In addition to any criminal penalty provided by law, if any notice or return required to be filed by section
(1)is not filed on or before the time provided in such section, or
(2)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 percent of the gross reportable amount. If any failure described in the preceding sentence continues for more than 90 days after the day on which the Secretary mails notice of such failure to the person required to pay such penalty, such person shall pay a penalty (in addition to the amount determined under the preceding sentence) of $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
In the case of a return required under section
(1)the United States person referred to in such section shall be liable for the penalty imposed by subsection (a), and
(2)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—
(1)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
(2)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
(3)the gross amount of the distributions in the case of a failure relating to section
(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).
2010—Subsec. (a). Pub. L. 111–147, in concluding provisions, inserted “the greater of $10,000 or” before “35 percent” and substituted “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).” for “In no event shall the penalty under this subsection with respect to any failure exceed the gross reportable amount.”
1996—Pub. L. 104–188, § 1901(b), substituted “information” for “information returns” in section catchline and amended text generally, substituting present provisions for former provisions which related to civil penalty in subsec. (a) and nonapplicability of deficiency procedures in subsec. (b).
1976—Subsec. (a). Pub. L. 94–455inserted “(or, in the case of a failure with respect to section
6048(c), equal to 5 percent of the value of the corpus of the trust at the close of the taxable year)” after “transferred to a trust”.
1974—Subsec. (b). Pub. L. 93–406substituted “and certain excise” for “chapter 42”.
1969—Subsec. (b). Pub. L. 91–172inserted reference to chapter 42 taxes.
Effective Date of 2010 Amendment
Pub. L. 111–147, title V, § 535(b),Mar. 18, 2010, 124 Stat. 115, provided that: “The amendments made by this section [amending this section] shall apply to notices and returns required to be filed after December 31, 2009.”
Effective Date of 1996 Amendment
Amendment by Pub. L. 104–188, to the extent related to section
6048(a) of this title, applicable to reportable events (as defined in such section) occurring after Aug. 20, 1996, to the extent related to section
6048(b) of this title, applicable to taxable years of United States persons beginning after Dec. 31, 1995, and to the extent related to section
6048(c) of this title, applicable to distributions received after Aug. 20, 1996, see section 1901(d) ofPub. L. 104–188, set out as a note under section
6048 of this title.
Effective Date of 1976 Amendment
Amendment by Pub. L. 94–455applicable to taxable years ending after Dec. 31, 1975, but only in the case of foreign trusts created after May 21, 1974 and transfer of property to foreign trusts after May 21, 1974, see section 1013(f)(1) ofPub. L. 94–455, set out as a note under section
679 of this title.
Effective Date of 1974 Amendment
Amendment by Pub. L. 93–406applicable, except as otherwise provided in section 1017(c) through (i) ofPub. L. 93–406, for plan years beginning after Sept. 2, 1974, but, in the case of plans in existence on Jan. 1, 1974, amendment by Pub. L. 93–406applicable for plan years beginning after Dec. 31, 1975, see section 1017 ofPub. L. 93–406, set out as an Effective Date; Transitional Rules note under section
410 of this title.
The table below lists the classification updates, since Jan. 3, 2012, for this section. Updates to a broader range of sections may be found at the update page for containing chapter, title, etc.
The most recent Classification Table update that we have noticed was Tuesday, August 13, 2013
An empty table indicates that we see no relevant changes listed in the classification tables. If you suspect that our system may be missing something, please double-check with the Office of the Law Revision Counsel.
Description of Change
Statutes at Large
LII has no control over and does not endorse any external Internet site that contains links to or references LII.