Miscellaneous penalties not included in the other sections of Part 20, Chapter 1, are important tools for IRS enforcement. The IRS has a responsibility to collect the proper amount of tax revenue in the most efficient manner. In addition, penalties provide the IRS with an important tool to achieve that goal because they enhance voluntary compliance by taxpayers. See IRM 1.2.1.12.1, Policy Statement 20–1 (Formerly P-1-18), Penalties are used to enhance voluntary compliance.

IRC 856 – Definition of real estate investment trust.

IRC 1400Z-2 – Special rules for capital gains invested in opportunity zones.

IRC 5000 – Requirement to maintain minimum essential coverage.

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

IRC 6657 – Bad checks.

IRC 6673 – Sanctions and costs awarded by courts.

IRC 6674 – Fraudulent statement or failure to furnish statement to employee.

IRC 6682 – False information with respect to withholding.

IRC 6697 – Assessable penalties with respect to liability for tax of regulated investment companies.

IRC 6702 – Frivolous tax submissions.

IRC 6705 – Failure by broker to provide notice to payers.

IRC 6706 – Original issue discount information requirements.

IRC 6709 – Penalties with respect to mortgage credit certificates.

IRC 6720B – Fraudulent identification of exempt use property.

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

IRC 7268 – Possession with intent to sell in fraud of law or to evade tax.

IRC 7519 – Required payments for entities electing not to have required taxable year.

IRC 9707 – Failure to pay premium.

The Director, Business Support, is the director responsible for the servicewide civil penalty program.

Overall responsibility for civil penalty programs is assigned to OSP. OSP is a matrix organization residing in the Business Support (Small Business/Self Employed) Function. OSP is charged with coordinating policy and procedures concerning the administration of civil penalty programs, ensuring consistency with the penalty policy statement, reviewing and analyzing penalty information, researching penalty effectiveness on compliance trends, and determining appropriate action necessary to promote voluntary compliance.

Each IRS organization is responsible for establishing an internal process for managing their procedures based upon these Servicewide policies and may develop additional guidance or reference materials for their specific functional administrative needs. However, such reference material must receive approval from OSP prior to distribution and must remain consistent with the policies and general procedural requirements set forth in this IRM, Policy Statement 20-1 (e.g., Penalty Policy Statement) in IRM 1.2.1.12.1, Policy Statement 20-1 (Formerly P-1-18), Penalties are used to enhance voluntary compliance, and any other guidance relating to civil penalties.

All employees should keep the following objectives in mind when handling each penalty case:

Every function in the IRS has a role in proper penalty administration. It is essential that each function conducts its operations with an emphasis on promoting voluntary compliance. Appropriate reviews should be conducted to ensure consistency with the penalty policy statement (Policy Statement 20-1) and philosophy.

To promote the goal of consistency and fairness, OSP will review semi-annually a sample of penalty assessments, provided by SB/SE Research. See IRM 20.3.1, Civil Penalty Accuracy Review Process. The report of findings is shared with the Director, Business Support, the CFO, and other leadership as needed. The completed report is uploaded to an enterprise shared folder. Reports may be prepared when a significant issue develops, such as a correction to programming that affects many taxpayers.

Internal Management Document Certification: this IRM is annually recertified as required by Servicewide Policy, Directives, and Electronic Resources and regularly updated when new legislation or policy is published.

The table below is a list of terms and acronyms used in this IRM.

Additional forms and resources include:

In general, each penalty discussed in this IRM is unique and will stand alone unless otherwise indicated. Exceptions and additional information are noted in the discussions of the specific penalties; however, some general procedures apply.

Statute of Limitations. In general, the additions to tax, additional amounts, and assessable penalties in IRC 856 through IRC 9707 are assessed, collected, and paid in the same manner as taxes. To the extent such an item pertains to a tax return, the assessment is subject to the period of limitation in IRC 6501, Limitations on Assessment and Collection (generally, three years from the later of the due date (unextended) or the filing of the return). To the extent such an item pertains to an information return, the assessment is not subject to the period of limitation in IRC 6501; however, discretion should be used when determining the periods on which information return penalties are assessed.

