (1), (2), an d (3) s ha ll b e in cre a se d b y anam o u n t e q u a lt os u c h d o ll a r am o u n t m u lt i pl i e d b y t h ecos t - o f - l i v in g a d j u s t m e n t d e t er min e d u n d ersec t i o n 1 (f) (3) f or t h ec a l e n d a rye a r d e t er min e d b ys u b s t i t u t in g “ c a l e n d a rye a r 2013” f or “ c a l e n d a rye a r 2016” in s u b p a r a g r a p h (A) (ii) t h ereo f . I f an y am o u n t a d j u s t e d u n d ers u b p a r a g r a p h (A) — i s n o tl ess t han$ 5,000 and is not a multiple of $500, s u c ham o u n t s ha ll b ero u n d e d t o t h e n e x tl o w es t m u lt i pl eo f$ 500, and is not described in clause (i) and is not a multiple of $5, s u c ham o u n t s ha ll b ero u n d e d t o t h e n e x tl o w es t m u lt i pl eo f$ 5.

(d) Annual registration and other notification by pension plan In the case of any failure to file a registration statement required under section 6057(a) (relating to annual registration of certain plans) which includes all participants required to be included in such statement, on the date prescribed therefor (determined without regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing so to file, an amount equal to $10 f ore a c h p a r t i c i p an tw i t h res p ec tt o w h o m t h ere i s a f ai l u re t o f i l e, m u lt i pl i e d b y t h e n u mb ero fd a ys d u r in g w hi c h s u c h f ai l u reco n t in u es, b u tt h e t o t a l am o u n t im p ose d u n d er t hi s p a r a g r a p h o nan y p erso n f or an y f ai l u re t o f i l e w i t h res p ec tt o an y pl an ye a rs ha ll n o t e x cee d$ 50,000. In the case of failure to file a notification required under section 6057(b) (relating to notification of change of status) on the date prescribed therefor (determined without regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing so to file, $10 f ore a c h d a y d u r in g w hi c h s u c h f ai l u reco n t in u es, b u tt h e t o t a l am o u n t s im p ose d u n d er t hi s p a r a g r a p h o nan y p erso n f or f ai l u re t o f i l e an y n o t i f i c a t i o n s ha ll n o t e x cee d$ 10,000.

(e) Information required in connection with certain plans of deferred compensation, etc. In the case of failure to file a return or statement required under section 6058 (relating to information required in connection with certain plans of deferred compensation), 6047 (relating to information relating to certain trusts and annuity and bond purchase plans), or 6039D (relating to returns and records with respect to certain fringe benefit plans) on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing so to file, $250 f ore a c h d a y d u r in g w hi c h s u c h f ai l u reco n t in u es, b u tt h e t o t a l am o u n t im p ose d u n d er t hi ss u b sec t i o n o nan y p erso n f or f ai l u re t o f i l e an yre t u r n s ha ll n o t e x cee d$ 150,000. This subsection shall not apply to any return or statement which is an information return described in section 6724(d)(1)(C)(ii) or a payee statement described in section 6724(d)(2)(AA).

(f) Returns required under section 6039C In the case of each failure to make a return required by section 6039C which contains the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not to willful neglect, the amount determined under paragraph (2) shall be paid (upon notice and demand by the Secretary and in the same manner as tax) by the person failing to make such return. For purposes of paragraph (1), the amount determined under this paragraph with respect to any failure shall be $25 f ore a c h d a y d u r in g w hi c h s u c h f ai l u reco n t in u es . T h e am o u n t d e t er min e d u n d er p a r a g r a p h (2) w i t h res p ec tt o an y p erso n f or f ai l in g t o m ee tt h ere q u i re m e n t so f sec t i o n 6039 C f or an yc a l e n d a rye a rs ha ll n o t e x cee d t h e l essero f —$ 25,000, or 5 percent of the aggregate of the fair market value of the United States real property interests owned by such person at any time during such year. For purposes of the preceding sentence, fair market value shall be determined as of the end of the calendar year (or, in the case of any property disposed of during the calendar year, as of the date of such disposition).

([(g) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(39)(B), Dec. 19, 2014, 128 Stat. 4043]

(h) Failure to give notice to recipients of certain pension, etc., distributions In the case of each failure to provide notice as required by section 3405(e)(10)(B), at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such notice, an amount equal to $100 f ore a c h s u c h f ai l u re, b u tt h e t o t a l am o u n t im p ose d o n s u c h p erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 50,000.

(i) Failure to give written explanation to recipients of certain qualifying rollover distributions In the case of each failure to provide a written explanation as required by section 402(f), at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such written explanation, an amount equal to $100 f ore a c h s u c h f ai l u re, b u tt h e t o t a l am o u n t im p ose d o n s u c h p erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 50,000.

(j) Failure to file certification with respect to certain residential rental projects In the case of each failure to provide a certification as required by section 142(d)(7) at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such certification, an amount equal to $100 for each such failure.

(k) 11 See 1993 Amendment note below. Failure to make reports required under section 1202 In the case of a failure to make a report required under section 1202(d)(1)(C) which contains the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to make such report, an amount equal to $50 f ore a c h re p or tw i t h res p ec tt o w hi c h t h ere w a ss u c ha f ai l u re . I n t h ec a seo f an y f ai l u re d u e t o n e g l i g e n ceor in t e n t i o na l d i sre g a r d, t h e p rece d in g se n t e n ces ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 100” for “$50”. In the case of a report covering periods in 2 or more years, the penalty determined under preceding provisions of this subsection shall be multiplied by the number of such years. No penalty shall be imposed under this subsection on any failure which is shown to be due to reasonable cause and not willful neglect.

(l) Failure to file return with respect to certain corporate transactions In the case of any failure to make a return required under section 6043(c) containing the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause, there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to file such return, an amount equal to $500 f ore a c h d a y d u r in g w hi c h s u c h f ai l u reco n t in u es, b u tt h e t o t a l am o u n t im p ose d u n d er t hi ss u b sec t i o n w i t h res p ec tt o an yre t u r n s ha ll n o t e x cee d$ 100,000.

(m) Alcohol and tobacco taxes For penalties for failure to file certain information returns with respect to alcohol and tobacco taxes, see, generally, subtitle E.

(n) Failure to make reports required under sections 3511, 6053(c)(8), and 7705 In the case of a failure to make a report required under section 3511, 6053(c)(8), or 7705 which contains the information required by such section on the date prescribed therefor (determined with regard to any extension of time for filing), there shall be paid (on notice and demand by the Secretary and in the same manner as tax) by the person failing to make such report, an amount equal to $50 f ore a c h re p or tw i t h res p ec tt o w hi c h t h ere w a ss u c ha f ai l u re . I n t h ec a seo f an y f ai l u re d u e t o n e g l i g e n ceor in t e n t i o na l d i sre g a r d t h e p rece d in g se n t e n ces ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 100” for “$50”.

(o) Failure to provide notices with respect to qualified small employer health reimbursement arrangements In the case of each failure to provide a written notice as required by section 9831(d)(4), unless it is shown that such failure is due to reasonable cause and not willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such written notice, an amount equal to $50 p ere m pl oyee p er in c i d e n t o ff ai l u re t o p ro v i d es u c hn o t i ce, b u tt h e t o t a l am o u n t im p ose d o n s u c h p erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 2,500.

(p) Failure to provide notice under section 83(i) In the case of each failure to provide a notice as required by section 83(i)(6), at the time prescribed therefor, unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid, on notice and demand of the Secretary and in the same manner as tax, by the person failing to provide such notice, an amount equal to $100 f ore a c h s u c h f ai l u re, b u tt h e t o t a l am o u n t im p ose d o n s u c h p erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 50,000.

§ 6653 Failure to pay stamp tax

Any person (as defined in section 6671(b)) who— willfully fails to pay any tax imposed by this title which is payable by stamp, coupons, tickets, books, or other devices or methods prescribed by this title or by regulations under the authority of this title, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable for a penalty of 50 percent of the total amount of the underpayment of the tax. ( Aug. 16, 1954, ch. 736 , 68A Stat. 822 ; Pub. L. 85–866, title I, § 86 , Sept. 2, 1958 , 72 Stat. 1665 ; Pub. L. 91–172, title I, § 101(j)(50) , title IX, § 943(c)(6), Dec. 30, 1969 , 83 Stat. 531 , 729; Pub. L. 91–679, § 2 , Jan. 12, 1971 , 84 Stat. 2063 ; Pub. L. 93–406, title II, § 1016(a)(18) , Sept. 2, 1974 , 88 Stat. 931 ; Pub. L. 96–223, title I, § 101(f)(8) , Apr. 2, 1980 , 94 Stat. 253 ; Pub. L. 97–34, title V, § 501(b) , title VII, § 722(b)(1), Aug. 13, 1981 , 95 Stat. 326 , 342; Pub. L. 97–248, title III, § 325(a) , Sept. 3, 1982 , 96 Stat. 616 ; Pub. L. 97–448, title I , §§ 105(a)(1)(D), 107(a)(3), Jan. 12, 1983 , 96 Stat. 2384 , 2391; Pub. L. 98–67, title I, § 106 , Aug. 5, 1983 , 97 Stat. 382 ; Pub. L. 98–369, div. A, title I, § 179(b)(3) , July 18, 1984 , 98 Stat. 718 ; Pub. L. 99–44, § 1(b) , May 24, 1985 , 99 Stat. 77 ; Pub. L. 99–514, title XV, § 1503(a) , (b), (c)(2), (3), (d)(1), Oct. 22, 1986 , 100 Stat. 2742 , 2743; Pub. L. 100–647, title I, § 1015(b)(2)(A) , (B), (3), Nov. 10, 1988 , 102 Stat. 3569 ; Pub. L. 101–239, title VII, § 7721(c)(1) , Dec. 19, 1989 , 103 Stat. 2399 .)

§ 6654 Failure by individual to pay estimated income tax

(a) Addition to the tax Except as otherwise provided in this section, in the case of any underpayment of estimated tax by an individual, there shall be added to the tax under chapter 1, the tax under chapter 2, and the tax under chapter 2A for the taxable year an amount determined by applying— the underpayment rate established under section 6621, to the amount of the underpayment, for the period of the underpayment.

(b) Amount of underpayment; period of underpayment For purposes of subsection (a)— The amount of the underpayment shall be the excess of— the required installment, over the amount (if any) of the installment paid on or before the due date for the installment. The period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier— the 15th day of the 4th month following the close of the taxable year, or with respect to any portion of the underpayment, the date on which such portion is paid. For purposes of paragraph (2)(B), a payment of estimated tax shall be credited against unpaid required installments in the order in which such installments are required to be paid.

(c) Number of required installments; due dates For purposes of this section— There shall be 4 required installments for each taxable year. In the case of the following required installments: The due date is: 1st April 15 2nd June 15 3rd September 15 4th January 15 of the following taxable year.

(d) Amount of required installments For purposes of this section— Except as provided in paragraph (2), the amount of any required installment shall be 25 percent of the required annual payment. For purposes of subparagraph (A), the term “required annual payment” means the lesser of— 90 percent of the tax shown on the return for the taxable year (or, if no return is filed, 90 percent of the tax for such year), or 100 percent of the tax shown on the return of the individual for the preceding taxable year. Clause (ii) shall not apply if the preceding taxable year was not a taxable year of 12 months or if the individual did not file a return for such preceding taxable year. If the adjusted gross income shown on the return of the individual for the preceding taxable year beginning in any calendar year exceeds $150, 000, c l a u se (ii) o f s u b p a r a g r a p h (B) s ha ll b e a ppl i e d b ys u b s t i t u t in g “110 p erce n t ” f or “100 p erce n t ”. I n t h ec a seo f ama rr i e d in d i v i d u a l (w i t hin t h e m e anin g o f sec t i o n 7703) w h o f i l es a se p a r a t ere t u r n f or t h e t a x ab l eye a r f or w hi c h t h e am o u n t o f t h e in s t a ll m e n t i s b e in g d e t er min e d, c l a u se (i) s ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 75,000” for “$150,000”. In the case of an estate or trust, adjusted gross income shall be determined as provided in section 67(e). In the case of any required installment, if the individual establishes that the annualized income installment is less than the amount determined under paragraph (1)— the amount of such required installment shall be the annualized income installment, and any reduction in a required installment resulting from the application of this subparagraph shall be recaptured by increasing the amount of the next required installment determined under paragraph (1) by the amount of such reduction (and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this clause). In the case of any required installment, the annualized income installment is the excess (if any) of— an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income, alternative minimum taxable income, and adjusted self-employment income for months in the taxable year ending before the due date for the installment, over the aggregate amount of any prior required installments for the taxable year. For purposes of this paragraph— The taxable income, alternative minimum taxable income, and adjusted self-employment income shall be placed on an annualized basis under regulations prescribed by the Secretary. In the case of the following required installments: The applicable percentage is: 1st 22.5 2nd 45 3rd 67.5 4th 90. The term “adjusted self-employment income” means self-employment income (as defined in section 1402(b)); except that section 1402(b) shall be applied by placing wages (within the meaning of section 1402(b)) for months in the taxable year ending before the due date for the installment on an annualized basis consistent with clause (i). Any amounts required to be included in gross income under section 951(a) (and credits properly allocable thereto) shall be taken into account in computing any annualized income installment under subparagraph (B) in a manner similar to the manner under which partnership income inclusions (and credits properly allocable thereto) are taken into account. If a taxpayer elects to have this clause apply to any taxable year— clause (i) shall not apply, and for purposes of computing any annualized income installment for such taxable year, the taxpayer shall be treated as having received ratably during such taxable year items of income and credit described in clause (i) in an amount equal to the amount of such items shown on the return of the taxpayer for the preceding taxable year (the second preceding taxable year in the case of the first and second required installments for such taxable year).

(e) Exceptions No addition to tax shall be imposed under subsection (a) for any taxable year if the tax shown on the return for such taxable year (or, if no return is filed, the tax), reduced by the credit allowable under section 31, is less than $1,000. No addition to tax shall be imposed under subsection (a) for any taxable year if— the preceding taxable year was a taxable year of 12 months, the individual did not have any liability for tax for the preceding taxable year, and the individual was a citizen or resident of the United States throughout the preceding taxable year. No addition to tax shall be imposed under subsection (a) with respect to any underpayment to the extent the Secretary determines that by reason of casualty, disaster, or other unusual circumstances the imposition of such addition to tax would be against equity and good conscience. No addition to tax shall be imposed under subsection (a) with respect to any underpayment if the Secretary determines that— the taxpayer— retired after having attained age 62, or became disabled, in the taxable year for which estimated payments were required to be made or in the taxable year preceding such taxable year, and such underpayment was due to reasonable cause and not to willful neglect.

(f) Tax computed after application of credits against tax For purposes of this section, the term “tax” means— the tax imposed by chapter 1 (other than any increase in such tax by reason of section 143(m)), plus the tax imposed by chapter 2, plus the tax imposed by chapter 2A, minus the credits against tax provided by part IV of subchapter A of chapter 1, other than the credit against tax provided by section 31 (relating to tax withheld on wages).

(g) Application of section in case of tax withheld on wages For purposes of applying this section, the amount of the credit allowed under section 31 for the taxable year shall be deemed a payment of estimated tax, and an equal part of such amount shall be deemed paid on each due date for such taxable year, unless the taxpayer establishes the dates on which all amounts were actually withheld, in which case the amounts so withheld shall be deemed payments of estimated tax on the dates on which such amounts were actually withheld. The taxpayer may apply paragraph (1) separately with respect to— wage withholding, and all other amounts withheld for which credit is allowed under section 31.

(h) Special rule where return filed on or before January 31 If, on or before January 31 of the following taxable year, the taxpayer files a return for the taxable year and pays in full the amount computed on the return as payable, then no addition to tax shall be imposed under subsection (a) with respect to any underpayment of the 4th required installment for the taxable year.

(i) Special rules for farmers and fishermen For purposes of this section— If an individual is a farmer or fisherman for any taxable year— there shall be only 1 required installment for the taxable year, the due date for such installment shall be January 15 of the following taxable year, the amount of such installment shall be equal to the required annual payment determined under subsection (d)(1)(B) by substituting “66⅔ percent” for “90 percent” and without regard to subparagraph (C) of subsection (d)(1), and subsection (h) shall be applied— by substituting “March 1” for “January 31”, and by treating the required installment described in subparagraph (A) of this paragraph as the 4th required installment. An individual is a farmer or fisherman for any taxable year if— the individual’s gross income from farming or fishing (including oyster farming) for the taxable year is at least 66⅔ percent of the total gross income from all sources for the taxable year, or such individual’s gross income from farming or fishing (including oyster farming) shown on the return of the individual for the preceding taxable year is at least 66⅔ percent of the total gross income from all sources shown on such return.

(j) Special rules for nonresident aliens In the case of a nonresident alien described in section 6072(c): There shall be 3 required installments for the taxable year. The due dates for required installments under this subsection shall be determined under the following table: In the case of the following required installments: The due date is: 1st June 15 2nd September 15 3rd January 15 of the following taxable year. In the case of the first required installment, subsection (d) shall be applied by substituting “50 percent” for “25 percent” in subsection (d)(1)(A). The applicable percentage for purposes of subsection (d)(2) shall be determined under the following table: In the case of the following required installments: The applicable percentage is: 1st 22.5 2nd 45 3rd 67.5 4th 90.

(k) Fiscal years and short years In applying this section to a taxable year beginning on any date other than January 1, there shall be substituted, for the months specified in this section, the months which correspond thereto. This section shall be applied to taxable years of less than 12 months in accordance with regulations prescribed by the Secretary.

(l) Estates and trusts Except as otherwise provided in this subsection, this section shall apply to any estate or trust. With respect to any taxable year ending before the date 2 years after the date of the decedent’s death, this section shall not apply to— the estate of such decedent, or any trust— all of which was treated (under subpart E of part I of subchapter J of chapter 1) as owned by the decedent, and to which the residue of the decedent’s estate will pass under his will (or, if no will is admitted to probate, which is the trust primarily responsible for paying debts, taxes, and expenses of administration). This section shall not apply to any trust which is subject to the tax imposed by section 511 or which is a private foundation. In the case of any estate or trust to which this section applies, subsection (d)(2)(B)(i) shall be applied by substituting “ending before the date 1 month before the due date for the installment” for “ending before the due date for the installment”.

(m) Special rule for Medicare tax For purposes of this section, the tax imposed under section 3101(b)(2) (to the extent not withheld) shall be treated as a tax imposed under chapter 2.

(n) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.

§ 6655 Failure by corporation to pay estimated income tax

(a) Addition to tax Except as otherwise provided in this section, in the case of any underpayment of estimated tax by a corporation, there shall be added to the tax under chapter 1 for the taxable year an amount determined by applying— the underpayment rate established under section 6621, to the amount of the underpayment, for the period of the underpayment.

