26 U.S.C. § 6677 — Failure to file information with respect to certain foreign trusts
submitted 64 years ago by Pub. L. 87-834 to r/title-26-INTERNAL-REVENUE-CODE · 475 words · no verdicts yet
A person who fails to file required information about certain foreign trusts, files late, or files incomplete or incorrect information generally owes at least $10,000 and may owe additional monthly penalties. Reasonable cause can excuse a failure, but a foreign country’s penalty for disclosure is not reasonable cause.
(a) Civil penalty. For a notice or return required by section 6048, the required filer owes the greater of $10,000 or 35 percent of the gross reportable amount if it is late, missing, incomplete, or incorrect. If the failure continues more than 90 days after the Secretary* mails notice, the person owes an additional $10,000 for each 30-day period or part of one after that 90-day period. Once the Secretary can determine the gross reportable amount, later penalties must be reduced so their total does not exceed that amount; any excess already paid must be refunded. (b) Returns under section 6048(b). The United States person* named there is liable, and “35 percent” is replaced by “5 percent.” (c) Gross reportable amount. It means (1) for section 6048(a), the gross value of the property involved on the event date; (2) for section 6048(b)(1), the gross value at year-end of the trust assets treated as owned by the United States person; and (3) for section 6048(c), the gross distributions. (d) Reasonable cause. No penalty applies when the failure was caused by reasonable cause and not willful neglect. A foreign jurisdiction’s civil or criminal penalty for disclosure is not reasonable cause. (e) Deficiency* procedures. The deficiency procedures in subchapter B of chapter 63 do not apply to assessment or collection of this 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 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*).
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”.
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).
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.
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).
Source credit: (Added Pub. L. 87–834, § 7(g), Oct. 16, 1962, 76 Stat. 988; amended Pub. L. 91–172, title I, § 101(j)(53), Dec. 30, 1969, 83 Stat. 531; Pub. L. 93–406, title II, § 1016(a)(21), Sept. 2, 1974, 88 Stat. 931; Pub. L. 94–455, title X, § 1013(d)(2), Oct. 4, 1976, 90 Stat. 1616; Pub. L. 104–188, title I, § 1901(b), Aug. 20, 1996, 110 Stat. 1907; Pub. L. 111–147, title V, § 535(a), Mar. 18, 2010, 124 Stat. 115.)
- 1962Enacted · Pub. L. 87-834 · 76 Stat. 988
- 1969Amended · Pub. L. 91-172 · 83 Stat. 531
- 1974Amended · Pub. L. 93-406 · 88 Stat. 931
- 1976Amended · Pub. L. 94-455 · 90 Stat. 1616
- 1996Amended · Pub. L. 104-188 · 110 Stat. 1907
- 2010Amended · Pub. L. 111-147 · 124 Stat. 115
A history note hasn’t been published yet. The record shows enactment by Pub. L. 87-834 on 1962-10-16.
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