Reasonable Cause. Determination as to whether or not reasonable cause exists must be based on careful consideration of the facts and circumstances of each case prior to the assertion of a penalty. Examiners should consider any reason a taxpayer provides in conjunction with the guidelines, principles, and evaluating factors identified in the IRM 20.1.1, Introduction and Penalty Relief. See IRM 20.1.1.3.2. Reasonable Cause, as well as the applicable IRC(s) and treasury regulations relating to the specific penalty.

Abatements. Information on penalty abatements and penalty reason codes (PRC) is provided in IRM 20.1.1.3, Criteria for Relief From Penalties. The first-time abate policy does not apply to the penalties in this IRM. See IRM 20.1.1.3.3.2.1, First Time Abate (FTA). Oral testimony does not apply to the penalties in this IRM.

Penalty Reason Codes. A list of penalty reason codes is provided in IRM 20.1.1-2, Penalty Reason Code Chart.

Penalty Transaction Codes. A list of penalty transaction codes is provided in IRM 20.1.1-3, Penalty Transaction Codes.

Penalty Reference Numbers. A list of penalty reference numbers (PRN) is provided in IRM 20.1.1-4, Penalty Reference Numbers (500 Series), IRM 20.1.1-5, Penalty Reference Numbers (600 Series), and in IRM 20.1.1-6, Penalty Reference Numbers (700 Series).

Campus sites and/or field compliance (field) examination functions determine when a penalty should be imposed.

Penalty reference numbers (PRN) are used to assess non-tax return related penalties (conduct or information returns).

The First-Time Abate (FTA) policy does not apply to the penalties in this IRM. See IRM 20.1.1.3.3.2.1, First Time Abate (FTA).

Oral testimony does not apply to the penalties in this IRM. See IRM 20.1.1.3.1, Unsigned or Oral Requests for Penalty Relief.

The penalty is $50,000 for each failure to meet the provisions (other than a failure under IRC 856(c)(2), (3), or (4)) to keep the tax status as a REIT.

In general, IRC 856(g)(5) is a relief provision that may (if its requirements are met) provide relief to a corporation, trust, or association that, but for this relief provision, potentially would be subject to loss of its tax status as a REIT due to one or more failures to comply with one or more of the provisions of Chapter 1, subchapter M, part II, of the Code (other than IRC 856(c)(2), (3), or (4)).

These "penalty" payments are paid by a REIT in the same manner as a tax.

The $50,000 payment(s) listed on Form 1120-REIT is (are) processed in the same manner as other taxes reported on Form 1120-REIT.

The $50,000 payment(s) under IRC 856(g)(5) is (are) not processed as a penalty, and is (are) not reported on Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties.

If relief pursuant to IRC 856(g)(5) occurs during an examination, the examiner may contact LB&I, Financial Institutions and Products, for more information on processing the payment and assessing the corresponding liability.

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Since the $50,000 payment(s) under IRC 856(g)(5) is (are) voluntary payments to maintain REIT status, there is no penalty relief for the payment(s).

If the QOF fails the investment standard, then for each month the investment standard requirement is not met, the amount of the penalty is equal to the product of the excess of the amount equal to 90 percent of the funds aggregate assets over the aggregate amount of the QOZP held by the fund, multiplied by the underpayment rate established under IRC 6621(a)(2) for such month. Refer to Form 8996, Qualified Opportunity Fund, Parts III and IV, where the investment standard can be calculated and if not met, the penalty can be calculated.

There is no maximum amount of the penalty.

For partnerships subject to the centralized partnership audit regime under the Bipartisan Budget Act of 2015 (BBA), and applicable to partnership taxable years ending on or after November 20, 2020, Treas. Reg. sections 301.6241-7(g) and 301.6241-7(h), allows the IRS to determine, notify, and impose a penalty under IRC 1400Z-2(f) outside of the centralized partnership audit regime (without regard subchapter C of chapter 63).

