(1)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,
(2)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
(3)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
(1) In general
Except as provided in paragraph (2), the amount of the penalty imposed by subsection (a) shall be $1,000.
If the return, affidavit, claim, or other document relates to the tax liability of a corporation, the amount of the penalty imposed by subsection (a) shall be $10,000.
(3) Only 1 penalty per person per period
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
(1) In general
For purposes of subsection (a), the term “procures” includes—
(A)ordering (or otherwise causing) a subordinate to do an act, and
(B)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
(1) In general
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.
(2) Coordination with return preparer penalties
No penalty shall be assessed under subsection (a) or (b) ofsection
6694 on any person with respect to any document for which a penalty is assessed on such person under subsection (a).
(3) Coordination with section
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).
Pub. L. 101–239, title VII, § 7735(c),Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendments made by this section [amending this section] shall take effect on December 31, 1989.”
Pub. L. 97–248, title III, § 324(c),Sept. 3, 1982, 96 Stat. 616, provided that: “The amendments made by this section [enacting this section] shall take effect on the day after the date of the enactment of this Act [Sept. 3, 1982].”
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
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