(d) Amount of required installments For purposes of this section— Except as otherwise provided in this section, the amount of any required installment shall be 25 percent of the required annual payment. Except as otherwise provided in this subsection, the term “required annual payment” means the lesser of— 100 percent of the tax shown on the return for the taxable year (or, if no return is filed, 100 percent of the tax for such year), or 100 percent of the tax shown on the return of the corporation for the preceding taxable year. Clause (ii) shall not apply if the preceding taxable year was not a taxable year of 12 months, or the corporation did not file a return for such preceding taxable year showing a liability for tax. Except as provided in subparagraph (B), clause (ii) of paragraph (1)(B) shall not apply in the case of a large corporation. Subparagraph (A) shall not apply for purposes of determining the amount of the 1st required installment for any taxable year. Any reduction in such 1st installment by reason of the preceding sentence shall be recaptured by increasing the amount of the next required installment determined under paragraph (1) by the amount of such reduction.

(e) Lower required installment where annualized income installment or adjusted seasonal installment is less than amount determined under subsection (d) In the case of any required installment, if the corporation establishes that the annualized income installment or the adjusted seasonal installment is less than the amount determined under subsection (d)(1) (as modified by paragraphs (2) and (3) of subsection (d))— the amount of such required installment shall be the annualized income installment (or, if lesser, the adjusted seasonal installment), and any reduction in a required installment resulting from the application of this paragraph shall be recaptured by increasing the amount of the next required installment determined under subsection (d)(1) (as so modified) by the amount of such reduction (and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this subparagraph). In the case of any required installment, the annualized income installment is the excess (if any) of— an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income, adjusted financial statement income (as defined in section 56A), and modified taxable income— for the first 3 months of the taxable year, in the case of the 1st required installment, for the first 3 months of the taxable year, in the case of the 2nd required installment, for the first 6 months of the taxable year in the case of the 3rd required installment, and for the first 9 months of the taxable year, in the case of the 4th required installment, over the aggregate amount of any prior required installments for the taxable year. For purposes of this paragraph— The taxable income, adjusted financial statement income (as defined in section 56A), and modified taxable income shall be placed on an annualized basis under regulations prescribed by the Secretary. In the case of the following required installments: The applicable percentage is: 1st 25 2nd 50 3rd 75 4th 100. The term “modified taxable income” has the meaning given such term by section 59A(c)(1). If the taxpayer makes an election under this clause— subclause (I) of subparagraph (A)(i) shall be applied by substituting “2 months” for “3 months”, subclause (II) of subparagraph (A)(i) shall be applied by substituting “4 months” for “3 months”, subclause (III) of subparagraph (A)(i) shall be applied by substituting “7 months” for “6 months”, and subclause (IV) of subparagraph (A)(i) shall be applied by substituting “10 months” for “9 months”. If the taxpayer makes an election under this clause— subclause (II) of subparagraph (A)(i) shall be applied by substituting “5 months” for “3 months”, subclause (III) of subparagraph (A)(i) shall be applied by substituting “8 months” for “6 months”, and subclause (IV) of subparagraph (A)(i) shall be applied by substituting “11 months” for “9 months”. An election under clause (i) or (ii) shall apply to the taxable year for which made and such an election shall be effective only if made on or before the date required for the payment of the first required installment for such taxable year. In the case of any required installment, the amount of the adjusted seasonal installment is the excess (if any) of— 100 percent of the amount determined under subparagraph (C), over the aggregate amount of all prior required installments for the taxable year. This paragraph shall apply only if the base period percentage for any 6 consecutive months of the taxable year equals or exceeds 70 percent. The amount determined under this subparagraph for any installment shall be determined in the following manner— take the taxable income for all months during the taxable year preceding the filing month, divide such amount by the base period percentage for all months during the taxable year preceding the filing month, determine the tax on the amount determined under clause (ii), and multiply the tax computed under clause (iii) by the base period percentage for the filing month and all months during the taxable year preceding the filing month. For purposes of this paragraph— The base period percentage for any period of months shall be the average percent which the taxable income for the corresponding months in each of the 3 preceding taxable years bears to the taxable income for the 3 preceding taxable years. The term “filing month” means the month in which the installment is required to be paid. The Secretary may by regulations provide for the determination of the base period percentage in the case of reorganizations, new corporations, and other similar circumstances. Any amounts required to be included in gross income under section 951(a) (and credits properly allocable thereto) shall be taken into account in computing any annualized income installment under paragraph (2) in a manner similar to the manner under which partnership income inclusions (and credits properly allocable thereto) are taken into account. If a taxpayer elects to have this subparagraph apply for any taxable year— subparagraph (A) shall not apply, and for purposes of computing any annualized income installment for such taxable year, the taxpayer shall be treated as having received ratably during such taxable year items of income and credit described in subparagraph (A) in an amount equal to 115 percent of the amount of such items shown on the return of the taxpayer for the preceding taxable year (the second preceding taxable year in the case of the first and second required installments for such taxable year). If a taxpayer making the election under clause (i) is a noncontrolling shareholder of a corporation, clause (i)(II) shall be applied with respect to items of such corporation by substituting “100 percent” for “115 percent”. For purposes of subclause (I), the term “noncontrolling shareholder” means, with respect to any corporation, a shareholder which (as of the beginning of the taxable year for which the installment is being made) does not own (within the meaning of section 958(a)), and is not treated as owning (within the meaning of section 958(b)), more than 50 percent (by vote or value) of the stock in the corporation. Any dividend received from a closely held real estate investment trust by any person which owns (after application of subsection (d)(5) of section 856) 10 percent or more (by vote or value) of the stock or beneficial interests in the trust shall be taken into account in computing annualized income installments under paragraph (2) in a manner similar to the manner under which partnership income inclusions are taken into account. For purposes of subparagraph (A), the term “closely held real estate investment trust” means a real estate investment trust with respect to which 5 or fewer persons own (after application of subsection (d)(5) of section 856) 50 percent or more (by vote or value) of the stock or beneficial interests in the trust.

(f) Exception where tax is small amount No addition to tax shall be imposed under subsection (a) for any taxable year if the tax shown on the return for such taxable year (or, if no return is filed, the tax) is less than $500.

(g) Definitions and special rules For purposes of this section, the term “tax” means the excess of— the sum of— the tax imposed by section 11 or subchapter L of chapter 1, whichever applies, the tax imposed by section 55, the tax imposed by section 59A, plus the tax imposed by section 887, over the credits against tax provided by part IV of subchapter A of chapter 1. For purposes of the preceding sentence, in the case of a foreign corporation subject to taxation under section 11 or 1201(a), or under subchapter L of chapter 1, the tax imposed by section 881 shall be treated as a tax imposed by section 11. For purposes of this section, the term “large corporation” means any corporation if such corporation (or any predecessor corporation) had taxable income of $1, 000, 000 or m ore f or an y t a x ab l eye a r d u r in g t h e t es t in g p er i o d . F or p u r p oseso f s u b p a r a g r a p h (A), t h e t er m “ t es t in g p er i o d ” m e an s t h e 3 t a x ab l eye a rs imm e d ia t e l y p rece d in g t h e t a x ab l eye a r in v o l v e d . F or p u r p oseso f a ppl y in g s u b p a r a g r a p h (A) t o an y t a x ab l eye a r in t h e t es t in g p er i o d w i t h res p ec tt ocor p or a t i o n s w hi c ha reco m p o n e n t m e mb erso f a co n t ro ll e d g ro u p o f cor p or a t i o n s f ors u c h t a x ab l eye a r, t h e$ 1,000,000 amount specified in subparagraph (A) shall be divided among such members under rules similar to the rules of section 1561. For purposes of subparagraph (A), taxable income shall be determined without regard to any amount carried to the taxable year under section 172 or 1212(a). For purposes of this section— Any organization subject to the tax imposed by section 511, and any private foundation, shall be treated as a corporation subject to tax under section 11. Any tax imposed by section 511, and any tax imposed by section 1 or 4940 on a private foundation, shall be treated as a tax imposed by section 11. Any reference to taxable income shall be treated as including a reference to unrelated business taxable income or net investment income (as the case may be). In the case of any organization described in subparagraph (A), subsection (b)(2)(A) shall be applied by substituting “5th month” for “4th month”, subsection (e)(2)(A) shall be applied by substituting “2 months” for “3 months” in clause (i)(I), the election under clause (i) of subsection (e)(2)(C) may be made separately for each installment, and clause (ii) of subsection (e)(2)(C) shall not apply. In the case of a private foundation, subsection (c)(2) shall be applied by substituting “May 15” for “April 15”. In the case of an S corporation, for purposes of this section— The following taxes shall be treated as imposed by section 11: The tax imposed by section 1374(a). The tax imposed by section 1375(a). Any tax for which the S corporation is liable by reason of section 1371(d)(2). Paragraph (2) of subsection (d) shall not apply. Clause (ii) of subsection (d)(1)(B) shall be applied as if it read as follows: the sum of— the amount determined under clause (i) by only taking into account the taxes referred to in clauses (i) and (iii) of subsection (g)(4)(A), and 100 percent of the tax imposed by section 1375(a) which was shown on the return of the corporation for the preceding taxable year.” The requirement in the last sentence of subsection (d)(1)(B) that the return for the preceding taxable year show a liability for tax shall not apply. Subsection (b)(2)(A) shall be applied by substituting “3rd month” for “4th month”. Any reference in subsection (e) to taxable income shall be treated as including a reference to the net recognized built-in gain or the excess passive income (as the case may be).

(h) Excessive adjustment under section 6425 If the amount of an adjustment under section 6425 made before the 15th day of the 4th month following the close of the taxable year is excessive, there shall be added to the tax under chapter 1 for the taxable year an amount determined at the underpayment rate established under section 6621 upon the excessive amount from the date on which the credit is allowed or the refund is paid to such 15th day. For purposes of paragraph (1), the excessive amount is equal to the amount of the adjustment or (if smaller) the amount by which— the income tax liability (as defined in section 6425(c)) for the taxable year as shown on the return for the taxable year, exceeds the estimated income tax paid during the taxable year, reduced by the amount of the adjustment.

(i) Fiscal years and short years In applying this section to a taxable year beginning on any date other than January 1, there shall be substituted, for the months specified in this section, the months which correspond thereto. This section shall be applied to taxable years of less than 12 months in accordance with regulations prescribed by the Secretary.

(j) Regulations The Secretary shall prescribe such regulations as may be necessary to carry out the purposes of this section.

“If— a corporation made underpayments of estimated tax for a taxable year of the corporation which includes August 1, 1975 , because the corporation intended to elect to have the provisions of subparagraph (B) of section 46(a)(1) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as it existed before the date of enactment of this Act [ Oct. 4, 1976 ]) apply for such taxable year, and the corporation does not elect to have the provisions of such subparagraph apply for such taxable year because this Act does not contain the amendments made by section 804(a)(2) (relating to flowthrough of investment credit), or the provisions of subsection (f) of such section (relating to grace period for certain plan transfers), of the bill H.R. 10612 (94th Congress, 2d Session), as amended by the Senate, then the provisions of section 6655 of such Code (relating to failure by corporation to pay estimated income tax) shall not apply to so much of any such underpayment as the corporation can establish, to the satisfaction of the Secretary of the Treasury, is properly attributable to the inapplicability of such subparagraph (B) for such taxable year.”

§ 6656 Failure to make deposit of taxes

(a) Underpayment of deposits In the case of any failure by any person to deposit (as required by this title or by regulations of the Secretary under this title) on the date prescribed therefor any amount of tax imposed by this title in such government depository as is authorized under section 6302(c) to receive such deposit, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be imposed upon such person a penalty equal to the applicable percentage of the amount of the underpayment.

(b) Definitions For purposes of subsection (a)— Except as provided in subparagraph (B), the term “applicable percentage” means— 2 percent if the failure is for not more than 5 days, 5 percent if the failure is for more than 5 days but not more than 15 days, and 10 percent if the failure is for more than 15 days. In any case where the tax is not deposited on or before the earlier of— the day 10 days after the date of the first delinquency notice to the taxpayer under section 6303, or the day on which notice and demand for immediate payment is given under section 6861 or 6862 or the last sentence of section 6331(a), the applicable percentage shall be 15 percent. The term “underpayment” means the excess of the amount of the tax required to be deposited over the amount, if any, thereof deposited on or before the date prescribed therefor.

(c) Exception for first-time depositors of employment taxes The Secretary may waive the penalty imposed by subsection (a) on a person’s inadvertent failure to deposit any employment tax if— such person meets the requirements referred to in section 7430(c)(4)(A)(ii), such failure— occurs during the first quarter that such person was required to deposit any employment tax; or if such person is required to change the frequency of deposits of any employment tax, relates to the first deposit to which such change applies, and the return of such tax was filed on or before the due date. For purposes of this subsection, the term “employment taxes” means the taxes imposed by subtitle C.

(d) Authority to abate penalty where deposit sent to Secretary The Secretary may abate the penalty imposed by subsection (a) with respect to the first time a depositor is required to make a deposit if the amount required to be deposited is inadvertently sent to the Secretary instead of to the appropriate government depository.

(e) Designation of periods to which deposits apply A deposit made under this section shall be applied to the most recent period or periods within the specified tax period to which the deposit relates, unless the person making such deposit designates a different period or periods to which such deposit is to be applied. A person may make a designation under paragraph (1) only during the 90-day period beginning on the date of a notice that a penalty under subsection (a) has been imposed for the specified tax period to which the deposit relates.

§ 6657 Bad checks

If any instrument in payment, by any commercially acceptable means, of any amount receivable under this title is not duly paid, in addition to any other penalties provided by law, there shall be paid as a penalty by the person who tendered such instrument, upon notice and demand by the Secretary, in the same manner as tax, an amount equal to 2 percent of the amount of such instrument, except that if the amount of such instrument is less than $1, 250, t h e p e na lt y u n d er t hi ssec t i o n s ha ll b e$ 25 or the amount of such instrument, whichever is the lesser. This section shall not apply if the person tendered such instrument in good faith and with reasonable cause to believe that it would be duly paid. ( Aug. 16, 1954, ch. 736 , 68A Stat. 826 ; Pub. L. 94–455, title XIX, § 1906(b)(13)(A) , Oct. 4, 1976 , 90 Stat. 1834 ; Pub. L. 100–647, title V, § 5071(a) , Nov. 10, 1988 , 102 Stat. 3681 ; Pub. L. 110–28, title VIII, § 8245(a) , May 25, 2007 , 121 Stat. 200 ; Pub. L. 111–198, § 3(a) , July 2, 2010 , 124 Stat. 1356 .)

§ 6658 Coordination with title 11

(a) Certain failures to pay tax No addition to the tax shall be made under section 6651, 6654, or 6655 for failure to make timely payment of tax with respect to a period during which a case is pending under title 11 of the United States Code— if such tax was incurred by the estate and the failure occurred pursuant to an order of the court finding probable insufficiency of funds of the estate to pay administrative expenses, or if— such tax was incurred by the debtor before the earlier of the order for relief or (in the involuntary case) the appointment of a trustee, and the petition was filed before the due date prescribed by law (including extensions) for filing a return of such tax, or the date for making the addition to the tax occurs on or after the day on which the petition was filed.

(b) Exception for collected taxes Subsection (a) shall not apply to any liability for an addition to the tax which arises from the failure to pay or deposit a tax withheld or collected from others and required to be paid to the United States.

§ 6659 Improper claim for Trump account contribution pilot program credit

(a) In general In the case of any individual who makes an election under section 6434 with respect to an individual who is not an eligible child of the taxpayer— if such election was made due to negligence or disregard of the rules or regulations, there shall be imposed a penalty of $500, or i f s u c h e l ec t i o n w a s ma d e d u e t o f r a u d, t h eres ha ll b e im p ose d a p e na lt yo f$ 1,000.

(b) Definitions The term “eligible child” has the meaning given such term under section 6434. The terms “negligence” and “disregard” have the same meaning as when such terms are used in section 6662.

[§§ 6659A to 6661 Repealed. Pub. L. 101–239, title VII, § 7721(c)(2), Dec. 19, 1989, 103 Stat. 2399]

(a) Imposition of penalty If this section applies to any portion of an underpayment of tax required to be shown on a return, there shall be added to the tax an amount equal to 20 percent of the portion of the underpayment to which this section applies.

(b) Portion of underpayment to which section applies This section shall apply to the portion of any underpayment which is attributable to 1 or more of the following: Negligence or disregard of rules or regulations. Any substantial understatement of income tax. Any substantial valuation misstatement under chapter 1. Any substantial overstatement of pension liabilities. Any substantial estate or gift tax valuation understatement. Any disallowance of claimed tax benefits by reason of a transaction lacking economic substance (within the meaning of section 7701( o )) or failing to meet the requirements of any similar rule of law. Any undisclosed foreign financial asset understatement. Any inconsistent estate basis. Any overstatement of the deduction provided in section 170(p). Any disallowance of a deduction by reason of section 170(h)(7). This section shall not apply to any portion of an underpayment on which a penalty is imposed under section 6663. Except as provided in paragraph (1) or (2)(B) of section 6662A(e), this section shall not apply to the portion of any underpayment which is attributable to a reportable transaction understatement on which a penalty is imposed under section 6662A.

(c) Negligence For purposes of this section, the term “negligence” includes any failure to make a reasonable attempt to comply with the provisions of this title, and the term “disregard” includes any careless, reckless, or intentional disregard.

(d) Substantial understatement of income tax For purposes of this section, there is a substantial understatement of income tax for any taxable year if the amount of the understatement for the taxable year exceeds the greater of— 10 percent of the tax required to be shown on the return for the taxable year, or $5, 000. I n t h ec a seo f a cor p or a t i o n o t h er t hanan S cor p or a t i o n or a p erso na l h o l d in g co m p an y (a s d e f in e d in sec t i o n 542), t h ere i s a s u b s t an t ia l u n d ers t a t e m e n t o f in co m e t a x f or an y t a x ab l eye a r i f t h e am o u n t o f t h e u n d ers t a t e m e n t f or t h e t a x ab l eye a re x cee d s t h e l essero f —10 p erce n t o f t h e t a x re q u i re d t o b es h o w n o n t h ere t u r n f or t h e t a x ab l eye a r (or, i f g re a t er,$ 10,000), or $10,000,000. In the case of any taxpayer who claims any deduction allowed under section 199A for the taxable year, subparagraph (A) shall be applied by substituting “5 percent” for “10 percent”. For purposes of paragraph (1), the term “understatement” means the excess of— the amount of the tax required to be shown on the return for the taxable year, over the amount of the tax imposed which is shown on the return, reduced by any rebate (within the meaning of section 6211(b)(2)). The excess under the preceding sentence shall be determined without regard to items to which section 6662A applies. The amount of the understatement under subparagraph (A) shall be reduced by that portion of the understatement which is attributable to— the tax treatment of any item by the taxpayer if there is or was substantial authority for such treatment, or any item if— the relevant facts affecting the item’s tax treatment are adequately disclosed in the return or in a statement attached to the return, and there is a reasonable basis for the tax treatment of such item by the taxpayer. For purposes of clause (ii)(II), in no event shall a corporation be treated as having a reasonable basis for its tax treatment of an item attributable to a multiple-party financing transaction if such treatment does not clearly reflect the income of the corporation. Subparagraph (B) shall not apply to any item attributable to a tax shelter. For purposes of clause (i), the term “tax shelter” means— a partnership or other entity, any investment plan or arrangement, or any other plan or arrangement, if a significant purpose of such partnership, entity, plan, or arrangement is the avoidance or evasion of Federal income tax. The Secretary may prescribe a list of positions which the Secretary believes do not meet 1 or more of the standards specified in paragraph (2)(B)(i), section 6664(d)(3), and section 6694(a)(1). Such list (and any revisions thereof) shall be published in the Federal Register or the Internal Revenue Bulletin.

