(a) Imposition of penaltyAny 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(1) In generalExcept 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).
(2) Maximum penaltyThe amount of the penalty under subsection (a) with respect to any reportable transaction shall not exceed—(A) in the case of a listed transaction, $200,000 ($100,000 in the case of a natural person), or
(B) in the case of any other reportable transaction, $50,000 ($10,000 in the case of a natural person).
(3) Minimum penaltyThe 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) DefinitionsFor purposes of this section:(1) Reportable transactionThe 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.
(2) Listed transactionThe 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(1) In generalThe Commissioner of Internal Revenue may rescind all or any portion of any penalty imposed by this section with respect to any violation if—(A) the violation is with respect to a reportable transaction other than a listed transaction, and
(B) rescinding the penalty would promote compliance with the requirements of this title and effective tax administration.
(2) No judicial appealNotwithstanding any other provision of law, any determination under this subsection may not be reviewed in any judicial proceeding.
(3) RecordsIf a penalty is rescinded under paragraph (1), the Commissioner shall place in the file in the Office of the Commissioner the opinion of the Commissioner with respect to the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) a statement of the facts and circumstances relating to the violation,
(B) the reasons for the rescission, and
(C) the amount of the penalty rescinded.
(e) Penalty reported to SECIn the case of a person—(1) 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
(2) which—(A) is required to pay a penalty under this section with respect to a listed transaction,
(B) is required to pay a penalty under section 6662A with respect to any reportable transaction at a rate prescribed under section 6662A(c), or
(C) 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 penaltiesThe penalty imposed by this section shall be in addition to any other penalty imposed by this title.
Structure US Code
Title 26— INTERNAL REVENUE CODE
Subtitle F— Procedure and Administration
CHAPTER 68— ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES
Subchapter B— Assessable Penalties
§ 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
§ 6679. Failure to file returns, etc., with respect to foreign corporations or foreign partnerships
§ 6682. False information with respect to withholding
§ 6684. Assessable penalties with respect to liability for tax under chapter 42
§ 6686. Failure to file returns or supply information by DISC or former FSC
§ 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
§ 6692. Failure to file actuarial report
§ 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
§ 6695A. Substantial and gross valuation misstatements attributable to incorrect appraisals
§ 6696. Rules applicable with respect to sections 6694, 6695, and 6695A
§ 6698. Failure to file partnership return
§ 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
§ 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.
§ 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