26 U.S.C. § 6672 — Failure to collect and pay over tax, or attempt to evade or defeat tax
submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 978 words · no verdicts yet
A person responsible for collecting and paying over a tax who willfully fails to do so, or willfully tries to evade the tax or its payment, owes a penalty equal to the amount involved. The section also sets notice, collection, contribution, and a limited volunteer-board exception.
(a) General rule. A person required to collect, accurately account for, and pay over a tax imposed by this title is liable for a penalty equal to the total tax that the person willfully evaded, failed to collect, or failed to account for and pay over. This is in addition to other penalties. No penalty under section 6653 or part II of subchapter A of chapter 68 applies to an offense covered by this section.
(b) Preliminary notice requirement. (1) The Secretary* may not impose the subsection (a) penalty unless the Secretary notifies the taxpayer* in writing by mail, at an address determined under section 6212(b), or notifies the taxpayer in person that the taxpayer will be subject to an assessment. (2) The mailed or personal notice must come at least 60 days before any notice and demand for the penalty. (3) If the notice is mailed or delivered before the section 6501 assessment period ends, that period cannot end before the later of 90 days after the notice or, if the proposed assessment is timely protested, 30 days after the Secretary makes a final administrative decision on the protest. (4) These notice rules do not apply if the Secretary finds that collecting the penalty is in jeopardy.
(c) Extension of period of collection where bond is filed. (1) Within 30 days after notice and demand, a person may prevent collection of the rest of the penalty until the related court case ends by paying at least the minimum amount needed to start a court proceeding about liability, filing a refund claim for that payment, and giving the required bond. The prohibition does not prevent a counterclaim for the rest of the penalty. A court may enjoin a levy* or proceeding begun during the prohibition, despite section 7421(a). (2) If the refund claim is denied and the person does not start a case in the proper United States district court or Court of Federal Claims within 30 days, the protection ends the next day. (3) The bond must have the form and sureties set by the Secretary’s regulations and equal 1.5 times the excess of the assessed penalty over the payment. (4) The section 6502 collection period is suspended while the Secretary is prohibited from collecting. (5) A finding that collection is in jeopardy permits immediate collection.
(d) Right of contribution where more than 1 person liable for penalty. If more than one person owes the penalty for a tax, a person who paid it may recover from the other liable persons the amount paid above that person’s proportional share. The claim must be brought separately; it may not be joined or consolidated with (1) a United States action to collect the penalty or (2) a proceeding in which the United States files a counterclaim or third-party complaint to collect it.
(e) Exception for voluntary board members of tax-exempt organizations. Subsection (a) does not impose a penalty on an unpaid volunteer member of the board of trustees or directors of an organization exempt under subtitle A if the member serves only in an honorary role, does not take part in daily or financial operations, and does not actually know about the failure. This exception does not apply if it would leave no person liable for the penalty.
Any person required to collect, truthfully account for, and pay over any tax imposed by this title who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. No penalty shall be imposed under section 6653 or part II of subchapter A of chapter 68 for any offense to which this section is applicable.
No penalty shall be imposed under subsection (a) unless the Secretary* notifies the taxpayer* in writing by mail to an address as determined under section 6212(b) or in person that the taxpayer shall be subject to an assessment of such penalty.
The mailing of the notice described in paragraph (1) (or, in the case of such a notice delivered in person, such delivery) shall precede any notice and demand of any penalty under subsection (a) by at least 60 days.
If a notice described in paragraph (1) with respect to any penalty is mailed or delivered in person before the expiration of the period provided by section 6501 for the assessment of such penalty (determined without regard to this paragraph), the period provided by such section for the assessment of such penalty shall not expire before the later of—
the date 90 days after the date on which such notice was mailed or delivered in person, or
if there is a timely protest of the proposed assessment, the date 30 days after the Secretary makes a final administrative determination with respect to such protest.
This subsection shall not apply if the Secretary finds that the collection of the penalty is in jeopardy.
If, within 30 days after the day on which notice and demand of any penalty under subsection (a) is made against any person, such person—
pays an amount which is not less than the minimum amount required to commence a proceeding in court with respect to his liability for such penalty,
files a claim for refund of the amount so paid, and
furnishes a bond which meets the requirements of paragraph (3),
no levy* or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421(a), the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court. Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of such penalty in a proceeding begun as provided in paragraph (2).
If, within 30 days after the day on which his claim for refund with respect to any penalty under subsection (a) is denied, the person described in paragraph (1) fails to begin a proceeding in the appropriate United States district court (or in the Court of Federal Claims) for the determination of his liability for such penalty, paragraph (1) shall cease to apply with respect to such penalty, effective on the day following the close of the 30-day period referred to in this paragraph.
The bond referred to in paragraph (1) shall be in such form and with such sureties as the Secretary may by regulations prescribe and shall be in an amount equal to 1½ times the amount of excess of the penalty assessed over the payment described in paragraph (1).
The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court in respect of any penalty described in paragraph (1) shall be suspended for the period during which the Secretary is prohibited from collecting by levy or a proceeding in court.
If the Secretary makes a finding that the collection of the penalty is in jeopardy, nothing in this subsection shall prevent the immediate collection of such penalty.
If more than 1 person is liable for the penalty under subsection (a) with respect to any tax, each person who paid such penalty shall be entitled to recover from other persons who are liable for such penalty an amount equal to the excess of the amount paid by such person over such person’s proportionate share of the penalty. Any claim for such a recovery may be made only in a proceeding which is separate from, and is not joined or consolidated with—
an action for collection of such penalty brought by the United States, or
a proceeding in which the United States files a counterclaim or third-party complaint for the collection of such penalty.
No penalty shall be imposed by subsection (a) on any unpaid, volunteer member of any board of trustees or directors of an organization exempt from tax under subtitle A if such member—
is solely serving in an honorary capacity,
does not participate in the day-to-day or financial operations of the organization, and
does not have actual knowledge of the failure on which such penalty is imposed.
The preceding sentence shall not apply if it results in no person being liable for the penalty imposed by subsection (a).
Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 828; Pub. L. 95–628, § 9(a), Nov. 10, 1978, 92 Stat. 3633; Pub. L. 101–239, title VII, §§ 7721(c)(9), 7737(a), Dec. 19, 1989, 103 Stat. 2400, 2404; Pub. L. 104–168, title IX, §§ 901(a), 903(a), 904(a), July 30, 1996, 110 Stat. 1465–1467; Pub. L. 105–206, title III, § 3307(a), (b), July 22, 1998, 112 Stat. 744; Pub. L. 115–141, div. U, title IV, § 401(a)(325)(D), Mar. 23, 2018, 132 Stat. 1200.)
- 1954Enacted · Act of Aug. 16, 1954, ch. 736
- 1978Amended · Pub. L. 95-628 · 92 Stat. 3633
- 1989Amended · Pub. L. 101-239 · 103 Stat. 2400, 2404
- 1996Amended · Pub. L. 104-168 · 110 Stat. 1465
- 1998Amended · Pub. L. 105-206 · 112 Stat. 744
- 2018Amended · Pub. L. 115-141 · 132 Stat. 1200
A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.
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