(e) Substantial valuation misstatement under chapter 1 For purposes of this section, there is a substantial valuation misstatement under chapter 1 if— the value of any property (or the adjusted basis of any property) claimed on any return of tax imposed by chapter 1 is 150 percent or more of the amount determined to be the correct amount of such valuation or adjusted basis (as the case may be), or the price for any property or services (or for the use of property) claimed on any such return in connection with any transaction between persons described in section 482 is 200 percent or more (or 50 percent or less) of the amount determined under section 482 to be the correct amount of such price, or the net section 482 transfer price adjustment for the taxable year exceeds the lesser of $5, 000, 000 or 10 p erce n t o f t h e t a x p a yer ’ s g rossrece i pt s . N o p e na lt ys ha ll b e im p ose d b yre a so n o f s u b sec t i o n (b) (3) u n l ess t h e p or t i o n o f t h e u n d er p a y m e n t f or t h e t a x ab l eye a r a tt r ib u t ab l e t os u b s t an t ia l v a l u a t i o nmi ss t a t e m e n t s u n d erc ha pt er 1 e x cee d s$ 5,000 ($10,000 in the case of a corporation other than an S corporation or a personal holding company (as defined in section 542)). For purposes of this subsection— The term “net section 482 transfer price adjustment” means, with respect to any taxable year, the net increase in taxable income for the taxable year (determined without regard to any amount carried to such taxable year from another taxable year) resulting from adjustments under section 482 in the price for any property or services (or for the use of property). For purposes of determining whether the threshold requirements of paragraph (1)(B)(ii) are met, the following shall be excluded: Any portion of the net increase in taxable income referred to in subparagraph (A) which is attributable to any redetermination of a price if— it is established that the taxpayer determined such price in accordance with a specific pricing method set forth in the regulations prescribed under section 482 and that the taxpayer’s use of such method was reasonable, the taxpayer has documentation (which was in existence as of the time of filing the return) which sets forth the determination of such price in accordance with such a method and which establishes that the use of such method was reasonable, and the taxpayer provides such documentation to the Secretary within 30 days of a request for such documentation. Any portion of the net increase in taxable income referred to in subparagraph (A) which is attributable to a redetermination of price where such price was not determined in accordance with such a specific pricing method if— the taxpayer establishes that none of such pricing methods was likely to result in a price that would clearly reflect income, the taxpayer used another pricing method to determine such price, and such other pricing method was likely to result in a price that would clearly reflect income, the taxpayer has documentation (which was in existence as of the time of filing the return) which sets forth the determination of such price in accordance with such other method and which establishes that the requirements of subclause (I) were satisfied, and the taxpayer provides such documentation to the Secretary within 30 days of request for such documentation. Any portion of such net increase which is attributable to any transaction solely between foreign corporations unless, in the case of any such corporations, the treatment of such transaction affects the determination of income from sources within the United States or taxable income effectively connected with the conduct of a trade or business within the United States. If the regular tax (as defined in section 55(c)) imposed by chapter 1 on the taxpayer is determined by reference to an amount other than taxable income, such amount shall be treated as the taxable income of such taxpayer for purposes of this paragraph. For purposes of section 6664(c) the taxpayer shall not be treated as having reasonable cause for any portion of an underpayment attributable to a net section 482 transfer price adjustment unless such taxpayer meets the requirements of clause (i), (ii), or (iii) of subparagraph (B) with respect to such portion.

(f) Substantial overstatement of pension liabilities For purposes of this section, there is a substantial overstatement of pension liabilities if the actuarial determination of the liabilities taken into account for purposes of computing the deduction under paragraph (1) or (2) of section 404(a) is 200 percent or more of the amount determined to be the correct amount of such liabilities. No penalty shall be imposed by reason of subsection (b)(4) unless the portion of the underpayment for the taxable year attributable to substantial overstatements of pension liabilities exceeds $1,000.

(g) Substantial estate or gift tax valuation understatement For purposes of this section, there is a substantial estate or gift tax valuation understatement if the value of any property claimed on any return of tax imposed by subtitle B is 65 percent or less of the amount determined to be the correct amount of such valuation. No penalty shall be imposed by reason of subsection (b)(5) unless the portion of the underpayment attributable to substantial estate or gift tax valuation understatements for the taxable period (or, in the case of the tax imposed by chapter 11, with respect to the estate of the decedent) exceeds $5,000.

(h) Increase in penalty in case of gross valuation misstatements To the extent that a portion of the underpayment to which this section applies is attributable to one or more gross valuation misstatements, subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”. The term “gross valuation misstatements” means— any substantial valuation misstatement under chapter 1 as determined under subsection (e) by substituting— in paragraph (1)(A), “200 percent” for “150 percent”, in paragraph (1)(B)(i)— “400 percent” for “200 percent”, and “25 percent” for “50 percent”, and in paragraph (1)(B)(ii)— “ $20, 000, 000” f or “$ 5,000,000”, and “20 percent” for “10 percent”. any substantial overstatement of pension liabilities as determined under subsection (f) by substituting “400 percent” for “200 percent”, any substantial estate or gift tax valuation understatement as determined under subsection (g) by substituting “40 percent” for “65 percent”, and any disallowance of a deduction described in subsection (b)(10).

(i) Increase in penalty in case of nondisclosed noneconomic substance transactions In the case of any portion of an underpayment which is attributable to one or more nondisclosed noneconomic substance transactions, subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”. For purposes of this subsection, the term “nondisclosed noneconomic substance transaction” means any portion of a transaction described in subsection (b)(6) with respect to which the relevant facts affecting the tax treatment are not adequately disclosed in the return nor in a statement attached to the return. In no event shall any amendment or supplement to a return of tax be taken into account for purposes of this subsection if the amendment or supplement is filed after the earlier of the date the taxpayer is first contacted by the Secretary regarding the examination of the return or such other date as is specified by the Secretary.

(j) Undisclosed foreign financial asset understatement For purposes of this section, the term “undisclosed foreign financial asset understatement” means, for any taxable year, the portion of the understatement for such taxable year which is attributable to any transaction involving an undisclosed foreign financial asset. For purposes of this subsection, the term “undisclosed foreign financial asset” means, with respect to any taxable year, any asset with respect to which information was required to be provided under section 6038, 6038B, 6038D, 6046A, or 6048 for such taxable year but was not provided by the taxpayer as required under the provisions of those sections. In the case of any portion of an underpayment which is attributable to any undisclosed foreign financial asset understatement, subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”.

(k) Inconsistent estate basis reporting For purposes of this section, the term “inconsistent estate basis” means any portion of an underpayment attributable to the failure to comply with section 1014(f).

(l) Increase in penalty in case of overstatement of qualified charitable contributions In the case of any portion of an underpayment which is attributable to one or more overstatements of the deduction provided in section 170(p), subsection (a) shall be applied with respect to such portion by substituting “50 percent” for “20 percent”.

(m) Substantial understatement of income tax due to disallowance of applicable energy credits In the case of a taxpayer for which there is a disallowance of an applicable energy credit for any taxable year, for purposes of determining whether there is a substantial understatement of income tax for such taxable year, subsection (d)(1) shall be applied— in subparagraphs (A) and (B), by substituting “1 percent” for “10 percent” each place it appears, and without regard to subparagraph (C). For purposes of this subsection, the term “disallowance of an applicable energy credit” means the disallowance of a credit under section 45X, 45Y, or 48E by reason of overstating the material assistance cost ratio (as determined under section 7701(a)(52)) with respect to any qualified facility, energy storage technology, or facility which produces eligible components.

(a) Imposition of penalty If a taxpayer has a reportable transaction understatement for any taxable year, there shall be added to the tax an amount equal to 20 percent of the amount of such understatement.

(b) Reportable transaction understatement For purposes of this section— The term “reportable transaction understatement” means the sum of— the product of— the amount of the increase (if any) in taxable income which results from a difference between the proper tax treatment of an item to which this section applies and the taxpayer’s treatment of such item (as shown on the taxpayer’s return of tax), and the highest rate of tax imposed by section 1 (section 11 in the case of a taxpayer which is a corporation), and the amount of the decrease (if any) in the aggregate amount of credits determined under subtitle A which results from a difference between the taxpayer’s treatment of an item to which this section applies (as shown on the taxpayer’s return of tax) and the proper tax treatment of such item. For purposes of subparagraph (A), any reduction of the excess of deductions allowed for the taxable year over gross income for such year, and any reduction in the amount of capital losses which would (without regard to section 1211) be allowed for such year, shall be treated as an increase in taxable income. This section shall apply to any item which is attributable to— any listed transaction, and any reportable transaction (other than a listed transaction) if a significant purpose of such transaction is the avoidance or evasion of Federal income tax.

(c) Higher penalty for nondisclosed listed and other avoidance transactions Subsection (a) shall be applied by substituting “30 percent” for “20 percent” with respect to the portion of any reportable transaction understatement with respect to which the requirement of section 6664(d)(3)(A) is not met.

(d) Definitions of reportable and listed transactions For purposes of this section, the terms “reportable transaction” and “listed transaction” have the respective meanings given to such terms by section 6707A(c).

(e) Special rules In the case of an understatement (as defined in section 6662(d)(2))— the amount of such understatement (determined without regard to this paragraph) shall be increased by the aggregate amount of reportable transaction understatements for purposes of determining whether such understatement is a substantial understatement under section 6662(d)(1), and the addition to tax under section 6662(a) shall apply only to the excess of the amount of the substantial understatement (if any) after the application of subparagraph (A) over the aggregate amount of reportable transaction understatements. This section shall not apply to any portion of an understatement on which a penalty is imposed under section 6663. This section shall not apply to any portion of an understatement on which a penalty is imposed under section 6662 if the rate of the penalty is determined under subsections (h) or (i) of section 6662. Except as provided in regulations, in no event shall any tax treatment included with an amendment or supplement to a return of tax be taken into account in determining the amount of any reportable transaction understatement if the amendment or supplement is filed after the earlier of the date the taxpayer is first contacted by the Secretary regarding the examination of the return or such other date as is specified by the Secretary.

§ 6663 Imposition of fraud penalty

(a) Imposition of penalty If any part of any underpayment of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 75 percent of the portion of the underpayment which is attributable to fraud.

(b) Determination of portion attributable to fraud If the Secretary establishes that any portion of an underpayment is attributable to fraud, the entire underpayment shall be treated as attributable to fraud, except with respect to any portion of the underpayment which the taxpayer establishes (by a preponderance of the evidence) is not attributable to fraud.

(c) Special rule for joint returns In the case of a joint return, this section shall not apply with respect to a spouse unless some part of the underpayment is due to the fraud of such spouse.

§ 6664 Definitions and special rules

(a) Underpayment For purposes of this part, the term “underpayment” means the amount by which any tax imposed by this title exceeds the excess of— the sum of— the amount shown as the tax by the taxpayer on his return, plus amounts not so shown previously assessed (or collected without assessment), over the amount of rebates made. For purposes of paragraph (2), the term “rebate” means so much of an abatement, credit, refund, or other repayment, as was made on the ground that the tax imposed was less than the excess of the amount specified in paragraph (1) over the rebates previously made. A rule similar to the rule of section 6211(b)(4) shall apply for purposes of this subsection.

(b) Penalties applicable only where return filed The penalties provided in this part shall apply only in cases where a return of tax is filed (other than a return prepared by the Secretary under the authority of section 6020(b)).

(c) Reasonable cause exception for underpayments No penalty shall be imposed under section 6662 or 6663 with respect to any portion of an underpayment if it is shown that there was a reasonable cause for such portion and that the taxpayer acted in good faith with respect to such portion. Paragraph (1) shall not apply to any portion of an underpayment which is attributable to one or more transactions described in section 6662(b)(6) or to any disallowance of a deduction described in section 6662(b)(10). In the case of any underpayment attributable to a substantial or gross valuation overstatement under chapter 1 with respect to charitable deduction property, paragraph (1) shall not apply. The preceding sentence shall not apply to a substantial valuation overstatement under chapter 1 if— the claimed value of the property was based on a qualified appraisal made by a qualified appraiser, and in addition to obtaining such appraisal, the taxpayer made a good faith investigation of the value of the contributed property. For purposes of this subsection— The term “charitable deduction property” means any property contributed by the taxpayer in a contribution for which a deduction was claimed under section 170. For purposes of paragraph (3), such term shall not include any securities for which (as of the date of the contribution) market quotations are readily available on an established securities market. The term “qualified appraisal” has the meaning given such term by section 170(f)(11)(E)(i). The term “qualified appraiser” has the meaning given such term by section 170(f)(11)(E)(ii).

(d) Reasonable cause exception for reportable transaction understatements No penalty shall be imposed under section 6662A with respect to any portion of a reportable transaction understatement if it is shown that there was a reasonable cause for such portion and that the taxpayer acted in good faith with respect to such portion. Paragraph (1) shall not apply to any portion of a reportable transaction understatement which is attributable to one or more transactions described in section 6662(b)(6). Paragraph (1) shall not apply to any reportable transaction understatement unless— the relevant facts affecting the tax treatment of the item are adequately disclosed in accordance with the regulations prescribed under section 6011, there is or was substantial authority for such treatment, and the taxpayer reasonably believed that such treatment was more likely than not the proper treatment. A taxpayer failing to adequately disclose in accordance with section 6011 shall be treated as meeting the requirements of subparagraph (A) if the penalty for such failure was rescinded under section 6707A(d). For purposes of paragraph (3)(C)— A taxpayer shall be treated as having a reasonable belief with respect to the tax treatment of an item only if such belief— is based on the facts and law that exist at the time the return of tax which includes such tax treatment is filed, and relates solely to the taxpayer’s chances of success on the merits of such treatment and does not take into account the possibility that a return will not be audited, such treatment will not be raised on audit, or such treatment will be resolved through settlement if it is raised. An opinion of a tax advisor may not be relied upon to establish the reasonable belief of a taxpayer if— the tax advisor is described in clause (ii), or the opinion is described in clause (iii). A tax advisor is described in this clause if the tax advisor— is a material advisor (within the meaning of section 6111(b)(1)) and participates in the organization, management, promotion, or sale of the transaction or is related (within the meaning of section 267(b) or 707(b)(1)) to any person who so participates, is compensated directly or indirectly by a material advisor with respect to the transaction, has a fee arrangement with respect to the transaction which is contingent on all or part of the intended tax benefits from the transaction being sustained, or as determined under regulations prescribed by the Secretary, has a disqualifying financial interest with respect to the transaction. For purposes of clause (i), an opinion is disqualified if the opinion— is based on unreasonable factual or legal assumptions (including assumptions as to future events), unreasonably relies on representations, statements, findings, or agreements of the taxpayer or any other person, does not identify and consider all relevant facts, or fails to meet any other requirement as the Secretary may prescribe.

§ 6665 Applicable rules

(a) Additions treated as tax Except as otherwise provided in this title— the additions to the tax, additional amounts, and penalties provided by this chapter shall be paid upon notice and demand and shall be assessed, collected, and paid in the same manner as taxes; and any reference in this title to “tax” imposed by this title shall be deemed also to refer to the additions to the tax, additional amounts, and penalties provided by this chapter.

(b) Procedure for assessing certain additions to tax For purposes of subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes), subsection (a) shall not apply to any addition to tax under section 6651, 6654, or 6655; except that it shall apply— in the case of an addition described in section 6651, to that portion of such addition which is attributable to a deficiency in tax described in section 6211; or to an addition described in section 6654 or 6655, if no return is filed for the taxable year.

§ 6671 Rules for application of assessable penalties

(a) Penalty assessed as tax The penalties and liabilities provided by this subchapter shall be paid upon notice and demand by the Secretary, and shall be assessed and collected in the same manner as taxes. Except as otherwise provided, any reference in this title to “tax” imposed by this title shall be deemed also to refer to the penalties and liabilities provided by this subchapter.

(b) Person defined The term “person”, as used in this subchapter, includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.

§ 6672 Failure to collect and pay over tax, or attempt to evade or defeat tax

(a) General rule Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under section 6653 or part II of subchapter A of chapter 68 for any offense to which this section is applicable.

(b) Preliminary notice requirement No penalty shall be imposed under subsection (a) unless the Secretary notifies the taxpayer in writing by mail to an address as determined under section 6212(b) or in person that the taxpayer shall be subject to an assessment of such penalty. The mailing of the notice described in paragraph (1) (or, in the case of such a notice delivered in person, such delivery) shall precede any notice and demand of any penalty under subsection (a) by at least 60 days. If a notice described in paragraph (1) with respect to any penalty is mailed or delivered in person before the expiration of the period provided by section 6501 for the assessment of such penalty (determined without regard to this paragraph), the period provided by such section for the assessment of such penalty shall not expire before the later of— the date 90 days after the date on which such notice was mailed or delivered in person, or if there is a timely protest of the proposed assessment, the date 30 days after the Secretary makes a final administrative determination with respect to such protest. This subsection shall not apply if the Secretary finds that the collection of the penalty is in jeopardy.

(c) Extension of period of collection where bond is filed If, within 30 days after the day on which notice and demand of any penalty under subsection (a) is made against any person, such person— pays an amount which is not less than the minimum amount required to commence a proceeding in court with respect to his liability for such penalty, files a claim for refund of the amount so paid, and furnishes a bond which meets the requirements of paragraph (3), no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421(a), the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court. Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of such penalty in a proceeding begun as provided in paragraph (2). If, within 30 days after the day on which his claim for refund with respect to any penalty under subsection (a) is denied, the person described in paragraph (1) fails to begin a proceeding in the appropriate United States district court (or in the Court of Federal Claims) for the determination of his liability for such penalty, paragraph (1) shall cease to apply with respect to such penalty, effective on the day following the close of the 30-day period referred to in this paragraph. The bond referred to in paragraph (1) shall be in such form and with such sureties as the Secretary may by regulations prescribe and shall be in an amount equal to 1½ times the amount of excess of the penalty assessed over the payment described in paragraph (1). The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court in respect of any penalty described in paragraph (1) shall be suspended for the period during which the Secretary is prohibited from collecting by levy or a proceeding in court. If the Secretary makes a finding that the collection of the penalty is in jeopardy, nothing in this subsection shall prevent the immediate collection of such penalty.

(d) Right of contribution where more than 1 person liable for penalty If more than 1 person is liable for the penalty under subsection (a) with respect to any tax, each person who paid such penalty shall be entitled to recover from other persons who are liable for such penalty an amount equal to the excess of the amount paid by such person over such person’s proportionate share of the penalty. Any claim for such a recovery may be made only in a proceeding which is separate from, and is not joined or consolidated with— an action for collection of such penalty brought by the United States, or a proceeding in which the United States files a counterclaim or third-party complaint for the collection of such penalty.

(e) Exception for voluntary board members of tax-exempt organizations No penalty shall be imposed by subsection (a) on any unpaid, volunteer member of any board of trustees or directors of an organization exempt from tax under subtitle A if such member— is solely serving in an honorary capacity, does not participate in the day-to-day or financial operations of the organization, and does not have actual knowledge of the failure on which such penalty is imposed. The preceding sentence shall not apply if it results in no person being liable for the penalty imposed by subsection (a).