The penalty can be:

If the QOF is classified as a corporation for federal income tax purposes, then the corporation is liable for the penalty.

If the QOF files Form 1120S, U.S. Income Tax Return for an S Corporation, the penalty is paid at the S-Corporation level. The penalty amount impacts each shareholder’s basis by the amount determined in accordance with the S-Corporation statute and regulations.

If the QOF is operated by a partnership, then the penalty is paid at the partnership level. The penalty amount effects each partner’s basis by the amount allocated in accordance with IRC 1400Z-2(f)(2).

Assessed using PRN 693 to generate TC 240 (positive amount) or TC 241 (negative amount).

Valid for MFT 13 only.

Valid starting with the tax year 2018 and all subsequent tax years.

Not subject to deficiency procedures.

Penalty relief may be granted for failing to meet the investment standard requirement if the QOF proves it was due to reasonable cause. See IRC 1400Z-2(f)(3), and IRM 20.1.1.3, Criteria for Relief From Penalties.

Special COVID-19 Penalty Relief. Notice 2021-10, Extension of Relief for Qualified Opportunity Funds and Investors Affected by Ongoing Coronavirus Disease 2019 Pandemic, provides special penalty relief for QOFs affected by the COVID-19 pandemic.

IRC 6652(a) provides for a penalty for failure to file a statement of payment to another person for each statement where the payments total less than $10 as required under:

Treas. Reg 1.6042-2 limits the filing requirement for payments less than $10 to shareholders subject to backup withholding requirements under IRC 3406.

Treas. Reg 1.6044-2 limits the filing requirement for payments less than $10 to patrons subject to backup withholding requirements under IRC 3406.

The return should show the aggregate amount of payment(s), and the name and address of the person paid.

For purposes of this penalty, the term "dividend" means any distribution of property made by a corporation (other than a personal holding company) to its shareholders out of its earnings and profits of the taxable year and any payment made by a stockbroker to any person as a substitute for a dividend. The term "dividend" does not include any distribution or payment:

The penalty applies to the following payments by a cooperative to its patrons described in IRC 6044(b) :

The penalty does not apply to any payment:

IRC 6652(b) provides for a penalty on employees for failure to report tips, unless the failure was due to reasonable cause and not willful neglect.

The penalty is assessed on employees who fail to timely and properly report to their employer, as required by IRC 6053(a) any tips which are either:

Every employee who receives $20 or more in cash tips in any calendar month must report tips to their employer in one or more written statements. If a taxpayer works for more than one employer during a month and receives less than $20 in tips while working for each employer, no tips are required to be reported to any of the employers.

For more information about tip income, see IRM 4.19.3.18, Penalties and Interest, and IRM 4.19.15.26, Correspondence Exam Tip Program.

IRC 6652(j) provides for a penalty for failure to timely file a certification as required by IRC 142(d)(7) and IRC 42(l)(3), respectively, for:

Form 8703 is required to be filed by March 31 after the close of the calendar year that the certification is made. Form 8703 must be filed annually during the qualified project period.

Form 8610 is required to be filed by February 28 after the close of the calendar year, and accompanying Forms 8609, Low-Income Housing Credit Allocation and Certification, (with only Part I completed) and Schedules A (Form 8610) must be attached.

For the purposes of this penalty, certain residential rental projects in IRC 6652(j) means a "qualified residential rental project" described in IRC 142(d) or a "qualified low-income housing project" described in IRC 42(g). One of the following tests must be irrevocably elected for the project, and the elected test must be met during the entire relevant time period:

For the purposes of this penalty as it applies to qualified residential rental projects described in IRC 142(d), the relevant time period is the "qualified project period" beginning on the first day that 10% of the residential units are occupied and ending on the latest of the:

For the purposes of this penalty as it applies to qualified low-income buildings described in IRC 42(c)(2), the relevant time period is the 15-year "compliance period" beginning with the first taxable year of the "credit period" described in IRC 42(f). The credit period begins with the taxable year in which the building is placed in service or, at the election of the taxpayer, the succeeding taxable year.

IRC 6652(k) imposes a penalty on a qualified small business for failure to timely make a report required under IRC 1202(d)(1)(C). However, no guidance has been issued describing what should be contained in such a report.

The amount excluded from gross income depends on the date the stock was acquired and certain other factors.

For purposes of this penalty, the term "qualified small business" means any domestic corporation (C corporation) if the:

IRC 6652(l) provides for a penalty for the failure to timely file an accurate Form 8806, Information Return for Acquisition of Control or Substantial Change in Capital Structure, under IRC 6043(c), Liquidating, Etc., Transactions - Changes in Control and Recapitalizations.

A domestic corporation (the reporting corporation) must file Form 8806 to report an acquisition of control or a substantial change in the capital structure of the reporting corporation (that occurred after December 5, 2005) if the reporting corporation or any shareholder thereof is required to recognize gain (if any) under IRC 367(a), Foreign Corporations - Transfers of Property From the United States, and its regulation as a result of the transaction.

If the reporting corporation transfers all or substantially all of its assets to an acquiring corporation in a transaction that constitutes a substantial change in the capital structure of the reporting corporation and the reporting corporation does not file Form 8806, then the acquiring corporation must file Form 8806. If neither corporation files Form 8806, both corporations are jointly and severally liable for any applicable penalties.

A corporation required to file Form 8806 also must file Form 1099-CAP for certain shareholders of record who receive cash or other property (including stock) in exchange for their stock in the reporting corporation due to the acquisition of control or the substantial change in capital structure.

An acquisition of control of a corporation (first corporation) occurs if, in a transaction or series of related transactions:

A substantial change in capital structure occurs if:

Failure to file also includes the failure to satisfy the requirement to file on magnetic media as required by IRC 6011(e), Regulations Requiring Returns on Magnetic Media, Etc. and Treas. Reg. 301.6011-2, Required use of Magnetic Media.

Corporations are not required to file Form 8806:

Any broker, as defined in Treas. Reg. 1.6045-1(a)(1), that holds shares on behalf of a customer in a corporation that the broker knows or has reason to know based on readily available information has engaged in a transaction of acquisition of control or substantial change in capital structure must file Form 1099-B, Proceeds From Broker and Barter Exchange Transactions, unless the customer is an exempt recipient under Treas. Reg. 1.6045-3(b). "Readily available information" includes information from a clearing organization, such as the Depository Trust Company (DTC). See Treas. Reg. 1.6045-3. Information is also published on the IRS website at IRS.gov.

A domestic corporation that is required to file Form 8806, Information Return for Acquisition of Control or Substantial Change in Capital Structure, must file Form 1099-CAP, Changes in Corporate Control and Capital Structure, with respect to each shareholder of record, with the IRS and furnish a copy to each shareholder who receives cash, stock, or other property as a result of the acquisition of control or substantial change in capital structure and who is not an exempt recipient under Treas. Reg. 1.6043-4(b)(5). For example, if the corporation can reasonably determine that the receipt of such stock would not cause the shareholder to recognize gain (an exempt recipient), then the corporation is not required to report the fair market value of any stock provided to a shareholder. Corporations do not file Form 1099-CAP under any one of the following conditions:

Form 1099-CAP is required to be filed by February 28th (March 31, if filed electronically), unless that day falls on a Saturday, Sunday, or federal holiday, then it is due the following business day. Form 1099-CAP with respect to each shareholder must be furnished to each such shareholder by January 31, unless that day falls on a Saturday, Sunday, or federal holiday, then it is due the following business day. Form 8806 must be filed on or before the 45th day following the acquisition of control or substantial change in capital structure of the corporation, or, if earlier, on or before January 5th of the year following the calendar year in which the acquisition of control or substantial change in capital structure occurs.

Form 1099-CAP will contain the following information (and other information specified in the instructions):

Exempt Recipients. The corporation is not required to file Form 1099-CAP for the following shareholders (including brokers who are exempt):

The information returns required to be filed under this section are treated as one return.