§ 6673 Sanctions and costs awarded by courts

(a) Tax court proceedings Whenever it appears to the Tax Court that— proceedings before it have been instituted or maintained by the taxpayer primarily for delay, the taxpayer’s position in such proceeding is frivolous or groundless, or the taxpayer unreasonably failed to pursue available administrative remedies, the Tax Court, in its decision, may require the taxpayer to pay to the United States a penalty not in excess of $25,000. Whenever it appears to the Tax Court that any attorney or other person admitted to practice before the Tax Court has multiplied the proceedings in any case unreasonably and vexatiously, the Tax Court may require— that such attorney or other person pay personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct, or if such attorney is appearing on behalf of the Commissioner of Internal Revenue, that the United States pay such excess costs, expenses, and attorneys’ fees in the same manner as such an award by a district court.

(b) Proceedings in other courts Whenever it appears to the court that the taxpayer’s position in the proceedings before the court instituted or maintained by such taxpayer under section 7433 is frivolous or groundless, the court may require the taxpayer to pay to the United States a penalty not in excess of $10,000. In any civil proceeding before any court (other than the Tax Court) which is brought by or against the United States in connection with the determination, collection, or refund of any tax, interest, or penalty under this title, any monetary sanctions, penalties, or costs awarded by the court to the United States may be assessed by the Secretary and, upon notice and demand, may be collected in the same manner as a tax. In connection with any appeal from a proceeding in the Tax Court or a civil proceeding described in paragraph (2), an order of a United States Court of Appeals or the Supreme Court awarding monetary sanctions, penalties or court costs to the United States may be registered in a district court upon filing a certified copy of such order and shall be enforceable as other district court judgments. Any such sanctions, penalties, or costs may be assessed by the Secretary and, upon notice and demand, may be collected in the same manner as a tax.

§ 6674 Fraudulent statement or failure to furnish statement to employee

In addition to the criminal penalty provided by section 7204, any person required under the provisions of section 6051 or 6053(b) to furnish a statement to an employee who willfully furnishes a false or fraudulent statement, or who willfully fails to furnish a statement in the manner, at the time, and showing the information required under section 6051 or 6053(b), or regulations prescribed thereunder, shall for each such failure be subject to a penalty under this subchapter of $50, which shall be assessed and collected in the same manner as the tax on employers imposed by section 3111. ( Aug. 16, 1954, ch. 736 , 68A Stat. 828 ; Pub. L. 89–97, title III, § 313(e)(2)(C) , July 30, 1965 , 79 Stat. 385 .)

§ 6675 Excessive claims with respect to the use of certain fuels

(a) Civil penalty In addition to any criminal penalty provided by law, if a claim is made under section 6416(a)(4) (relating to certain sales of gasoline), section 6420 (relating to gasoline used on farms), 6421 (relating to gasoline used for certain nonhighway purposes or by local transit systems), 6427 (relating to fuels not used for taxable purposes), or 6435 (relating to eligible indelibly dyed fuel) for an excessive amount, unless it is shown that the claim for such excessive amount is due to reasonable cause, the person making such claim shall be liable to a penalty in an amount equal to whichever of the following is the greater: Two times the excessive amount; or $10.

(b) Excessive amount defined For purposes of this section, the term “excessive amount” means in the case of any person the amount by which— the amount claimed under section 6416(a)(4), 6420, 6421, 6427, or 6435, as the case may be, for any period, exceeds the amount allowable under such section for such period.

(c) Assessment and collection of penalty For assessment and collection of penalty provided by subsection (a), see section 6206.

§ 6676 Erroneous claim for refund or credit

(a) Civil penalty If a claim for refund or credit with respect to income or employment tax is made for an excessive amount, unless it is shown that the claim for such excessive amount is due to reasonable cause, the person making such claim shall be liable for a penalty in an amount equal to 20 percent of the excessive amount.

(b) Excessive amount For purposes of this section, the term “excessive amount” means in the case of any person the amount by which the amount of the claim for refund or credit for any taxable year exceeds the amount of such claim allowable under this title for such taxable year.

(c) Noneconomic substance transactions treated as lacking reasonable cause For purposes of this section, any excessive amount which is attributable to any transaction described in section 6662(b)(6) shall not be treated as due to reasonable cause.

(d) Coordination with other penalties This section shall not apply to any portion of the excessive amount of a claim for refund or credit which is subject to a penalty imposed under part II of subchapter A of chapter 68.

§ 6677 Failure to file information with respect to certain foreign trusts

(a) Civil penalty In addition to any criminal penalty provided by law, if any notice or return required to be filed by section 6048— is not filed on or before the time provided in such section, or does not include all the information required pursuant to such section or includes incorrect information, the person required to file such notice or return shall pay a penalty equal to the greater of $10, 000 or 35 p erce n t o f t h e g rossre p or t ab l e am o u n t . I f an y f ai l u re d escr ib e d in t h e p rece d in g se n t e n ceco n t in u es f or m ore t han 90 d a ys a f t er t h e d a yo n w hi c h t h e S ecre t a ry mai l s n o t i ceo f s u c h f ai l u re t o t h e p erso n re q u i re d t o p a ys u c h p e na lt y, s u c h p erso n s ha llp a y a p e na lt y (ina dd i t i o n t o t h e am o u n t d e t er min e d u n d er t h e p rece d in g se n t e n ce) o f$ 10,000 for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. At such time as the gross reportable amount with respect to any failure can be determined by the Secretary, any subsequent penalty imposed under this subsection with respect to such failure shall be reduced as necessary to assure that the aggregate amount of such penalties do not exceed the gross reportable amount (and to the extent that such aggregate amount already exceeds the gross reportable amount the Secretary shall refund such excess to the taxpayer).

(b) Special rules for returns under section 6048(b) In the case of a return required under section 6048(b)— the United States person referred to in such section shall be liable for the penalty imposed by subsection (a), and subsection (a) shall be applied by substituting “5 percent” for “35 percent”.

(c) Gross reportable amount For purposes of subsection (a), the term “gross reportable amount” means— the gross value of the property involved in the event (determined as of the date of the event) in the case of a failure relating to section 6048(a), the gross value of the portion of the trust’s assets at the close of the year treated as owned by the United States person in the case of a failure relating to section 6048(b)(1), and the gross amount of the distributions in the case of a failure relating to section 6048(c).

(d) Reasonable cause exception No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. The fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause.

(e) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).

[§ 6678 Repealed. Pub. L. 99–514, title XV, § 1501(d)(2), Oct. 22, 1986, 100 Stat. 2740]

§ 6679 Failure to file returns, etc., with respect to foreign corporations or foreign partnerships

(a) Civil penalty In addition to any criminal penalty provided by law, any person required to file a return under section 6046 or 6046A who fails to file such return at the time provided in such section, or who files a return which does not show the information required pursuant to such section, shall pay a penalty of $10, 000, u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se . I f an y f ai l u re d escr ib e d in p a r a g r a p h (1) co n t in u es f or m ore t han 90 d a ys a f t er t h e d a yo n w hi c h t h e S ecre t a ry mai l s n o t i ceo f s u c h f ai l u re t o t h e U ni t e d St a t es p erso n, s u c h p erso n s ha llp a y a p e na lt y (ina dd i t i o n t o t h e am o u n t re q u i re d u n d er p a r a g r a p h (1)) o f$ 10,000 for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. The increase in any penalty under this paragraph shall not exceed $50,000.

(b) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedure for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).

[§ 6680 Repealed. Pub. L. 94–455, title XIX, § 1904(b)(10)(A)(vi)(I), Oct. 4, 1976, 90 Stat. 1817]

[§ 6681 Repealed. Pub. L. 94–455, title XIX, § 1904(b)(10)(D)(i), Oct. 4, 1976, 90 Stat. 1817]

§ 6682 False information with respect to withholding

(a) Civil penalty In addition to any criminal penalty provided by law, if— any individual makes a statement under section 3402 or section 3406 which results in a decrease in the amounts deducted and withheld under chapter 24, and as of the time such statement was made, there was no reasonable basis for such statement, such individual shall pay a penalty of $500 for such statement.

(b) Exception The Secretary may waive (in whole or in part) the penalty imposed under subsection (a) if the taxes imposed with respect to the individual under subtitle A for the taxable year are equal to or less than the sum of— the credits against such taxes allowed by part IV of subchapter A of chapter 1, and the payments of estimated tax which are considered payments on account of such taxes.

(c) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect to the assessment or collection of any penalty imposed by subsection (a).

[§ 6683 Repealed. Pub. L. 109–135, title IV, § 403(n)(3)(A), Dec. 21, 2005, 119 Stat. 2626]

§ 6684 Assessable penalties with respect to liability for tax under chapter 42

If any person becomes liable for tax under any section of chapter 42 (relating to private foundations and certain other tax-exempt organizations) by reason of any act or failure to act which is not due to reasonable cause and either— such person has theretofore been liable for tax under such chapter, or such act or failure to act is both willful and flagrant, then such person shall be liable for a penalty equal to the amount of such tax. (Added Pub. L. 91–172, title I, § 101(c) , Dec. 30, 1969 , 83 Stat. 519 ; amended Pub. L. 100–203, title X, § 10712(c)(4) , Dec. 22, 1987 , 101 Stat. 1330–467 .)

§ 6685 Assessable penalty with respect to public inspection requirements for certain tax-exempt organizations

In addition to the penalty imposed by section 7207 (relating to fraudulent returns, statements, or other documents), any person who is required to comply with the requirements of subsection (d) of section 6104 and who fails to so comply with respect to any return or application, if such failure is willful, shall pay a penalty of $5,000 with respect to each such return or application. (Added Pub. L. 91–172, title I, § 101(e)(4) , Dec. 30, 1969 , 83 Stat. 524 ; amended Pub. L. 96–603, § 1(d)(4) , Dec. 28, 1980 , 94 Stat. 3504 ; Pub. L. 100–203, title X, § 10704(b)(1) , Dec. 22, 1987 , 101 Stat. 1330–462 ; Pub. L. 104–168, title XIII, § 1313(b) , July 30, 1996 , 110 Stat. 1480 ; Pub. L. 105–277, div. J, title I, § 1004(b)(2)(D) , Oct. 21, 1998 , 112 Stat. 2681–890 .)

§ 6686 Failure to file returns or supply information by DISC or former FSC

In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax) any person required to supply information or to file a return under section 6011(c) who fails to supply such information or file such return at the time prescribed by the Secretary, or who files a return which does not show the information required, shall pay a penalty of $100 f ore a c h f ai l u re t os u ppl y in f or ma t i o n (b u tt h e t o t a l am o u n t im p ose d o n t h e d e l in q u e n tp erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 25,000) or a penalty of $1,000 for each failure to file a return, unless it is shown that such failure is due to reasonable cause. (Added Pub. L. 92–178, title V, § 504(d) , Dec. 10, 1971 , 85 Stat. 551 ; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A) , Oct. 4, 1976 , 90 Stat. 1834 ; Pub. L. 98–369, div. A, title VIII, § 801(d)(15)(A) , July 18, 1984 , 98 Stat. 997 ; Pub. L. 110–172, § 11(g)(21) , Dec. 29, 2007 , 121 Stat. 2491 .)

[§ 6687 Repealed. Pub. L. 101–239, title VII, § 7711(b)(1), Dec. 19, 1989, 103 Stat. 2393]

§ 6688 Assessable penalties with respect to information required to be furnished under section 7654

In addition to any criminal penalty provided by law, any person described in section 7654(a) who is required under section 937(c) or by regulations prescribed under section 7654 to furnish information and who fails to comply with such requirement at the time prescribed by such regulations unless it is shown that such failure is due to reasonable cause and not to willful neglect, shall pay (upon notice and demand by the Secretary and in the same manner as tax) a penalty of $1,000 for each such failure. (Added Pub. L. 92–606, § 1(c) , Oct. 31, 1972 , 86 Stat. 1496 , § 6687; renumbered § 6688, Pub. L. 93–406, title II, § 1016(b)(4) , Sept. 2, 1974 , 88 Stat. 932 ; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A) , Oct. 4, 1976 , 90 Stat. 1834 ; Pub. L. 108–357, title VIII, § 908(b) , Oct. 22, 2004 , 118 Stat. 1656 .)

§ 6689 Failure to file notice of redetermination of foreign tax

(a) Civil penalty If the taxpayer fails to notify the Secretary (on or before the date prescribed by regulations for giving such notice) of a foreign tax redetermination, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the deficiency attributable to such redetermination an amount (not in excess of 25 percent of the deficiency) determined as follows— 5 percent of the deficiency if the failure is for not more than 1 month, with an additional 5 percent of the deficiency for each month (or fraction thereof) during which the failure continues.

(b) Foreign tax redetermination defined For purposes of this section, the term “foreign tax redetermination” means any redetermination for which a notice is required under subsection (c) of section 905 or paragraph (2) of section 404A(g).

§ 6690 Fraudulent statement or failure to furnish statement to plan participant

Any person required under section 6057(e) to furnish a statement to a participant who willfully furnishes a false or fraudulent statement, or who willfully fails to furnish a statement in the manner, at the time, and showing the information required under section 6057(e), or regulations prescribed thereunder, shall for each such act, or for each such failure, be subject to a penalty under this subchapter of $50, which shall be assessed and collected in the same manner as the tax on employers imposed by section 3111. (Added Pub. L. 93–406, title II, § 1031(b)(2)(A) , Sept. 2, 1974 , 88 Stat. 946 .)

[§ 6691 Reserved]

§ 6692 Failure to file actuarial report

The plan administrator (as defined in section 414(g)) of each defined benefit plan to which section 412 applies who fails to file the report required by section 6059 at the time and in the manner required by section 6059, shall pay a penalty of $1,000 for each such failure unless it is shown that such failure is due to reasonable cause. (Added Pub. L. 93–406, title II, § 1033(b) , Sept. 2, 1974 , 88 Stat. 948 .)

§ 6693 Failure to provide reports on certain tax-favored accounts or annuities; penalties relating to designated nondeductible contributions

(a) Reports If a person required to file a report under a provision referred to in paragraph (2) fails to file such report at the time and in the manner required by such provision, such person shall pay a penalty of $50 for each failure unless it is shown that such failure is due to reasonable cause. The provisions referred to in this paragraph are— subsections (i) and ( l ) of section 408 (relating to individual retirement plans), section 220(h) (relating to Archer MSAs), section 223(h) (relating to health savings accounts), section 529(d) (relating to qualified tuition programs), section 529A(d) (relating to qualified ABLE programs), section 530(h) (relating to Coverdell education savings accounts), and section 530A(i) (relating to Trump accounts). This subsection shall not apply to any report which is an information return described in section 6724(d)(1)(C)(i) or a payee statement described in section 6724(d)(2)(X).

(b) Penalties relating to nondeductible contributions Any individual who— is required to furnish information under section 408( o )(4) as to the amount of designated nondeductible contributions made for any taxable year, and overstates the amount of such contributions made for such taxable year, shall pay a penalty of $100 f ore a c h s u c h o v ers t a t e m e n t u n l ess i t i ss h o w n t ha t s u c h o v ers t a t e m e n t i s d u e t ore a so nab l ec a u se . A n y in d i v i d u a lw h o f ai l s t o f i l e a f or m re q u i re d t o b e f i l e d b y t h e S ecre t a ry u n d ersec t i o n 408 (o) (4) s ha llp a y a p e na lt yo f$ 50 for each such failure unless it is shown that such failure is due to reasonable cause.

(c) Penalties relating to simple retirement accounts An employer who fails to provide 1 or more notices required by section 408( l )(2)(C) shall pay a penalty of $50 f ore a c h d a yo n w hi c h s u c h f ai l u resco n t in u e . A t r u s t eeor i ss u er w h o f ai l s — t o p ro v i d e 1 or m ores t a t e m e n t sre q u i re d b y t h e l a s t se n t e n ceo f sec t i o n 408 (i) s ha llp a y a p e na lt yo f$ 50 for each day on which such failures continue, or to provide 1 or more summary descriptions required by section 408( l )(2)(B) shall pay a penalty of $50 for each day on which such failures continue. No penalty shall be imposed under this subsection with respect to any failure which the taxpayer shows was due to reasonable cause.

(d) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) does not apply to the assessment or collection of any penalty imposed by this section.

§ 6694 Understatement of taxpayer’s liability by tax return preparer

(a) Understatement due to unreasonable positions If a tax return preparer— prepares any return or claim of refund with respect to which any part of an understatement of liability is due to a position described in paragraph (2), and knew (or reasonably should have known) of the position, such tax return preparer shall pay a penalty with respect to each such return or claim in an amount equal to the greater of $1,000 or 50 percent of the income derived (or to be derived) by the tax return preparer with respect to the return or claim. Except as otherwise provided in this paragraph, a position is described in this paragraph unless there is or was substantial authority for the position. If the position was disclosed as provided in section 6662(d)(2)(B)(ii)(I) and is not a position to which subparagraph (C) applies, the position is described in this paragraph unless there is a reasonable basis for the position. If the position is with respect to a tax shelter (as defined in section 6662(d)(2)(C)(ii)) or a reportable transaction to which section 6662A applies, the position is described in this paragraph unless it is reasonable to believe that the position would more likely than not be sustained on its merits. No penalty shall be imposed under this subsection if it is shown that there is reasonable cause for the understatement and the tax return preparer acted in good faith.

(b) Understatement due to willful or reckless conduct Any tax return preparer who prepares any return or claim for refund with respect to which any part of an understatement of liability is due to a conduct described in paragraph (2) shall pay a penalty with respect to each such return or claim in an amount equal to the greater of— $5,000, or 75 percent of the income derived (or to be derived) by the tax return preparer with respect to the return or claim. Conduct described in this paragraph is conduct by the tax return preparer which is— a willful attempt in any manner to understate the liability for tax on the return or claim, or a reckless or intentional disregard of rules or regulations. The amount of any penalty payable by any person by reason of this subsection for any return or claim for refund shall be reduced by the amount of the penalty paid by such person by reason of subsection (a).

(c) Extension of period of collection where preparer pays 15 percent of penalty If, within 30 days after the day on which notice and demand of any penalty under subsection (a) or (b) is made against any person who is a tax return preparer, such person pays an amount which is not less than 15 percent of the amount of such penalty and files a claim for refund of the amount so paid, no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until the final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421(a), the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court. Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of such penalty in a proceeding begun as provided in paragraph (2). If, within 30 days after the day on which his claim for refund of any partial payment of any penalty under subsection (a) or (b) is denied (or, if earlier, within 30 days after the expiration of 6 months after the day on which he filed the claim for refund), the tax return preparer fails to begin a proceeding in the appropriate United States district court for the determination of his liability for such penalty, paragraph (1) shall cease to apply with respect to such penalty, effective on the day following the close of the applicable 30-day period referred to in this paragraph. The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court in respect of any penalty described in paragraph (1) shall be suspended for the period during which the Secretary is prohibited from collecting by levy or a proceeding in court.