Failure to file also includes the failure to file on magnetic media (electronically) when required.

IRC 6652(n) provides for a penalty for failure to timely make a report as required under IRC 3511, IRC 6053(c)(8), and IRC 7705.

IRC 6652(o) provides for a penalty for failure to timely provide a written notice as required under IRC 9831(d)(4).

IRC 6652(p) provides for a penalty for failure to timely provide a notice as required under IRC 83(i)(6).

Effective July 2, 2010, H.R. 5623, The Homebuyer Assistance and Improvement Act of 2010, became Public Law No 111-198 (HAIA 2010). H.R. 5623 includes Sec. 3. Application of Bad Checks Penalty to Electronic Payments. Before HAIA 2010's enactment date, bad checks penalties were not assessed on any electronic (EFTPS) payments. It amended IRC 6657 to include any “instrument in payment, by any commercially acceptable means, of any amount.” The penalty amount (rate) remains the same. The penalty rate for transactions with dates after July 1, 2010:

Effective May 25, 2007, The Small Business and Work Opportunity Tax Act of 2007 Provision 8245, increased the bad checks minimum penalty. The penalty rate for transactions with dates after May 25, 2007 and before July 2, 2010:

Penalty rate for transactions with dates after November 10, 1988 and before May 25, 2007:

Penalty rate for transactions with dates prior to November 11, 1988:

Generally, this penalty is assessed by the Campus accounting branch, using one of the following penalty transaction codes (TC):

When a check, payment, or deposit (referred to as "payment" hereafter) received by the Treasury is dishonored, the payment is reversed using the applicable dishonored payment transaction code. A dishonored payment can be identified on IDRS by the dishonored payment transaction code. The original credit transaction will also be marked with a reversal indicator (a 3 in the third position of the transaction code for IMF, or an R following the transaction code for BMF).

The following are two examples of dishonored payments as they would appear on IDRS for BMF and IMF:

When a payment is reversed only in part, the original payment will be split, with the reversed portion recorded in the module immediately before the reversing transaction, and the unreversed portion remaining where it originally posted, but reflecting only the unreversed amount. Example: An encoding error caused a $100 payment to post to a taxpayer’s account as a TC 610 for $1,000 in error. The bank honored only the $100 payment originally intended. An IRS employee improperly used TC 611 to reverse the dishonored portion of the payment. The posting of TC 611 caused the original TC 610 to split into a TC 610 for $100 and a TC 613 (or TC 610R) for $900. The TC 610 for $100 is where the TC 610 for $1,000 was, and the TC 613 (or TC 610R) for $900 is posted immediately ahead of the TC 611 for $900. TC 286 for $25 is posted following the TC 611.

A dishonored payment transaction code should not be used for a partial reversal of a payment or on the debit side of a credit transfer. Abate any TC 286 penalty that generated because of the improper use of a dishonored payment transaction code. Use TC 281 with penalty reason code 045. Also see IRM 20.1.10.7.3, Penalty Relief.

The bad checks penalty associated with the dishonored payment will be identified on Master File and IDRS as a TC 280 (manually computed and assessed penalty) or TC 286 (systemically computed and generated penalty).

A notice will be sent to the taxpayer informing them of the dishonored payment and any applicable penalty and interest assessed. The bad checks penalty notice acts to educate the taxpayer and encourage future compliance.

The taxpayer may request relief if the penalty was charged in error, or if it was reasonable to expect that the financial institution would honor the payment. Documentation that shows that it was reasonable to expect that the payment would be honored must be in writing. Oral testimony to that effect will not be accepted. The first time abate (FTA) administrative waiver does not apply. See IRM 20.1.1.3.3.2.1, First Time Abate (FTA).

If it is determined that the penalty should be abated:

If it is determined that the penalty should be sustained (not reversed):

If a determination cannot be made based on the information provided, issue Letter 0608-C, Dishonored Check or Other Form Payment Penalty Explained, to request the additional information needed to make a determination. For example, if the taxpayer provides substantiation for an account unrelated to the dishonored payment, then Letter 0608-C should be used to explain this to the taxpayer and request the corrected documentation to assist in making a reasonable cause determination. See IRM 20.1.10.7.4, Additional Penalty Relief/Reasonable Cause, for additional scenarios.

In addition to the reasons discussed in IRM 20.1.1.3, Criteria for Relief From Penalties, the following should be accepted as reasons for granting penalty relief for dishonored payments:

Generally, bad checks penalties are NOT assessed on checks or other forms of payment that have a "stop payment."

No penalty will be assessed on third party checks involving cash register seized property.

Paper checks that go through the remittance strategy for paper check conversion (RS-PCC) are converted to an electronic format, but they are still considered a paper check. They are liable for an IRC 6657, "Bad Checks" , penalty when returned unpaid by a financial institution.

Paper checks that go through the paper check conversion to an electronic format have an EFT trace number (with a "5" in the third position), but they do not have an "EFT indicator" ("EPI = E" ). The absence of an EFT indicator ensures that computer programming will not treat the dishonored check as an electronic payment and consequently will systemically assess a bad checks penalty on any RS-PCC returned unpaid by the bank.

See IRM 3.17.278, Paper Check Conversion (PCC) and Remittance Strategy Paper Check Conversion (RS-PCC) Systems.

Before July 2, 2010, bad checks penalties were not assessed on electronic funds transfer (EFT) payments.

IRC 6657, Bad Checks, only addressed the assessment of penalties for insufficient funds on paper checks or money orders. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

These other forms of payment made on the Electronic Federal Tax Payment System (EFTPS) included:

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IRC 6673(a) provides for procedures for the Tax Court to award sanctions and costs to the IRS when the taxpayer:

IRC 6673(a) also allows the Tax Court to award sanctions and costs to the IRS 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:

IRC 6673(b) establishes procedures under IRC 7433, Civil Damages for Certain Unauthorized Collection Actions, for the district court to award monetary sanctions, penalties, or costs to the United States when the taxpayer files a frivolous or baseless civil suit for damages against the United States. The taxpayer must groundlessly contend that an officer or employee of the IRS recklessly, intentionally, or by reason of negligence, disregarded provisions and regulations concerning the collection of federal tax, and bring a civil action for damages against the United States in a district court of the United States.

This award is issued from a district court, and could include the:

A certified copy of an order awarding any monetary sanctions, penalties, or court costs by a court of appeals may be registered in a district court and be enforceable as other district court judgments.

For more information, see IRM 25.3, Civil Damages for Certain Unauthorized Collection Actions.

The penalty is $50 for each failure. The penalty can be assessed and collected in the same manner as the tax on employers imposed by IRC 3111.

The penalty is:

When firm indications of willful failure to furnish or willful furnishing of false or fraudulent statements are discovered, the investigating office will suspend the inquiry and refer the matter to the Criminal Investigation function. See IRM 25.1, Fraud Handbook.

Penalty relief is not given for reasonable cause. If the taxpayer wants to contest the penalty assessment, the taxpayer must fully pay the entire penalty and then file a claim for refund with the IRS.

The penalty is $500 for each false statement.

The penalty is:

The penalty may be waived (in whole or in part) if the individual's taxes for that year are equal to or less than the sum of the:

Penalty relief may be granted if there was reasonable basis for the statement at the time the statement was made.

For purposes of computing interest, the allowance of a deficiency dividend deduction creates a deemed increase in tax under IRC 860(c)(1).

Interest is due on the deemed increase in tax for the taxable year from the original filing date of Form 1120-RIC, U.S. Income Tax Return For Regulated Investment Companies, to the date Form 976, Claim for Deficiency Dividends Deductions by a Personal Holding Company, Regulated Investment Company, or Real Estate Investment Trust, is filed.

For taxable years before its repeal, the IRC 6697 penalty is equal to the amount of interest calculated in (2) above, but may not exceed 50% of the deficiency dividend deduction for the taxable year.