(d) Abatement of penalty where taxpayer’s liability not understated If at any time there is a final administrative determination or a final judicial decision that there was no understatement of liability in the case of any return or claim for refund with respect to which a penalty under subsection (a) or (b) has been assessed, such assessment shall be abated, and if any portion of such penalty has been paid the amount so paid shall be refunded to the person who made such payment as an overpayment of tax without regard to any period of limitations which, but for this subsection, would apply to the making of such refund.

(e) Understatement of liability defined For purposes of this section, the term “understatement of liability” means any understatement of the net amount payable with respect to any tax imposed by this title or any overstatement of the net amount creditable or refundable with respect to any such tax. Except as otherwise provided in subsection (d), the determination of whether or not there is an understatement of liability shall be made without regard to any administrative or judicial action involving the taxpayer.

(f) Cross reference For definition of tax return preparer, see section 7701(a)(36).

§ 6695 Other assessable penalties with respect to the preparation of tax returns for other persons

(a) Failure to furnish copy to taxpayer Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with section 6107(a) with respect to such return or claim shall pay a penalty of $50 f ors u c h f ai l u re, u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o t d u e t o w i ll f u l n e g l ec t . T h e ma x im u m p e na lt y im p ose d u n d er t hi ss u b sec t i o n o nan y p erso n w i t h res p ec tt o d oc u m e n t s f i l e dd u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 25,000.

(b) Failure to sign return Any person who is a tax return preparer with respect to any return or claim for refund, who is required by regulations prescribed by the Secretary to sign such return or claim, and who fails to comply with such regulations with respect to such return or claim shall pay a penalty of $50 f ors u c h f ai l u re, u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o t d u e t o w i ll f u l n e g l ec t . T h e ma x im u m p e na lt y im p ose d u n d er t hi ss u b sec t i o n o nan y p erso n w i t h res p ec tt o d oc u m e n t s f i l e dd u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 25,000.

(c) Failure to furnish identifying number Any person who is a tax return preparer with respect to any return or claim for refund and who fails to comply with section 6109(a)(4) with respect to such return or claim shall pay a penalty of $50 f ors u c h f ai l u re, u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o t d u e t o w i ll f u l n e g l ec t . T h e ma x im u m p e na lt y im p ose d u n d er t hi ss u b sec t i o n o nan y p erso n w i t h res p ec tt o d oc u m e n t s f i l e dd u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 25,000.

(d) Failure to retain copy or list Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with section 6107(b) with respect to such return or claim shall pay a penalty of $50 f ore a c h s u c h f ai l u re, u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o t d u e t o w i ll f u l n e g l ec t . T h e ma x im u m p e na lt y im p ose d u n d er t hi ss u b sec t i o n o nan y p erso n w i t h res p ec tt o an yre t u r n p er i o d s ha ll n o t e x cee d$ 25,000.

(e) Failure to file correct information returns Any person required to make a return under section 6060 who fails to comply with the requirements of such section shall pay a penalty of $50 f or — e a c h f ai l u re t o f i l e a re t u r na sre q u i re d u n d ers u c h sec t i o n, an d e a c h f ai l u re t ose t f or t hani t e min t h ere t u r na sre q u i re d u n d ersec t i o n, u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o t d u e t o w i ll f u l n e g l ec t . T h e ma x im u m p e na lt y im p ose d u n d er t hi ss u b sec t i o n o nan y p erso n w i t h res p ec tt o an yre t u r n p er i o d s ha ll n o t e x cee d$ 25,000.

(f) Negotiation of check Any person who is a tax return preparer who endorses or otherwise negotiates (directly or through an agent) any check made in respect of the taxes imposed by this title which is issued to a taxpayer (other than the tax return preparer) shall pay a penalty of $500 with respect to each such check. The preceding sentence shall not apply with respect to the deposit by a bank (within the meaning of section 581) of the full amount of the check in the taxpayer’s account in such bank for the benefit of the taxpayer.

(g) Failure to be diligent in determining eligibility for certain tax benefits Any person who is a tax return preparer with respect to any return or claim for refund who fails to comply with due diligence requirements imposed by the Secretary by regulations with respect to determining— eligibility to file as a head of household (as defined in section 2(b)) on the return, or eligibility for, or the amount of, the credit allowable by section 24, 25A(a)(1), or 32, shall pay a penalty of $500 for each such failure.

(h) Adjustment for inflation In the case of any failure relating to a return or claim for refund filed in a calendar year beginning after 2014, each of the dollar amounts under subsections (a), (b), (c), (d), (e), (f), and (g) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof. If any amount adjusted under paragraph (1)— is not less than $5, 000 an d i s n o t am u lt i pl eo f$ 500, such amount shall be rounded to the next lowest multiple of $500, an d i s n o t d escr ib e d in s u b p a r a g r a p h (A) an d i s n o t am u lt i pl eo f$ 5, such amount shall be rounded to the next lowest multiple of $5.

§ 6695B Penalty for substantial misstatements on certification provided by supplier

(a) Imposition of penalty If— a person— provides a certification described in clause (iii)(II)(bb) of section 7701(a)(52)(D) with respect to any manufactured product, eligible component, or constituent element, material, or subcomponent of an eligible component, and knows, or reasonably should have known, that the certification would be used in connection with a determination under such section, such person knows, or reasonably should have known, that such certification is inaccurate or false with respect to— whether such property was produced or manufactured by a prohibited foreign entity, or the total direct costs or total direct material costs of such property that was not produced or manufactured by a prohibited foreign entity that were provided on such certification, and the inaccuracy or falsity described in paragraph (2) resulted in the disallowance of an applicable energy credit (as defined in section 6662(m)(2)) and an understatement of income tax (within the meaning of section 6662(d)(2)) for the taxable year in an amount which exceeds the lesser of— 5 percent of the tax required to be shown on the return for the taxable year, or $100,000, then such person shall pay a penalty in the amount determined under subsection (b).

(b) Amount of penalty The amount of the penalty imposed under subsection (a) on any person with respect to a certification shall be equal to the greater of— 10 percent of the amount of the underpayment (as defined in section 6664(a)) solely attributable to the inaccuracy or falsity described in subsection (a)(2), or $5,000.

(c) Exception No penalty shall be imposed under subsection (a) if the person establishes to the satisfaction of the Secretary that any inaccuracy or falsity described in subsection (a)(2) is due to a reasonable cause and not willful neglect.

(d) Definitions Any term used in this section which is also used in section 7701(a)(52) shall have the meaning given such term in such section.

§ 6695A Substantial and gross valuation misstatements attributable to incorrect appraisals

(a) Imposition of penalty If— a person prepares an appraisal of the value of property and such person knows, or reasonably should have known, that the appraisal would be used in connection with a return or a claim for refund, and the claimed value of the property on a return or claim for refund which is based on such appraisal results in a substantial valuation misstatement under chapter 1 (within the meaning of section 6662(e)), a substantial estate or gift tax valuation understatement (within the meaning of section 6662(g)), or a gross valuation misstatement (within the meaning of section 6662(h)), with respect to such property, then such person shall pay a penalty in the amount determined under subsection (b).

(b) Amount of penalty The amount of the penalty imposed under subsection (a) on any person with respect to an appraisal shall be equal to the lesser of— the greater of— 10 percent of the amount of the underpayment (as defined in section 6664(a)) attributable to the misstatement described in subsection (a)(2), or $1,000, or 125 percent of the gross income received by the person described in subsection (a)(1) from the preparation of the appraisal.

(c) Exception No penalty shall be imposed under subsection (a) if the person establishes to the satisfaction of the Secretary that the value established in the appraisal was more likely than not the proper value.

§ 6696 Rules applicable with respect to sections 6694, 6695, 6695A, and 6695B

(a) Penalties to be additional to any other penalties The penalties provided by sections 6694, 6695, 6695A, and 6695B shall be in addition to any other penalties provided by law.

(b) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply with respect to the assessment or collection of the penalties provided by sections 6694, 6695, 6695A, and 6695B.

(c) Procedure for claiming refund Any claim for credit or refund of any penalty paid under section 6694, 6695, 6695A, or 6695B shall be filed in accordance with regulations prescribed by the Secretary.

(d) Periods of limitation The amount of any penalty under section 6694(a), 6695, or 6695A shall be assessed within 3 years (or, in the case of any penalty under section 6695B, 6 years) after the return or claim for refund with respect to which the penalty is assessed was filed, and no proceeding in court without assessment for the collection of such tax shall be begun after the expiration of such period. In the case of any penalty under section 6694(b), the penalty may be assessed, or a proceeding in court for the collection of the penalty may be begun without assessment, at any time. Except as provided in section 6694(d), any claim for refund of an overpayment of any penalty assessed under section 6694, 6695, or 6695A shall be filed within 3 years (or, in the case of any claim for refund of an overpayment of any penalty assessed under section 6695B, 6 years) from the time the penalty was paid.

(e) Definitions For purposes of sections 6694, 6695, 6695A, and 6695B— The term “return” means any return of any tax imposed by this title, any administrative adjustment request under section 6227, and any partnership adjustment tracking report under section 6226(b)(4)(A). The term “claim for refund” means a claim for refund of, or credit against, any tax imposed by this title.

[§ 6697 Repealed. Pub. L. 111–325, title V, § 501(a), Dec. 22, 2010, 124 Stat. 3554]

§ 6698 Failure to file partnership return

(a) General rule In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any partnership required to file a return under section 6031, or a partnership adjustment tracking report under section 6226(b)(4)(A), for any taxable year— fails to file such return, or such report, at the time prescribed therefor (determined with regard to any extension of time for filing), or files a return or a report which fails to show the information required under section 6031 or 6226(b)(4)(A), respectively, such partnership shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause.

(b) Amount per month For purposes of subsection (a), the amount determined under this subsection for any month is the product of— $195, multiplied by the number of persons who were partners in the partnership during any part of the taxable year.

(c) Assessment of penalty The penalty imposed by subsection (a) shall be assessed against the partnership.

(d) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).

(e) Adjustment for inflation In the case of any return required to be filed in a calendar year beginning after 2014, the $195 d o ll a r am o u n t u n d ers u b sec t i o n (b) (1) s ha ll b e in cre a se d b y anam o u n t e q u a lt os u c h d o ll a r am o u n t m u lt i pl i e d b y t h ecos t - o f - l i v in g a d j u s t m e n t d e t er min e d u n d ersec t i o n 1 (f) (3) f or t h ec a l e n d a rye a r d e t er min e d b ys u b s t i t u t in g “ c a l e n d a rye a r 2013” f or “ c a l e n d a rye a r 2016” in s u b p a r a g r a p h (A) (ii) t h ereo f . I f an y am o u n t a d j u s t e d u n d er p a r a g r a p h (1) i s n o t am u lt i pl eo f$ 5, such amount shall be rounded to the next lowest multiple of $5.

[§ 6698A Repealed. Pub. L. 96–223, title IV, § 401(a), Apr. 2, 1980, 94 Stat. 299]

§ 6699 Failure to file S corporation return

(a) General rule In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any S corporation required to file a return under section 6037 for any taxable year— fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or files a return which fails to show the information required under section 6037, such S corporation shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause.

(b) Amount per month For purposes of subsection (a), the amount determined under this subsection for any month is the product of— $195, multiplied by the number of persons who were shareholders in the S corporation during any part of the taxable year.

(c) Assessment of penalty The penalty imposed by subsection (a) shall be assessed against the S corporation.

§ 6700 Promoting abusive tax shelters, etc.

(a) Imposition of penalty Any person who— organizes (or assists in the organization of)— a partnership or other entity, any investment plan or arrangement, or any other plan or arrangement, or participates (directly or indirectly) in the sale of any interest in an entity or plan or arrangement referred to in subparagraph (A), and makes or furnishes or causes another person to make or furnish (in connection with such organization or sale)— a statement with respect to the allowability of any deduction or credit, the excludability of any income, or the securing of any other tax benefit by reason of holding an interest in the entity or participating in the plan or arrangement which the person knows or has reason to know is false or fraudulent as to any material matter, or a gross valuation overstatement as to any material matter, shall pay, with respect to each activity described in paragraph (1), a penalty equal to $1,000 or, if the person establishes that it is lesser, 100 percent of the gross income derived (or to be derived) by such person from such activity. For purposes of the preceding sentence, activities described in paragraph (1)(A) with respect to each entity or arrangement shall be treated as a separate activity and participation in each sale described in paragraph (1)(B) shall be so treated. Notwithstanding the first sentence, if an activity with respect to which a penalty imposed under this subsection involves a statement described in paragraph (2)(A), the amount of the penalty shall be equal to 50 percent of the gross income derived (or to be derived) from such activity by the person on which the penalty is imposed.

(b) Rules relating to penalty for gross valuation overstatements For purposes of this section, the term “gross valuation overstatement” means any statement as to the value of any property or services if— the value so stated exceeds 200 percent of the amount determined to be the correct valuation, and the value of such property or services is directly related to the amount of any deduction or credit allowable under chapter 1 to any participant. The Secretary may waive all or any part of the penalty provided by subsection (a) with respect to any gross valuation overstatement on a showing that there was a reasonable basis for the valuation and that such valuation was made in good faith.

(c) Penalty in addition to other penalties The penalty imposed by this section shall be in addition to any other penalty provided by law.

§ 6701 Penalties for aiding and abetting understatement of tax liability

(a) Imposition of penalty Any person— who aids or assists in, procures, or advises with respect to, the preparation or presentation of any portion of a return, affidavit, claim, or other document, who knows (or has reason to believe) that such portion will be used in connection with any material matter arising under the internal revenue laws, and who knows that such portion (if so used) would result in an understatement of the liability for tax of another person, shall pay a penalty with respect to each such document in the amount determined under subsection (b).

(b) Amount of penalty Except as provided in paragraph (2), the amount of the penalty imposed by subsection (a) shall be $1, 000. I f t h ere t u r n, a ff i d a v i t, c l aim, oro t h er d oc u m e n t re l a t es t o t h e t a x l iabi l i t yo f a cor p or a t i o n, t h e am o u n t o f t h e p e na lt y im p ose d b ys u b sec t i o n (a) s ha ll b e$ 10,000. If any person is subject to a penalty under subsection (a) with respect to any document relating to any taxpayer for any taxable period (or where there is no taxable period, any taxable event), such person shall not be subject to a penalty under subsection (a) with respect to any other document relating to such taxpayer for such taxable period (or event).

(c) Activities of subordinates For purposes of subsection (a), the term “procures” includes— ordering (or otherwise causing) a subordinate to do an act, and knowing of, and not attempting to prevent, participation by a subordinate in an act. For purposes of paragraph (1), the term “subordinate” means any other person (whether or not a director, officer, employee, or agent of the taxpayer involved) over whose activities the person has direction, supervision, or control.

(d) Taxpayer not required to have knowledge Subsection (a) shall apply whether or not the understatement is with the knowledge or consent of the persons authorized or required to present the return, affidavit, claim, or other document.

(e) Certain actions not treated as aid or assistance For purposes of subsection (a)(1), a person furnishing typing, reproducing, or other mechanical assistance with respect to a document shall not be treated as having aided or assisted in the preparation of such document by reason of such assistance.

(f) Penalty in addition to other penalties Except as provided by paragraphs (2) and (3), the penalty imposed by this section shall be in addition to any other penalty provided by law. No penalty shall be assessed under subsection (a) or (b) of section 6694 on any person with respect to any document for which a penalty is assessed on such person under subsection (a). No penalty shall be assessed under section 6700 on any person with respect to any document for which a penalty is assessed on such person under subsection (a).

§ 6702 Frivolous tax submissions

(a) Civil penalty for frivolous tax returns A person shall pay a penalty of $5,000 if— such person files what purports to be a return of a tax imposed by this title but which— does not contain information on which the substantial correctness of the self-assessment may be judged, or contains information that on its face indicates that the self-assessment is substantially incorrect, and the conduct referred to in paragraph (1)— is based on a position which the Secretary has identified as frivolous under subsection (c), or reflects a desire to delay or impede the administration of Federal tax laws.

(b) Civil penalty for specified frivolous submissions Except as provided in paragraph (3), any person who submits a specified frivolous submission shall pay a penalty of $5,000. For purposes of this section— The term “specified frivolous submission” means a specified submission if any portion of such submission— is based on a position which the Secretary has identified as frivolous under subsection (c), or reflects a desire to delay or impede the administration of Federal tax laws. The term “specified submission” means— a request for a hearing under— section 6320 (relating to notice and opportunity for hearing upon filing of notice of lien), or section 6330 (relating to notice and opportunity for hearing before levy), and an application under— section 6159 (relating to agreements for payment of tax liability in installments), section 7122 (relating to compromises), or section 7811 (relating to taxpayer assistance orders). If the Secretary provides a person with notice that a submission is a specified frivolous submission and such person withdraws such submission within 30 days after such notice, the penalty imposed under paragraph (1) shall not apply with respect to such submission.

(c) Listing of frivolous positions The Secretary shall prescribe (and periodically revise) a list of positions which the Secretary has identified as being frivolous for purposes of this subsection. The Secretary shall not include in such list any position that the Secretary determines meets the requirement of section 6662(d)(2)(B)(ii)(II).

(d) Reduction of penalty The Secretary may reduce the amount of any penalty imposed under this section if the Secretary determines that such reduction would promote compliance with and administration of the Federal tax laws.

(e) Penalties in addition to other penalties The penalties imposed by this section shall be in addition to any other penalty provided by law.

(f) Partnership adjustments An administrative adjustment request under section 6227 and a partnership adjustment tracking report under section 6226(b)(4)(A) shall be treated as a return for purposes of this section.

§ 6703 Rules applicable to penalties under sections 6700, 6701, and 6702

(a) Burden of proof In any proceeding involving the issue of whether or not any person is liable for a penalty under section 6700, 6701, or 6702, the burden of proof with respect to such issue shall be on the Secretary.

(b) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedures) shall not apply with respect to the assessment or collection of the penalties provided by sections 6700, 6701, and 6702.

(c) Extension of period of collection where person pays 15 percent of penalty If, within 30 days after the day on which notice and demand of any penalty under section 6700 or 6701 is made against any person, such person pays an amount which is not less than 15 percent of the amount of such penalty and files a claim for refund of the amount so paid, no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until the final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421(a), the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court. Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of such penalty in a proceeding begun as provided in paragraph (2). If, within 30 days after the day on which his claim for refund of any partial payment of any penalty under section 6700 or 6701 is denied (or, if earlier, within 30 days after the expiration of 6 months after the day on which he filed the claim for refund), the person fails to begin a proceeding in the appropriate United States district court for the determination of his liability for such penalty, paragraph (1) shall cease to apply with respect to such penalty, effective on the day following the close of the applicable 30-day period referred to in this paragraph. The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court in respect of any penalty described in paragraph (1) shall be suspended for the period during which the Secretary is prohibited from collecting by levy or a proceeding in court.

§ 6704 Failure to keep records necessary to meet reporting requirements under section 6047(d)

(a) Liability for penalty Any person who— has a duty to report or may have a duty to report any information under section 6047(d), and fails to keep such records as may be required by regulations prescribed under section 6047(d) for the purpose of providing the necessary data base for either current reporting or future reporting, shall pay a penalty for each calendar year for which there is any failure to keep such records.

(b) Amount of penalty The penalty of any person for any calendar year shall be $50, m u lt i pl i e d b y t h e n u mb ero f in d i v i d u a l s w i t h res p ec tt o w h o m s u c h f ai l u reocc u rs in s u c h ye a r . T h e p e na lt y u n d er t hi ssec t i o n o f an y p erso n f or an yc a l e n d a rye a rs ha ll n o t e x cee d$ 50,000.

(c) Exceptions No penalty shall be imposed by this section on any person for any failure which is shown to be due to reasonable cause and not to willful neglect. No penalty shall be imposed by this section on any failure by a person if such failure is attributable to a prior failure which has been penalized under this section and with respect to which the person has made all reasonable efforts to correct the failure. No penalty shall be imposed by this section on any person for any failure which is attributable to a failure occurring before January 1, 1983 , if the person has made all reasonable efforts to correct such pre-1983 failure.

§ 6705 Failure by broker to provide notice to payors

(a) In general Any person required under section 3406(d)(2)(B) to provide notice to any payor who willfully fails to provide such notice to such payor shall pay a penalty of $500 for each such failure.

(b) Penalty in addition to other penalties Any penalty imposed by this section shall be in addition to any other penalty provided by law.

§ 6706 Original issue discount information requirements

(a) Failure to show information on debt instrument In the case of a failure to set forth on a debt instrument the information required to be set forth on such instrument under section 1275(c)(1), unless it is shown that such failure is due to reasonable cause and not to willful neglect, the issuer shall pay a penalty of $50 for each instrument with respect to which such a failure exists.

(b) Failure to furnish information to Secretary Any issuer who fails to furnish information required under section 1275(c)(2) with respect to any issue of debt instruments on the date prescribed therefor (determined with regard to any extension of time for filing) shall pay a penalty equal to 1 percent of the aggregate issue price of such issue, unless it is shown that such failure is due to reasonable cause and not willful neglect. The amount of the penalty imposed under the preceding sentence with respect to any issue of debt instruments shall not exceed $50,000 for such issue.

(c) Deficiency procedures not to apply Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by this section.

§ 6707 Failure to furnish information regarding reportable transactions

(a) In general If a person who is required to file a return under section 6111(a) with respect to any reportable transaction— fails to file such return on or before the date prescribed therefor, or files false or incomplete information with the Secretary with respect to such transaction, such person shall pay a penalty with respect to such return in the amount determined under subsection (b).

(b) Amount of penalty Except as provided in paragraph (2), the penalty imposed under subsection (a) with respect to any failure shall be $50, 000. T h e p e na lt y im p ose d u n d ers u b sec t i o n (a) w i t h res p ec tt o an y l i s t e d t r an s a c t i o n s ha ll b e anam o u n t e q u a lt o t h e g re a t ero f —$ 200,000, or 50 percent of the gross income derived by such person with respect to aid, assistance, or advice which is provided with respect to the listed transaction before the date the return is filed under section 6111. Subparagraph (B) shall be applied by substituting “75 percent” for “50 percent” in the case of an intentional failure or act described in subsection (a).

(c) Rescission authority The provisions of section 6707A(d) (relating to authority of Commissioner to rescind penalty) shall apply to any penalty imposed under this section.

(d) Reportable and listed transactions For purposes of this section, the terms “reportable transaction” and “listed transaction” have the respective meanings given to such terms by section 6707A(c).

§ 6707A Penalty for failure to include reportable transaction information with return

(a) Imposition of penalty Any person who fails to include on any return or statement any information with respect to a reportable transaction which is required under section 6011 to be included with such return or statement shall pay a penalty in the amount determined under subsection (b).

(b) Amount of penalty Except as otherwise provided in this subsection, the amount of the penalty under subsection (a) with respect to any reportable transaction shall be 75 percent of the decrease in tax shown on the return as a result of such transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes). The amount of the penalty under subsection (a) with respect to any reportable transaction shall not exceed— in the case of a listed transaction, $200, 000 ($ 100,000 in the case of a natural person), or in the case of any other reportable transaction, $50, 000 ($ 10,000 in the case of a natural person). The amount of the penalty under subsection (a) with respect to any transaction shall not be less than $10, 000 ($ 5,000 in the case of a natural person).

(c) Definitions For purposes of this section: The term “reportable transaction” means any transaction with respect to which information is required to be included with a return or statement because, as determined under regulations prescribed under section 6011, such transaction is of a type which the Secretary determines as having a potential for tax avoidance or evasion. The term “listed transaction” means a reportable transaction which is the same as, or substantially similar to, a transaction specifically identified by the Secretary as a tax avoidance transaction for purposes of section 6011.

(d) Authority to rescind penalty The Commissioner of Internal Revenue may rescind all or any portion of any penalty imposed by this section with respect to any violation if— the violation is with respect to a reportable transaction other than a listed transaction, and rescinding the penalty would promote compliance with the requirements of this title and effective tax administration. Notwithstanding any other provision of law, any determination under this subsection may not be reviewed in any judicial proceeding. If a penalty is rescinded under paragraph (1), the Commissioner shall place in the file in the Office of the Commissioner the opinion of the Commissioner with respect to the determination, including— a statement of the facts and circumstances relating to the violation, the reasons for the rescission, and the amount of the penalty rescinded.

(e) Penalty reported to SEC In the case of a person— which is required to file periodic reports under section 13 or 15(d) of the Securities Exchange Act of 1934 or is required to be consolidated with another person for purposes of such reports, and which— is required to pay a penalty under this section with respect to a listed transaction, is required to pay a penalty under section 6662A with respect to any reportable transaction at a rate prescribed under section 6662A(c), or is required to pay a penalty under section 6662(h) with respect to any reportable transaction and would (but for section 6662A(e)(2)(B)) have been subject to penalty under section 6662A at a rate prescribed under section 6662A(c), the requirement to pay such penalty shall be disclosed in such reports filed by such person for such periods as the Secretary shall specify. Failure to make a disclosure in accordance with the preceding sentence shall be treated as a failure to which the penalty under subsection (b)(2) applies.

(f) Coordination with other penalties The penalty imposed by this section shall be in addition to any other penalty imposed by this title.

§ 6708 Failure to maintain lists of advisees with respect to reportable transactions

(a) Imposition of penalty If any person who is required to maintain a list under section 6112(a) fails to make such list available upon written request to the Secretary in accordance with section 6112(b) within 20 business days after the date of such request, such person shall pay a penalty of $10,000 for each day of such failure after such 20th day. No penalty shall be imposed by paragraph (1) with respect to the failure on any day if such failure is due to reasonable cause.

(b) Penalty in addition to other penalties The penalty imposed by this section shall be in addition to any other penalty provided by law.

§ 6709 Penalties with respect to mortgage credit certificates

(a) Negligence If— any person makes a material misstatement in any verified written statement made under penalties of perjury with respect to the issuance of a mortgage credit certificate, and such misstatement is due to the negligence of such person, such person shall pay a penalty of $1,000 for each mortgage credit certificate with respect to which such a misstatement was made.

(b) Fraud If a misstatement described in subsection (a)(1) is due to fraud on the part of the person making such misstatement, in addition to any criminal penalty, such person shall pay a penalty of $10,000 for each mortgage credit certificate with respect to which such a misstatement is made.

(c) Reports Any person required by section 25(g) to file a report with the Secretary who fails to file the report with respect to any mortgage credit certificate at the time and in the manner required by the Secretary shall pay a penalty of $200 f ors u c h f ai l u re u n l ess i t i ss h o w n t ha t s u c h f ai l u re i s d u e t ore a so nab l ec a u se an d n o tt o w i ll f u l n e g l ec t . I n t h ec a seo f an yre p or t re q u i re d u n d er t h eseco n d se n t e n ceo f sec t i o n 25 (g), t h e a gg re g a t e am o u n t o f t h e p e na lt y im p ose d b y t h e p rece d in g se n t e n ces ha ll n o t e x cee d$ 2,000.

(d) Mortgage credit certificate The term “mortgage credit certificate” has the meaning given to such term by section 25(c).

§ 6710 Failure to disclose that contributions are nondeductible

(a) Imposition of penalty If there is a failure to meet the requirement of section 6113 with respect to a fundraising solicitation by (or on behalf of) an organization to which section 6113 applies, such organization shall pay a penalty of $1, 000 f ore a c h d a yo n w hi c h s u c ha f ai l u reocc u rre d . T h e ma x im u m p e na lt y im p ose d u n d er t hi ss u b sec t i o n o n f ai l u res b y an yor g ani z a t i o n d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 10,000.

(b) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.

**(c) $10, 000 l imi t a t i o nn o tt o a ppl y w h ere in t e n t i o na l d i sre g a r d * * I f an y f ai l u re t o w hi c h s u b sec t i o n (a) a ppl i es i s d u e t o in t e n t i o na l d i sre g a r d o f t h ere q u i re m e n t o f sec t i o n 6113— t h e p e na lt y u n d ers u b sec t i o n (a) f or t h e d a yo n w hi c h s u c h f ai l u reocc u rre d s ha ll b e t h e g re a t ero f —$ 1,000, or 50 percent of the aggregate cost of the solicitations which occurred on such day and with respect to which there was such a failure, the $10,000 limitation of subsection (a) shall not apply to any penalty under subsection (a) for the day on which such failure occurred, and such penalty shall not be taken into account in applying such limitation to other penalties under subsection (a).

(d) Day on which failure occurs For purposes of this section, any failure to meet the requirement of section 6113 with respect to a solicitation— by television or radio, shall be treated as occurring when the solicitation was telecast or broadcast, by mail, shall be treated as occurring when the solicitation was mailed, not by mail but in written or printed form, shall be treated as occurring when the solicitation was distributed, or by telephone, shall be treated as occurring when the solicitation was made.

§ 6711 Failure by tax-exempt organization to disclose that certain information or service available from Federal Government

(a) Imposition of penalty If— a tax-exempt organization offers to sell (or solicits money for) specific information or a routine service for any individual which could be readily obtained by such individual free of charge (or for a nominal charge) from an agency of the Federal Government, the tax-exempt organization, when making such offer or solicitation, fails to make an express statement (in a conspicuous and easily recognizable format) that the information or service can be so obtained, and such failure is due to intentional disregard of the requirements of this subsection, such organization shall pay a penalty determined under subsection (b) for each day on which such a failure occurred.

(b) Amount of penalty The penalty under subsection (a) for any day on which a failure referred to in such subsection occurred shall be the greater of— $1,000, or 50 percent of the aggregate cost of the offers and solicitations referred to in subsection (a)(1) which occurred on such day and with respect to which there was such a failure.

(c) Definitions For purposes of this section— The term “tax-exempt organization” means any organization which— is described in subsection (c) or (d) of section 501 and exempt from taxation under section 501(a), or is a political organization (as defined in section 527(e)). The day on which any failure referred to in subsection (a) occurs shall be determined under rules similar to the rules of section 6710(d).

§ 6712 Failure to disclose treaty-based return positions

(a) General rule If a taxpayer fails to meet the requirements of section 6114, there is hereby imposed a penalty equal to $1, 000 ($ 10,000 in the case of a C corporation) on each such failure.

(b) Authority to waive The Secretary may waive all or any part of the penalty provided by this section on a showing by the taxpayer that there was reasonable cause for the failure and that the taxpayer acted in good faith.

(c) Penalty in addition to other penalties The penalty imposed by this section shall be in addition to any other penalty imposed by law.

§ 6713 Disclosure or use of information by preparers of returns

(a) Imposition of penalty If any person who is engaged in the business of preparing, or providing services in connection with the preparation of, returns of tax imposed by chapter 1, or any person who for compensation prepares any such return for any other person, and who— discloses any information furnished to him for, or in connection with, the preparation of any such return, or uses any such information for any purpose other than to prepare, or assist in preparing, any such return, shall pay a penalty of $250 f ore a c h s u c h d i sc l os u reor u se, b u tt h e t o t a l am o u n t im p ose d u n d er t hi ss u b sec t i o n o n s u c ha p erso n f or an yc a l e n d a rye a rs ha ll n o t e x cee d$ 10,000.

(b) Enhanced penalty for improper use or disclosure relating to identity theft In the case of a disclosure or use described in subsection (a) that is made in connection with a crime relating to the misappropriation of another person’s taxpayer identity (as defined in section 6103(b)(6)), whether or not such crime involves any tax filing, subsection (a) shall be applied— by substituting “ $1, 000” f or “$ 250”, and by substituting “ $50, 000” f or “$ 10,000”. The limitation on the total amount of the penalty under subsection (a) shall be applied separately with respect to disclosures or uses to which this subsection applies and to which it does not apply.

(c) Exceptions The rules of section 7216(b) shall apply for purposes of this section.

§ 6714 Failure to meet disclosure requirements applicable to quid pro quo contributions

(a) Imposition of penalty If an organization fails to meet the disclosure requirement of section 6115 with respect to a quid pro quo contribution, such organization shall pay a penalty of $10 f ore a c h co n t r ib u t i o nin res p ec t o f w hi c h t h eor g ani z a t i o n f ai l s t o mak e t h ere q u i re dd i sc l os u re, e x ce ptt ha tt h e t o t a lp e na lt y im p ose d b y t hi ss u b sec t i o n w i t h res p ec tt o a p a r t i c u l a r f u n d r ai s in g e v e n t or mai l in g s ha ll n o t e x cee d$ 5,000.

(b) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.

§ 6715 Dyed fuel sold for use or used in taxable use, etc.

(a) Imposition of penalty If— any dyed fuel is sold or held for sale by any person for any use which such person knows or has reason to know is not a nontaxable use of such fuel, any dyed fuel is held for use or used by any person for a use other than a nontaxable use and such person knew, or had reason to know, that such fuel was so dyed, any person willfully alters, chemically or otherwise, or attempts to so alter, the strength or composition of any dye or marking done pursuant to section 4082 in any dyed fuel, or any person who has knowledge that a dyed fuel which has been altered as described in paragraph (3) sells or holds for sale such fuel for any use which the person knows or has reason to know is not a nontaxable use of such fuel, then such person shall pay a penalty in addition to the tax (if any).

(b) Amount of penalty Except as provided in paragraph (2), the amount of the penalty under subsection (a) on each act shall be the greater of— $1, 000, or$ 10 for each gallon of the dyed fuel involved. In determining the penalty under subsection (a) on any person, paragraph (1) shall be applied by increasing the amount in paragraph (1)(A) by the product of such amount and the number of prior penalties (if any) imposed by this section on such person (or a related person or any predecessor of such person or related person).

(c) Definitions For purposes of this section— The term “dyed fuel” means any dyed diesel fuel or kerosene, whether or not the fuel was dyed pursuant to section 4082. The term “nontaxable use” has the meaning given such term by section 4082(b).

(d) Joint and several liability of certain officers and employees If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty.

(e) No administrative appeal for third and subsequent violations In the case of any person who is found to be subject to the penalty under this section after a chemical analysis of such fuel and who has been penalized under this section at least twice after the date of the enactment of this subsection, no administrative appeal or review shall be allowed with respect to such finding except in the case of a claim regarding— fraud or mistake in the chemical analysis, or mathematical calculation of the amount of the penalty.

§ 6715A Tampering with or failing to maintain security requirements for mechanical dye injection systems

(a) Imposition of penalty If any person tampers with a mechanical dye injection system used to indelibly dye fuel for purposes of section 4082, such person shall pay a penalty in addition to the tax (if any). If any operator of a mechanical dye injection system used to indelibly dye fuel for purposes of section 4082 fails to maintain the security standards for such system as established by the Secretary, then such operator shall pay a penalty in addition to the tax (if any).

(b) Amount of penalty The amount of the penalty under subsection (a) shall be— for each violation described in paragraph (1), the greater of— $25, 000, or$ 10 for each gallon of fuel involved, and for each— failure to maintain security standards described in paragraph (2), $1, 000, an df ai l u re t ocorrec t a v i o l a t i o n d escr ib e d in p a r a g r a p h (2),$ 1,000 per day for each day after which such violation was discovered or such person should have reasonably known of such violation.

(c) Joint and several liability If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity or other contracting party who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty. If a business entity described in paragraph (1) is part of an affiliated group (as defined in section 1504(a)), the parent corporation of such entity shall be jointly and severally liable with such entity for the penalty imposed under this section.

[§ 6716 Repealed. Pub. L. 111–312, title III, § 301(a), Dec. 17, 2010, 124 Stat. 3300]

§ 6717 Refusal of entry

(a) In general In addition to any other penalty provided by law, any person who refuses to admit entry or refuses to permit any other action by the Secretary authorized by section 4083(d)(1) shall pay a penalty of $1,000 for such refusal.

(b) Joint and several liability If a penalty is imposed under this section on any business entity, each officer, employee, or agent of such entity or other contracting party who willfully participated in any act giving rise to such penalty shall be jointly and severally liable with such entity for such penalty. If a business entity described in paragraph (1) is part of an affiliated group (as defined in section 1504(a)), the parent corporation of such entity shall be jointly and severally liable with such entity for the penalty imposed under this section.

(c) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.

§ 6718 Failure to display tax registration on vessels

(a) Failure to display registration Every operator of a vessel who fails to display proof of registration pursuant to section 4101(a)(3) shall pay a penalty of $500 for each such failure. With respect to any vessel, only one penalty shall be imposed by this section during any calendar month.

(b) Multiple violations In determining the penalty under subsection (a) on any person, subsection (a) shall be applied by increasing the amount in subsection (a) by the product of such amount and the aggregate number of penalties (if any) imposed with respect to prior months by this section on such person (or a related person or any predecessor of such person or related person).

(c) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.

§ 6719 Failure to register or reregister

(a) Failure to register or reregister Every person who is required to register or reregister under section 4101 and fails to do so shall pay a penalty in addition to the tax (if any).

(b) Amount of penalty The amount of the penalty under subsection (a) shall be— $10, 000 f ore a c hini t ia l f ai l u re t ore g i s t erorrere g i s t er, an d$ 1,000 for each day thereafter such person fails to register or reregister.

(c) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.

§ 6720 Fraudulent acknowledgments with respect to donations of motor vehicles, boats, and airplanes

Any donee organization required under section 170(f)(12)(A) to furnish a contemporaneous written acknowledgment to a donor which knowingly furnishes a false or fraudulent acknowledgment, or which knowingly fails to furnish such acknowledgment in the manner, at the time, and showing the information required under section 170(f)(12), or regulations prescribed thereunder, shall for each such act, or for each such failure, be subject to a penalty equal to— in the case of an acknowledgment with respect to a qualified vehicle to which section 170(f)(12)(A)(ii) applies, the greater of— the product of the highest rate of tax specified in section 1 and the sales price stated on the acknowledgment, or the gross proceeds from the sale of such vehicle, and in the case of an acknowledgment with respect to any other qualified vehicle to which section 170(f)(12) applies, the greater of— the product of the highest rate of tax specified in section 1 and the claimed value of the vehicle, or $5,000. (Added Pub. L. 108–357, title VIII, § 884(b)(1) , Oct. 22, 2004 , 118 Stat. 1634 .)

§ 6720A Penalty with respect to certain adulterated fuels

(a) In general Any person who knowingly transfers for resale, sells for resale, or holds out for resale any liquid for use in a diesel-powered highway vehicle or a diesel-powered train which does not meet applicable EPA regulations (as defined in section 45H(c)(3)), shall pay a penalty of $10,000 for each such transfer, sale, or holding out for resale, in addition to the tax on such liquid (if any).