If the RIC claiming a deficiency dividends deduction is under examination (and the taxable year predates the repeal of IRC 6697), the exam team will generally assess the penalty using Form 8278 and filing the paperwork with Centralized Case Processing (CCP). The exam team may work with LB&I Financial Institutions and Products.

If the RIC claiming a deficiency dividends deduction is not under examination (and the taxable year predates the repeal of IRC 6697), (generally) the LB&I Financial Institutions and Products, will assert the penalty.

A RIC may make a self-determination under IRC 860(e)(4) by filing Form 8927, Determination Under Section 860(e)(4) by a Qualified Investment Entity, to initiate the deficiency dividends procedures and then file Form 976.

The penalty is:

Since the deficiency dividend procedure is voluntary, there is no penalty relief for reasonable cause.

IRC 6702(a) provides for a penalty against persons who file what purports to be a return that does not contain information on which the correctness of the self-assessment may be judged, or contains information that on its face indicates the self-assessment is incorrect, and if either of the following apply:

For returns filed after March 15, 2007, the penalty is not limited to income tax returns. It may be asserted on any tax return required to be filed by the Internal Revenue Code, such as employment, excise, estate and gift, etc. The penalty is applicable to any initial return or amended tax return filed after March 15, 2007.

The term "persons" applies to entities as well as individuals.

IRC 6702(b) provides for a penalty against anyone who submits a frivolous position on one of the following specific submissions:

A taxpayer will be subject to the penalty under IRC 6702(b) for making any of these specified submissions, if the submission:

IRC 6702(d) authorizes the reduction of the frivolous tax submission penalties assessed under IRC 6702 if it is determined that a reduction would promote compliance with and administration of the federal tax laws. Rev. Proc. 2012-43 (effective November 5, 2012) allows a reduction of all unpaid IRC 6702 penalties to $500 if a taxpayer meets specific eligibility requirements.

Rev. Proc. 2012-43 describes the limited circumstances in which a taxpayer may be eligible for a one-time reduction of unpaid IRC 6702 penalties.

A taxpayer requesting a reduction who has not fully paid a $5,000 penalty assessed by the IRS under IRC 6702 may qualify for a reduction of the penalty pursuant to IRC 6702(d).

FRP administers the reduction of frivolous submissions under IRC 6702(d). See IRM 25.25.10.10, Reduction of the Frivolous Return Penalty IRC 6702(d).

The penalty is $500 per failure by the broker to provide the notice to the payor.

The penalty is:

Penalty relief is not granted for reasonable cause. If a taxpayer wants to contest the penalty assessment, the taxpayer must fully pay the entire penalty and then file a claim for refund with the IRS.

IRC 6706(a) provides for a penalty for the failure to show the information required under IRC 1275(c)(1), Other Definitions and Special Rules, Information Requirements, Information Required to be Set Forth on Instrument, on a debt instrument having original issue discount (OID).

Under Treas. Reg. 1.1275-3(b), in the case of any debt instrument having OID and that is issued in physical form and that is not publicly offered, the following information must be shown on the debt instrument:

However, instead of the information listed in (b) through (f) above, the issuer can provide the name or title and either the address or phone number of a representative of the issuer who will make this information available to a holder upon request.

Under Treas. Reg. 1.1275-3(b)(4) and (d), this legending requirement does not apply to:

An issuer may satisfy these requirements by legending the debt instrument when it is first issued in physical form. Legending is not required, however, before the first holder of the debt instrument disposes of the instrument.

IRC 6706(b) provides for a penalty for failing to timely furnish Form 8281, Information Return for Publicly Offered Original Issue Discount Instruments, required under IRC 1275(c)(2), Information Required to be Submitted to Secretary.

An issuer of a publicly offered debt instrument (obligation) having original issue discount (OID), such as a bond, debenture, or note, must submit Form 8281. Form 8281 must be filed:

Publicly offered debt instruments also may include:

Exceptions. The form is not required to be filed for the following:

IRC 6709(a) provides for a penalty for making a material and negligent misstatement in any verified written statement made under penalties of perjury with respect to the issuance of a mortgage credit certificate.