(b) Penalty in the case of retailers Any person who knowingly holds out for sale (other than for resale) any liquid described in subsection (a), shall pay a penalty of $10,000 for each such holding out for sale, in addition to the tax on such liquid (if any).

§ 6720B Fraudulent identification of exempt use property

In addition to any criminal penalty provided by law, any person who identifies applicable property (as defined in section 170(e)(7)(C)) as having a use which is related to a purpose or function constituting the basis for the donee’s exemption under section 501 and who knows that such property is not intended for such a use shall pay a penalty of $10,000. (Added Pub. L. 109–280, title XII, § 1215(c)(1) , Aug. 17, 2006 , 120 Stat. 1079 .)

§ 6720C Penalty for failure to notify health plan of cessation of eligibility for continuation coverage premium assistance

(a) In general Except in the case of a failure described in subsection (b) or (c), any person required to notify a group health plan under section 9501(a)(2)(B) of the American Rescue Plan Act of 2021 who fails to make such a notification at such time and in such manner as the Secretary of Labor may require shall pay a penalty of $250 for each such failure.

(b) Intentional failure In the case of any such failure that is fraudulent, such person shall pay a penalty equal to the greater of— $250, or 110 percent of the premium assistance provided under section 9501(a)(1)(A) of the American Rescue Plan Act of 2021 after termination of eligibility under such section.

(c) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

§ 6721 Failure to file correct information returns

(a) Imposition of penalty In the case of a failure described in paragraph (2) by any person with respect to an information return, such person shall pay a penalty of $250 f ore a c h re t u r n w i t h res p ec tt o w hi c h s u c ha f ai l u reocc u rs, b u tt h e t o t a l am o u n t im p ose d o n s u c h p erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 3,000,000. For purposes of paragraph (1), the failures described in this paragraph are— any failure to file an information return with the Secretary on or before the required filing date, and any failure to include all of the information required to be shown on the return or the inclusion of incorrect information.

(b) Reduction where correction in specified period If any failure described in subsection (a)(2) is corrected on or before the day 30 days after the required filing date— the penalty imposed by subsection (a) shall be $50 in l i e u o f$ 250, and the total amount imposed on the person for all such failures during any calendar year which are so corrected shall not exceed $500, 000. I f an y f ai l u re d escr ib e d in s u b sec t i o n (a) (2) i scorrec t e d a f t er t h e 30 t h d a yre f erre d t o in p a r a g r a p h (1) b u t o n or b e f ore A ugu s t 1 o f t h ec a l e n d a rye a r in w hi c h t h ere q u i re df i l in g d a t eocc u rs — t h e p e na lt y im p ose d b ys u b sec t i o n (a) s ha ll b e$ 100 in lieu of $250, an d t h e t o t a l am o u n t im p ose d o n t h e p erso n f or a ll s u c h f ai l u res d u r in g t h ec a l e n d a rye a r w hi c ha resocorrec t e d s ha ll n o t e x cee d$ 1,500,000.

(c) Exceptions for certain de minimis failures If— an information return is filed with the Secretary, there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such return, and such failure is corrected on or before August 1 of the calendar year in which the required filing date occurs, for purposes of this section, such return shall be treated as having been filed with all of the correct required information. The number of information returns to which paragraph (1) applies for any calendar year shall not exceed the greater of— 10, or one-half of 1 percent of the total number of information returns required to be filed by the person during the calendar year. If, with respect to an information return filed with the Secretary— there are 1 or more failures described in subsection (a)(2)(B) relating to an incorrect dollar amount, no single amount in error differs from the correct amount by more than $100, an d n os in g l e am o u n t re p or t e df or t a x w i t hh e l d o n t h e in f or ma t i o n re t u r n d i ff ers f ro m t h ecorrec t am o u n t b y m ore t han$ 25, then no correction shall be required and, for purposes of this section, such return shall be treated as having been filed with all of the correct required information. Subparagraph (A) shall not apply with respect to any incorrect dollar amount to the extent that such error relates to an amount with respect to which an election is made under section 6722(c)(3)(B). The Secretary may issue regulations to prevent the abuse of the safe harbor under this paragraph, including regulations providing that this paragraph shall not apply to the extent necessary to prevent any such abuse.

**(d) Lower limitations for persons with gross receipts of not more than $5, 000, 000 * * I f an y p erso nm ee t s t h e g rossrece i pt s t es t o f p a r a g r a p h (2) w i t h res p ec tt o an yc a l e n d a rye a r, w i t h res p ec tt o f ai l u res d u r in g s u c h c a l e n d a rye a r — s u b sec t i o n (a) (1) s ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 1,000,000” for “ $3, 000, 000”, s u b sec t i o n (b) (1) (B) s ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 175,000” for “ $500, 000”, an d s u b sec t i o n (b) (2) (B) s ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 500,000” for “ $1, 500, 000”. A p erso nm ee t s t h e g rossrece i pt s t es t o f t hi s p a r a g r a p h f or an yc a l e n d a rye a r i f t h e a v er a g e ann u a l g rossrece i pt so f s u c h p erso n f or t h e m os t rece n t 3 t a x ab l eye a rse n d in g b e f ores u c h c a l e n d a rye a r d o n o t e x cee d$ 5,000,000. For purposes of subparagraph (A), the rules of paragraphs (2) and (3) of section 448(c) shall apply.

(e) Penalty in case of intentional disregard If 1 or more failures described in subsection (a)(2) are due to intentional disregard of the filing requirement (or the correct information reporting requirement), then, with respect to each such failure— subsections (b), (c), and (d) shall not apply, the penalty imposed under subsection (a) shall be $500, or, i f g re a t er — in t h ec a seo f a re t u r n o t h er t hana re t u r n re q u i re d u n d ersec t i o n 6045 (a), 6041 A (b), 6050 H, 6050 I, 6050 J, 6050 K, or 6050 L, 10 p erce n t o f t h e a gg re g a t e am o u n t o f t h e i t e m sre q u i re d t o b ere p or t e d correc tl y, in t h ec a seo f a re t u r n re q u i re d t o b e f i l e d b ysec t i o n 6045 (a), 6050 K, or 6050 L, 5 p erce n t o f t h e a gg re g a t e am o u n t o f t h e i t e m sre q u i re d t o b ere p or t e d correc tl y, in t h ec a seo f a re t u r n re q u i re d t o b e f i l e d u n d ersec t i o n 6050 I (a) w i t h res p ec tt o an y t r an s a c t i o n (orre l a t e d t r an s a c t i o n s), t h e g re a t ero f —$ 25,000, or the amount of cash (within the meaning of section 6050I(d)) received in such transaction (or related transactions) to the extent the amount of such cash does not exceed $100, 000, or in t h ec a seo f a re t u r n re q u i re d t o b e f i l e d u n d ersec t i o n 6050 V, 10 p erce n t o f t h e v a l u eo f t h e b e n e f i t o f an yco n t r a c tw i t h res p ec tt o w hi c hin f or ma t i o ni sre q u i re d t o b e in c l u d e d o n t h ere t u r n, an d in t h ec a seo f an y p e na lt y d e t er min e d u n d er p a r a g r a p h (2) — t h e$ 3,000,000 limitation under subsection (a) shall not apply, and such penalty shall not be taken into account in applying such limitation (or any similar limitation under subsection (b)) to penalties not determined under paragraph (2).

(f) Adjustment for inflation In the case of any failure relating to a return required to be filed in a calendar year beginning after 2014, each of the dollar amounts under subsections (a), (b), (d) (other than paragraph (2)(A) thereof), and (e) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2011” for “calendar year 2016” in subparagraph (A)(ii) thereof. If any amount adjusted under paragraph (1)— is not less than $75, 000 an d i s n o t am u lt i pl eo f$ 500, such amount shall be rounded to the next lowest multiple of $500, an d i s n o t d escr ib e d in s u b p a r a g r a p h (A) an d i s n o t am u lt i pl eo f$ 10, such amount shall be rounded to the next lowest multiple of $10.

§ 6722 Failure to furnish correct payee statements

(a) Imposition of penalty In the case of each failure described in paragraph (2) by any person with respect to a payee statement, such person shall pay a penalty of $250 f ore a c h s t a t e m e n tw i t h res p ec tt o w hi c h s u c ha f ai l u reocc u rs, b u tt h e t o t a l am o u n t im p ose d o n s u c h p erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 3,000,000. For purposes of paragraph (1), the failures described in this paragraph are— any failure to furnish a payee statement on or before the date prescribed therefor to the person to whom such statement is required to be furnished, and any failure to include all of the information required to be shown on a payee statement or the inclusion of incorrect information.

(b) Reduction where correction in specified period If any failure described in subsection (a)(2) is corrected on or before the day 30 days after the date prescribed for furnishing such statement— the penalty imposed by subsection (a) shall be $50 in l i e u o f$ 250, and the total amount imposed on the person for all such failures during any calendar year which are so corrected shall not exceed $500, 000. I f an y f ai l u re d escr ib e d in s u b sec t i o n (a) (2) i scorrec t e d a f t er t h e 30 t h d a yre f erre d t o in p a r a g r a p h (1) b u t o n or b e f ore A ugu s t 1 o f t h ec a l e n d a rye a r in w hi c h t h e d a t e p rescr ib e df or f u r ni s hin g s u c h s t a t e m e n t occ u rs — t h e p e na lt y im p ose d b ys u b sec t i o n (a) s ha ll b e$ 100 in lieu of $250, an d t h e t o t a l am o u n t im p ose d o n t h e p erso n f or a ll s u c h f ai l u res d u r in g t h ec a l e n d a rye a r w hi c ha resocorrec t e d s ha ll n o t e x cee d$ 1,500,000.

(c) Exception for de minimis failures If— a payee statement is furnished to the person to whom such statement is required to be furnished, there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such statement, and such failure is corrected on or before August 1 of the calendar year in which the date prescribed for furnishing such statement occurs, for purposes of this section, such statement shall be treated as having been furnished with all of the correct required information. The number of payee statements to which paragraph (1) applies for any calendar year shall not exceed the greater of— 10, or one-half of 1 percent of the total number of payee statements required to be furnished by the person during the calendar year. If, with respect to any payee statement— there are 1 or more failures described in subsection (a)(2)(B) relating to an incorrect dollar amount, no single amount in error differs from the correct amount by more than $100, an d n os in g l e am o u n t re p or t e df or t a x w i t hh e l d o n t h e p a yees t a t e m e n t d i ff ers f ro m t h ecorrec t am o u n t b y m ore t han$ 25, then no correction shall be required and, for purposes of this section, such statement shall be treated as having been furnished with all of the correct required information. Subparagraph (A) shall not apply to any payee statement if the person to whom such statement is required to be furnished makes an election (at such time and in such manner as the Secretary may prescribe) that subparagraph (A) not apply with respect to such statement. The Secretary may issue regulations to prevent the abuse of the safe harbor under this paragraph, including regulations providing that this paragraph shall not apply to the extent necessary to prevent any such abuse.

**(d) Lower limitations for persons with gross receipts of not more than $5, 000, 000 * * I f an y p erso nm ee t s t h e g rossrece i pt s t es t o f p a r a g r a p h (2) w i t h res p ec tt o an yc a l e n d a rye a r, w i t h res p ec tt o f ai l u res d u r in g s u c h c a l e n d a rye a r — s u b sec t i o n (a) (1) s ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 1,000,000” for “ $3, 000, 000”, s u b sec t i o n (b) (1) (B) s ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 175,000” for “ $500, 000”, an d s u b sec t i o n (b) (2) (B) s ha ll b e a ppl i e d b ys u b s t i t u t in g “$ 500,000” for “$1,500,000”. A person meets the gross receipts test of this paragraph if such person meets the gross receipts test of section 6721(d)(2).

(e) Penalty in case of intentional disregard If 1 or more failures to which subsection (a) applies are due to intentional disregard of the requirement to furnish a payee statement (or the correct information reporting requirement), then, with respect to each such failure— subsections (b), (c), and (d) shall not apply, the penalty imposed under subsection (a)(1) shall be $500, or, i f g re a t er — in t h ec a seo f a p a yees t a t e m e n t o t h er t hana s t a t e m e n t re q u i re d u n d ersec t i o n 6045 (b), 6041 A (e) (in res p ec t o f a re t u r n re q u i re d u n d ersec t i o n 6041 A (b)), 6050 H (d), 6050 J (e), 6050 K (b), or 6050 L (c), 10 p erce n t o f t h e a gg re g a t e am o u n t o f t h e i t e m sre q u i re d t o b ere p or t e d correc tl y, or in t h ec a seo f a p a yees t a t e m e n t re q u i re d u n d ersec t i o n 6045 (b), 6050 K (b), or 6050 L (c), 5 p erce n t o f t h e a gg re g a t e am o u n t o f t h e i t e m sre q u i re d t o b ere p or t e d correc tl y, an d in t h ec a seo f an y p e na lt y d e t er min e d u n d er p a r a g r a p h (2) — t h e$ 3,000,000 limitation under subsection (a) shall not apply, and such penalty shall not be taken into account in applying such limitation to penalties not determined under paragraph (2).

(f) Adjustment for inflation In the case of any failure relating to a statement required to be furnished in a calendar year beginning after 2014, each of the dollar amounts under subsections (a), (b), (d)(1), and (e) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2011” for “calendar year 2016” in subparagraph (A)(ii) thereof. If any amount adjusted under paragraph (1)— is not less than $75, 000 an d i s n o t am u lt i pl eo f$ 500, such amount shall be rounded to the next lowest multiple of $500, an d i s n o t d escr ib e d in s u b p a r a g r a p h (A) an d i s n o t am u lt i pl eo f$ 10, such amount shall be rounded to the next lowest multiple of $10.

§ 6723 Failure to comply with other information reporting requirements

In the case of a failure by any person to comply with a specified information reporting requirement on or before the time prescribed therefor, such person shall pay a penalty of $50 f ore a c h s u c h f ai l u re, b u tt h e t o t a l am o u n t im p ose d o n s u c h p erso n f or a ll s u c h f ai l u res d u r in g an yc a l e n d a rye a rs ha ll n o t e x cee d$ 100,000. (Added Pub. L. 99–514, title XV, § 1501(a) , Oct. 22, 1986 , 100 Stat. 2733 ; amended Pub. L. 101–239, title VII, § 7711(a) , Dec. 19, 1989 , 103 Stat. 2390 .)

§ 6724 Waiver; definitions and special rules

(a) Reasonable cause waiver No penalty shall be imposed under this part with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect.

(b) Payment of penalty Any penalty imposed by this part shall be paid on notice and demand by the Secretary and in the same manner as tax.

(c) Special rule for failure to meet magnetic media requirements No penalty shall be imposed under section 6721 solely by reason of any failure to comply with the requirements of the regulations prescribed under section 6011(e)(2), except to the extent that such a failure occurs with respect to more than the applicable number (determined under section 6011(e)(5) with respect to the calendar year to which such returns relate) of information returns or with respect to a return described in section 6011(e)(4).

(d) Definitions For purposes of this part— The term “information return” means— any statement of the amount of payments to another person required by— section 6041(a) or (b) (relating to certain information at source), section 6042(a)(1) (relating to payments of dividends), section 6044(a)(1) (relating to payments of patronage dividends), section 6049(a) (relating to payments of interest), section 6050A(a) (relating to reporting requirements of certain fishing boat operators), section 6050N(a) (relating to payments of royalties), section 6051(d) (relating to information returns with respect to income tax withheld), section 6050R (relating to returns relating to certain purchases of fish), or section 110(d) (relating to qualified lessee construction allowances for short-term leases), any return required by— section 6041A(a) or (b) (relating to returns of direct sellers), section 6043A(a) (relating to returns relating to taxable mergers and acquisitions), section 6045(a) or (d) (relating to returns of brokers), section 6045B(a) (relating to returns relating to actions affecting basis of specified securities), section 6050H(a) or (h)(1) (relating to mortgage interest received in trade or business from individuals), section 6050I(a) or (g)(1) (relating to cash received in trade or business, etc.), section 6050J(a) (relating to foreclosures and abandonments of security), section 6050K(a) (relating to exchanges of certain partnership interests), section 6050L(a) (relating to returns relating to certain dispositions of donated property), section 6050P (relating to returns relating to the cancellation of indebtedness by certain financial entities), section 6050Q (relating to certain long-term care benefits), section 6050S (relating to returns relating to payments for qualified tuition and related expenses), section 6050T (relating to returns relating to credit for health insurance costs of eligible individuals), section 6052(a) (relating to reporting payment of wages in the form of group-life insurance), section 6050V (relating to returns relating to applicable insurance contracts in which certain exempt organizations hold interests), section 6053(c)(1) (relating to reporting with respect to certain tips), subsection (b) or (e) of section 1060 (relating to reporting requirements of transferors and transferees in certain asset acquisitions), section 4101(d) (relating to information reporting with respect to fuels taxes), subparagraph (C) of section 338(h)(10) (relating to information required to be furnished to the Secretary in case of elective recognition of gain or loss), section 264(f)(5)(A)(iv) (relating to reporting with respect to certain life insurance and annuity contracts), section 6050U (relating to charges or payments for qualified long-term care insurance contracts under combined arrangements), section 6039(a) (relating to returns required with respect to certain options), section 6050W (relating to returns to payments made in settlement of payment card transactions), section 6055 (relating to returns relating to information regarding health insurance coverage), section 6056 (relating to returns relating to certain employers required to report on health insurance coverage), section 6050Y (relating to returns relating to certain life insurance contract transactions), section 6045A(d) (relating to returns for certain digital assets), section 6050Z (relating to reports relating to long-term care premium statements), or section 6050AA(a) (relating to returns relating to applicable passenger vehicle loan interest received in trade or business from individuals), any statement of the amount of payments to another person required to be made to the Secretary under— section 408(i) (relating to reports with respect to individual retirement accounts or annuities), or section 6047(d) (relating to reports by employers, plan administrators, etc.), and any statement required to be filed with the Secretary under section 6035. Such term also includes any form, statement, or schedule required to be filed with the Secretary under chapter 4 or with respect to any amount from which tax was required to be deducted and withheld under chapter 3 (or from which tax would be required to be so deducted and withheld but for an exemption under this title or any treaty obligation of the United States). The term “payee statement” means any statement required to be furnished under— section 6031(b) or (c), 6034A, or 6037(b) (relating to statements furnished by certain pass-thru entities), section 6039(b) (relating to information required in connection with certain options), section 6041(d) (relating to information at source), section 6041A(e) (relating to returns regarding payments of remuneration for services and direct sales), section 6042(c) (relating to returns regarding payments of dividends and corporate earnings and profits), subsections (b) and (d) of section 6043A (relating to returns relating to taxable mergers and acquisitions), section 6044(e) (relating to returns regarding payments of patronage dividends), section 6045(b) or (d) (relating to returns of brokers), section 6045A (relating to information required in connection with transfers of covered securities to brokers), subsections (c) and (e) of section 6045B (relating to returns relating to actions affecting basis of specified securities), section 6049(c) (relating to returns regarding payments of interest), section 6050A(b) (relating to reporting requirements of certain fishing boat operators), section 6050H(d) or (h)(2) (relating to returns relating to mortgage interest received in trade or business from individuals), section 6050I(e) or paragraph (4) or (5) of section 6050I(g) (relating to cash received in trade or business, etc.), section 6050J(e) (relating to returns relating to foreclosures and abandonments of security), section 6050K(b) (relating to returns relating to exchanges of certain partnership interests), section 6050L(c) (relating to returns relating to certain dispositions of donated property), section 6050N(b) (relating to returns regarding payments of royalties), section 6050P(d) (relating to returns relating to the cancellation of indebtedness by certain financial entities), section 6050Q(b) (relating to certain long-term care benefits), section 6050R(c) (relating to returns relating to certain purchases of fish), section 6051 (relating to receipts for employees), section 6052(b) (relating to returns regarding payment of wages in the form of group-term life insurance), section 6053(b) or (c) (relating to reports of tips), section 6048(b)(1)(B) (relating to foreign trust reporting requirements), section 408(i) (relating to reports with respect to individual retirement plans) to any person other than the Secretary with respect to the amount of payments made to such person, section 6047(d) (relating to reports by plan administrators) to any person other than the Secretary with respect to the amount of payments made to such person, section 6050S(d) (relating to returns relating to qualified tuition and related expenses), section 264(f)(5)(A)(iv) (relating to reporting with respect to certain life insurance and annuity contracts), section 6050T (relating to returns relating to credit for health insurance costs of eligible individuals), section 6050U (relating to charges or payments for qualified long-term care insurance contracts under combined arrangements), section 6050W(f) (relating to returns relating to payments made in settlement of payment card transactions), section 6055(c) (relating to statements relating to information regarding health insurance coverage), section 6056(c) (relating to statements relating to certain employers required to report on health insurance coverage), section 6035 (other than a statement described in paragraph (1)(D)), section 6226(a)(2) (relating to statements relating to alternative to payment of imputed underpayment by partnership) or under any other provision of this title which provides for the application of rules similar to such section, subsection (a)(2), (b)(2), or (c)(2) of section 6050Y (relating to returns relating to certain life insurance contract transactions), section 6050Z (relating to reports relating to long-term care premium statements), section 6050AA(c) (relating to statements relating to applicable passenger vehicle loan interest received in trade or business from individuals), section 6039K(c) (relating to disposition of qualified opportunity fund investments), or section 6039L (relating to information required from certain qualified opportunity zone businesses and qualified rural opportunity zone businesses). Such term also includes any form, statement, or schedule required to be furnished to the recipient of any amount from which tax was required to be deducted and withheld under chapter 3 or 4 (or from which tax would be required to be so deducted and withheld but for an exemption under this title or any treaty obligation of the United States). The term “specified information reporting requirement” means— the notice required by section 6050K(c)(1) (relating to requirement that transferor notify partnership of exchange), any requirement contained in the regulations prescribed under section 6109 that a person— include his TIN on any return, statement, or other document (other than an information return or payee statement), furnish his TIN to another person, or include on any return, statement, or other document (other than an information return or payee statement) made with respect to another person the TIN of such person, 1 any requirement under section 6109(h) that— a person include on his return the name, address, and TIN of another person, or a person furnish his TIN to another person. The term “required filing date” means the date prescribed for filing an information return with the Secretary (determined with regard to any extension of time for filing).

(e) Special rule for certain partnership returns If any partnership return under section 6031(a) is required under section 6011(e) to be filed on magnetic media or in other machine-readable form, for purposes of this part, each schedule required to be included with such return with respect to each partner shall be treated as a separate information return.

(f) Special rule for returns of educational institutions related to higher education tuition and related expenses No penalty shall be imposed under section 6721 or 6722 solely by reason of failing to provide the TIN of an individual on a return or statement required by section 6050S(a)(1) if the eligible educational institution required to make such return contemporaneously makes a true and accurate certification under penalty of perjury (and in such form and manner as may be prescribed by the Secretary) that it has complied with standards promulgated by the Secretary for obtaining such individual’s TIN.

(g) Special rule for reporting certain additional taxes No penalty shall be imposed under section 6721 or 6722 if— a person makes a return or report under section 6047(d) or 408(i) with respect to any distribution, such distribution is made following a rollover, transfer, or exchange described in section 72(t)(4)(C) or section 72(q)(3)(C), in making such return or report the person relies upon a certification provided by the taxpayer that the distributions satisfy the requirements of section 72(t)(4)(C)(iii) or section 72(q)(3)(B)(iii), as applicable, and such person does not have actual knowledge that the distributions do not satisfy such requirements.

§ 6725 Failure to report information under section 4101

(a) In general In the case of each failure described in subsection (b) by any person with respect to a vessel or facility, such person shall pay a penalty of $10,000 in addition to the tax (if any).

(b) Failures subject to penalty For purposes of subsection (a), the failures described in this subsection are— any failure to make a report under section 4101(d) on or before the date prescribed therefor, and any failure to include all of the information required to be shown on such report or the inclusion of incorrect information.

(c) Reasonable cause exception No penalty shall be imposed under this section with respect to any failure if it is shown that such failure is due to reasonable cause.

§ 6726 Failure to comply with information reporting requirements relating to qualified opportunity funds and qualified rural opportunity funds

(a) In general If any person required to file a return under section 6039K fails to file a complete and correct return under such section in the time and in the manner prescribed therefor, such person shall pay a penalty of $500 for each day during which such failure continues.

(b) Limitation The maximum penalty under this section on failures with respect to any 1 return shall not exceed $10, 000. I n t h ec a seo f an y f ai l u re d escr ib e d in s u b sec t i o n (a) w i t h res p ec tt o a f u n d t h e g ross a sse t so f w hi c h (d e t er min e d o n t h e l a s t d a yo f t h e t a x ab l eye a r) a re in e x cesso f$ 10,000,000, paragraph (1) shall be applied by substituting “ $50, 000” f or “$ 10,000”.

(c) Penalty in cases of intentional disregard If a failure described in subsection (a) is due to intentional disregard, then— subsection (a) shall be applied by substituting “ $2, 500” f or “$ 500”, subsection (b)(1) shall be applied by substituting “ $50, 000” f or “$ 10,000”, and subsection (b)(2) shall be applied by substituting “ $250, 000” f or “$ 50,000”.

(d) Inflation adjustment In the case of any failure relating to a return required to be filed in a calendar year beginning after 2025, each of the dollar amounts in subsections (a), (b), and (c) shall be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2024” for “calendar year 2016” in subparagraph (A)(ii) thereof. If the $500 d o ll a r am o u n t in s u b sec t i o n (a) an d (c) (1) or t h e$ 2,500 amount in subsection (c)(1), after being increased under paragraph (1), is not a multiple of $10, s u c h d o ll a r am o u n t s ha ll b ero u n d e d t o t h e n e x tl o w es t m u lt i pl eo f$ 10. If the $10, 000, 000 d o ll a r am o u n t in s u b sec t i o n (b) (2), a f t er b e in g in cre a se d u n d er p a r a g r a p h (1), i s n o t am u lt i pl eo f$ 10,000, such dollar amount shall be rounded to the next lowest multiple of $10, 000. I f an y d o ll a r am o u n t in s u b sec t i o n (b) or (c) (o t h er t hanan y am o u n tt o w hi c h s u b p a r a g r a p h (A) or (B) a ppl i es), a f t er b e in g in cre a se d u n d er p a r a g r a p h (1), i s n o t am u lt i pl eo f$ 1,000, such dollar amount shall be rounded to the next lowest multiple of $1,000.

§ 6751 Procedural requirements

(a) Computation of penalty included in notice The Secretary shall include with each notice of penalty under this title information with respect to the name of the penalty, the section of this title under which the penalty is imposed, and a computation of the penalty.

(b) Approval of assessment No penalty under this title shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher level official as the Secretary may designate. Paragraph (1) shall not apply to— any addition to tax under section 6651, 6654, 6655, or 6662 (but only with respect to an addition to tax by reason of paragraph (9) or (10) of subsection (b) thereof); or any other penalty automatically calculated through electronic means.

(c) Penalties For purposes of this section, the term “penalty” includes any addition to tax or any additional amount.

Federal • Lex Graph

Explorer

CHAPTER 68 - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES

CHAPTER 68 - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES

Sections (81)

§ 6651 Failure to file tax return or to pay tax

§ 6652 Failure to file certain information returns, registration statements, etc.

§ 6653 Failure to pay stamp tax

§ 6654 Failure by individual to pay estimated income tax

§ 6655 Failure by corporation to pay estimated income tax

§ 6656 Failure to make deposit of taxes

§ 6657 Bad checks

§ 6658 Coordination with title 11

§ 6659 Improper claim for Trump account contribution pilot program credit

[§§ 6659A to 6661 Repealed. Pub. L. 101–239, title VII, § 7721(c)(2), Dec. 19, 1989, 103 Stat. 2399]

§ 6662 Imposition of accuracy-related penalty on underpayments

§ 6662A Imposition of accuracy-related penalty on understatements with respect to reportable transactions

§ 6663 Imposition of fraud penalty

§ 6664 Definitions and special rules

§ 6665 Applicable rules

§ 6671 Rules for application of assessable penalties

§ 6672 Failure to collect and pay over tax, or attempt to evade or defeat tax

§ 6673 Sanctions and costs awarded by courts

§ 6674 Fraudulent statement or failure to furnish statement to employee

§ 6675 Excessive claims with respect to the use of certain fuels

§ 6676 Erroneous claim for refund or credit

§ 6677 Failure to file information with respect to certain foreign trusts

[§ 6678 Repealed. Pub. L. 99–514, title XV, § 1501(d)(2), Oct. 22, 1986, 100 Stat. 2740]

§ 6679 Failure to file returns, etc., with respect to foreign corporations or foreign partnerships

[§ 6680 Repealed. Pub. L. 94–455, title XIX, § 1904(b)(10)(A)(vi)(I), Oct. 4, 1976, 90 Stat. 1817]

[§ 6681 Repealed. Pub. L. 94–455, title XIX, § 1904(b)(10)(D)(i), Oct. 4, 1976, 90 Stat. 1817]

§ 6682 False information with respect to withholding

[§ 6683 Repealed. Pub. L. 109–135, title IV, § 403(n)(3)(A), Dec. 21, 2005, 119 Stat. 2626]

§ 6684 Assessable penalties with respect to liability for tax under chapter 42

§ 6685 Assessable penalty with respect to public inspection requirements for certain tax-exempt organizations

§ 6686 Failure to file returns or supply information by DISC or former FSC

[§ 6687 Repealed. Pub. L. 101–239, title VII, § 7711(b)(1), Dec. 19, 1989, 103 Stat. 2393]

§ 6688 Assessable penalties with respect to information required to be furnished under section 7654

§ 6689 Failure to file notice of redetermination of foreign tax

§ 6690 Fraudulent statement or failure to furnish statement to plan participant

[§ 6691 Reserved]

§ 6692 Failure to file actuarial report

§ 6693 Failure to provide reports on certain tax-favored accounts or annuities; penalties relating to designated nondeductible contributions

§ 6694 Understatement of taxpayer’s liability by tax return preparer

§ 6695 Other assessable penalties with respect to the preparation of tax returns for other persons

§ 6695B Penalty for substantial misstatements on certification provided by supplier

§ 6695A Substantial and gross valuation misstatements attributable to incorrect appraisals

§ 6696 Rules applicable with respect to sections 6694, 6695, 6695A, and 6695B

[§ 6697 Repealed. Pub. L. 111–325, title V, § 501(a), Dec. 22, 2010, 124 Stat. 3554]

§ 6698 Failure to file partnership return

[§ 6698A Repealed. Pub. L. 96–223, title IV, § 401(a), Apr. 2, 1980, 94 Stat. 299]

§ 6699 Failure to file S corporation return

§ 6700 Promoting abusive tax shelters, etc.

§ 6701 Penalties for aiding and abetting understatement of tax liability

§ 6702 Frivolous tax submissions

§ 6703 Rules applicable to penalties under sections 6700, 6701, and 6702

§ 6704 Failure to keep records necessary to meet reporting requirements under section 6047(d)

§ 6705 Failure by broker to provide notice to payors

§ 6706 Original issue discount information requirements

§ 6707 Failure to furnish information regarding reportable transactions

§ 6707A Penalty for failure to include reportable transaction information with return

§ 6708 Failure to maintain lists of advisees with respect to reportable transactions

§ 6709 Penalties with respect to mortgage credit certificates

§ 6710 Failure to disclose that contributions are nondeductible

§ 6711 Failure by tax-exempt organization to disclose that certain information or service available from Federal Government

§ 6712 Failure to disclose treaty-based return positions

§ 6713 Disclosure or use of information by preparers of returns

§ 6714 Failure to meet disclosure requirements applicable to quid pro quo contributions

§ 6715 Dyed fuel sold for use or used in taxable use, etc.

§ 6715A Tampering with or failing to maintain security requirements for mechanical dye injection systems

[§ 6716 Repealed. Pub. L. 111–312, title III, § 301(a), Dec. 17, 2010, 124 Stat. 3300]

§ 6717 Refusal of entry

§ 6718 Failure to display tax registration on vessels

§ 6719 Failure to register or reregister

§ 6720 Fraudulent acknowledgments with respect to donations of motor vehicles, boats, and airplanes

§ 6720A Penalty with respect to certain adulterated fuels

§ 6720B Fraudulent identification of exempt use property

§ 6720C Penalty for failure to notify health plan of cessation of eligibility for continuation coverage premium assistance

§ 6721 Failure to file correct information returns

§ 6722 Failure to furnish correct payee statements

§ 6651 Failure to file tax return or to pay tax

§ 6652 Failure to file certain information returns, registration statements, etc.

§ 6653 Failure to pay stamp tax

§ 6654 Failure by individual to pay estimated income tax

§ 6655 Failure by corporation to pay estimated income tax

§ 6656 Failure to make deposit of taxes

§ 6657 Bad checks

§ 6658 Coordination with title 11

§ 6659 Improper claim for Trump account contribution pilot program credit

[§§ 6659A to 6661 Repealed. Pub. L. 101–239, title VII, § 7721(c)(2), Dec. 19, 1989, 103 Stat. 2399]

§ 6662 Imposition of accuracy-related penalty on underpayments

§ 6662A Imposition of accuracy-related penalty on understatements with respect to reportable transactions

§ 6663 Imposition of fraud penalty

§ 6664 Definitions and special rules

§ 6665 Applicable rules

§ 6671 Rules for application of assessable penalties

§ 6672 Failure to collect and pay over tax, or attempt to evade or defeat tax

§ 6673 Sanctions and costs awarded by courts

§ 6674 Fraudulent statement or failure to furnish statement to employee

§ 6675 Excessive claims with respect to the use of certain fuels

§ 6676 Erroneous claim for refund or credit

§ 6677 Failure to file information with respect to certain foreign trusts

[§ 6678 Repealed. Pub. L. 99–514, title XV, § 1501(d)(2), Oct. 22, 1986, 100 Stat. 2740]

§ 6679 Failure to file returns, etc., with respect to foreign corporations or foreign partnerships

[§ 6680 Repealed. Pub. L. 94–455, title XIX, § 1904(b)(10)(A)(vi)(I), Oct. 4, 1976, 90 Stat. 1817]

[§ 6681 Repealed. Pub. L. 94–455, title XIX, § 1904(b)(10)(D)(i), Oct. 4, 1976, 90 Stat. 1817]

§ 6682 False information with respect to withholding

[§ 6683 Repealed. Pub. L. 109–135, title IV, § 403(n)(3)(A), Dec. 21, 2005, 119 Stat. 2626]

§ 6684 Assessable penalties with respect to liability for tax under chapter 42

§ 6685 Assessable penalty with respect to public inspection requirements for certain tax-exempt organizations

§ 6686 Failure to file returns or supply information by DISC or former FSC

[§ 6687 Repealed. Pub. L. 101–239, title VII, § 7711(b)(1), Dec. 19, 1989, 103 Stat. 2393]

§ 6688 Assessable penalties with respect to information required to be furnished under section 7654

§ 6689 Failure to file notice of redetermination of foreign tax

§ 6690 Fraudulent statement or failure to furnish statement to plan participant

[§ 6691 Reserved]

§ 6692 Failure to file actuarial report

§ 6693 Failure to provide reports on certain tax-favored accounts or annuities; penalties relating to designated nondeductible contributions

§ 6694 Understatement of taxpayer’s liability by tax return preparer

§ 6695 Other assessable penalties with respect to the preparation of tax returns for other persons

§ 6695B Penalty for substantial misstatements on certification provided by supplier

§ 6695A Substantial and gross valuation misstatements attributable to incorrect appraisals

§ 6696 Rules applicable with respect to sections 6694, 6695, 6695A, and 6695B

[§ 6697 Repealed. Pub. L. 111–325, title V, § 501(a), Dec. 22, 2010, 124 Stat. 3554]

§ 6698 Failure to file partnership return

[§ 6698A Repealed. Pub. L. 96–223, title IV, § 401(a), Apr. 2, 1980, 94 Stat. 299]

§ 6699 Failure to file S corporation return

§ 6700 Promoting abusive tax shelters, etc.

§ 6701 Penalties for aiding and abetting understatement of tax liability

§ 6702 Frivolous tax submissions

§ 6703 Rules applicable to penalties under sections 6700, 6701, and 6702

§ 6704 Failure to keep records necessary to meet reporting requirements under section 6047(d)

§ 6705 Failure by broker to provide notice to payors

§ 6706 Original issue discount information requirements

§ 6707 Failure to furnish information regarding reportable transactions

§ 6707A Penalty for failure to include reportable transaction information with return

§ 6708 Failure to maintain lists of advisees with respect to reportable transactions

§ 6709 Penalties with respect to mortgage credit certificates

§ 6710 Failure to disclose that contributions are nondeductible

§ 6711 Failure by tax-exempt organization to disclose that certain information or service available from Federal Government

§ 6712 Failure to disclose treaty-based return positions

§ 6713 Disclosure or use of information by preparers of returns

§ 6714 Failure to meet disclosure requirements applicable to quid pro quo contributions

§ 6715 Dyed fuel sold for use or used in taxable use, etc.

§ 6715A Tampering with or failing to maintain security requirements for mechanical dye injection systems

[§ 6716 Repealed. Pub. L. 111–312, title III, § 301(a), Dec. 17, 2010, 124 Stat. 3300]

§ 6717 Refusal of entry

§ 6718 Failure to display tax registration on vessels

§ 6719 Failure to register or reregister

§ 6720 Fraudulent acknowledgments with respect to donations of motor vehicles, boats, and airplanes

§ 6720A Penalty with respect to certain adulterated fuels

§ 6720B Fraudulent identification of exempt use property

§ 6720C Penalty for failure to notify health plan of cessation of eligibility for continuation coverage premium assistance

§ 6721 Failure to file correct information returns

§ 6722 Failure to furnish correct payee statements

§ 6723 Failure to comply with other information reporting requirements

§ 6724 Waiver; definitions and special rules

§ 6725 Failure to report information under section 4101

§ 6726 Failure to comply with information reporting requirements relating to qualified opportunity funds and qualified rural opportunity funds

§ 6751 Procedural requirements