IRC 6709(b) provides for a penalty if a misstatement described in subsection (a)(1) is due to fraud on the part of the person making the misstatement.

IRC 6709(c) provides for a penalty for failure timely to file a report with respect to any mortgage credit certificates required by IRC 25(g), Reporting Requirements.

Any person (lender) who makes a loan that is a "certified indebtedness amount" on any mortgage credit certificate (MCC) must maintain books and records of such activity and file Form 8329, Lender's Information Return for Mortgage Credit Certificates (MCCs). The lender must provide IRS with information regarding the issuance of MCCs under IRC 25, Interest on Certain Home Mortgages, containing:

Form 8329 is due by January 31 following the close of the calendar year in which the lender made certified indebtedness loans. A separate Form 8329 must be filed for each issue of MCCs for which the lender made mortgage loans during the calendar year.

Each issuer (states and political subdivisions) of MCCs are to provide IRS with information required by IRC 25 and Treas. Reg. 1.25-8T(b).

Form 8330, Issuer's Quarterly Information Return for Mortgage Credit Certificates (MCCs), must be filed on a quarterly basis beginning with the quarter of the calendar year in which the election was made.

The penalty is $10,000 for each identification made after August 17, 2006.

The penalty is:

Penalty relief is not given for reasonable cause. If the taxpayer wants to contest the penalty assessment, the taxpayer must fully pay the entire penalty and then file a claim for refund with the IRS.

The penalty is $250 for each failure to notify the employer, plan, or issuer of eligibility for Medicare or any other group health plan as required for individuals receiving ARP COBRA premium assistance.

If the failure to provide notice if fraudulent, the penalty will be the greater of $250 or 110 percent of the COBRA premium assistance improperly received.

The penalty will not apply if the individual’s failure to provide notice was due to reasonable cause and not to willful neglect.

The penalty is:

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

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The examiner's supervisor must approve all penalty determinations (assertions and non-assertions).

The penalty is $500 or not less than double the amount of taxes illegally evaded.

The penalty is administered by the Alcohol and Tobacco Tax and Trade Bureau (TTB).

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A penalty of 10% of the underpayment is required if the required payment is not made on or before May 15.

For purposes of this penalty, the term "underpayment" means the remainder of the amount of the required payment after it is subtracted from the payment (if any) made on or before the due date.

If the penalty is for negligence and/or fraud penalties, then the payment will be treated as a tax. See IRC 7519(f)(4)(B).

The penalty is systemically assessed as TC 246 (or systemically abated as TC 247) with PRN 684.

The 10% penalty may be manually assessed if it is not systemically generated when the return posts.

The 10% penalty may be manually abated by inputting TC 290 for .00 ( MFT 15) and PRN 684 with the amount to be reversed.

Penalty relief may be granted if the partnership or S corporation proves that its failure to timely make the required payment was due to reasonable cause and not willful neglect.

The First-Time Abate policy does not apply to this penalty.

Oral testimony does not apply to this penalty.

The penalty is $100 per day beginning on the due date of the premiums or installments and ending on the date of payment for each failure.

There is no maximum limitation. The penalty continues to accrue until the premium or installment is fully paid.

The officers of the benefit or pension plans are responsible for notifying the Internal Revenue Service of any delinquency.

The Department of the Interior-Office of Surface Mining will contact LB&I Corporate Issues/Credits, Credits/Penalties with any penalty referrals.

The penalty is asserted using PRN 593.

No penalty shall be imposed on any failure during any period for which it is established that none of the persons responsible for such failure knew, or exercising reasonable diligence would have known, that such failure existed. See IRC 9707(d)(1).

Under IRC 9707(d)(2), penalty relief will be given if the taxpayer:

Penalty relief may be given if the taxpayer proves the failure is due to reasonable cause and not to willful neglect, all or part of the penalty may be waived for failures to the extent that the payment of such penalty would be excessive relative to the failure involved. See IRC 9707(d)(3).