Title 26 — Internal Revenue Code

Part I · Chapter 68 — Additions to the Tax, Additional Amounts, and Assessable Penalties

§ 6703. Rules applicable to penalties under sections 6700, 6701, and 6702

Statutory text

Burden of proof

In any proceeding involving the issue of whether or not any person is liable for a penalty under section 6700, 6701, or 6702, the burden of proof with respect to such issue shall be on the Secretary.

Deficiency procedures not to apply

Subchapter B of chapter 63 (relating to deficiency procedures) shall not apply with respect to the assessment or collection of the penalties provided by sections 6700, 6701, and 6702.

Extension of period of collection where person pays 15 percent of penalty

In general

If, within 30 days after the day on which notice and demand of any penalty under section 6700 or 6701 is made against any person, such person pays an amount which is not less than 15 percent of the amount of such penalty and files a claim for refund of the amount so paid, no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until the 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).

Person must bring suit in district court to determine his liability for penalty

If, within 30 days after the day on which his claim for refund of any partial payment of any penalty under section 6700 or 6701 is denied (or, if earlier, within 30 days after the expiration of 6 months after the day on which he filed the claim for refund), the person fails to begin a proceeding in the appropriate United States district court 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 applicable 30-day period referred to in this paragraph.

Suspension of running of period of limitations on collection

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.

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1982
Pub. L. 97–248 title III § 322(a) · 96 Stat. 324
Enacted · 26 U.S.C. § 6703
Added Pub. L. 97–248, title III, § 322(a), Sept. 3, 1982, 96 Stat. 612
Source evidence
Code source credit
Added Pub. L. 97–248, title III, § 322(a), Sept. 3, 1982, 96 Stat. 612
Enacted provision · exact public law section
(a) General Rule.— Subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new section: “SEC. 6703. RULES APPLICABLE TO PENALTIES UNDER SECTIONS 6700, 6701, AND 6702. “(a) Burden of Proof.— In any proceeding involving the issue of whether or not any person is liable for a penalty under section 6700, 6701, or 6702, the burden of proof with respect to such issue shall be on the Secretary. “(b) Deficiency Procedures Not to Apply.— Subchapter B of chapter 63 (relating to deficiency procedures) shall not apply with respect to the assessment or collection of the penalties provided by sections 6700, 6701, and 6702. “(c) Extension of Period of Collection Where Person Pays 15 Percent of Penalty.— “(1) In general.— If, within 30 days after the day on which notice and demand of any penalty under section 6700, 6701, or 6702 is made against any person, such person pays an amount which is not less than 15 percent of the amount of such penalty and files a claim for refund of the amount so paid, no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until the 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. “(2) Person must bring suit in district court to determine his liability for penalty.— If, within 30 days after the day on which his claim for refund of any partial payment of any penalty under section 6700, 6701, or 6702 is denied (or, if earlier, within 30 days after the expiration of 6 months after the day on which he filed the claim for refund), the person fails to begin a proceeding in the appropriate United States district court 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 applicable 30-day period referred to in this paragraph. “(3) Suspension of running of period of limitations on collection.— 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.”
1989
Improved Penalty Administration and Compliance Tax Act
Pub. L. 101–239 § 7737(a) · 103 Stat. 2106
Inserted · 26 U.S.C. § 6703(c)(1)
Pub. L. 101–239, § 7737(a), inserted at end “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).”
Source evidence
Code amendment note
Subsec. (c)(1). Pub. L. 101–239, § 7737(a), inserted at end “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).”
Enacted provision · exact public law section
(a) General Rule.— Sections 6672(b)(1), 6694(c)(1), and 6703(c)(1) are each amended by adding at the end thereof the following new sentence: “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).”
Effective date note
Pub. L. 101–239, title VII, § 7736(b), Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendment made by subsection (a) [amending this section] shall apply to returns filed after December 31, 1989.”
1989
Improved Penalty Administration and Compliance Tax Act
Pub. L. 101–239 § 7736(a) · 103 Stat. 2106
Substituted · 26 U.S.C. § 6703(c)(1)
Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”
Target inherited from the preceding amendment note.
Source evidence
Code amendment note
Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”.
Enacted provision · exact public law section
(a) Requirement of Full Payment of Penalty.— Subsection (c) of section 6703 is amended by striking “section 6700, 6701, or 6702” each place it appears and inserting “section 6700 or 6701”.
Effective date note
Pub. L. 101–239, title VII, § 7736(b), Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendment made by subsection (a) [amending this section] shall apply to returns filed after December 31, 1989.”
1989
Improved Penalty Administration and Compliance Tax Act
Pub. L. 101–239 § 7736(a) · 103 Stat. 2106
Substituted · 26 U.S.C. § 6703(c)(2)
Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”
Source evidence
Code amendment note
Subsec. (c)(2). Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”.
Enacted provision · exact public law section
(a) Requirement of Full Payment of Penalty.— Subsection (c) of section 6703 is amended by striking “section 6700, 6701, or 6702” each place it appears and inserting “section 6700 or 6701”.
Effective date note
Pub. L. 101–239, title VII, § 7736(b), Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendment made by subsection (a) [amending this section] shall apply to returns filed after December 31, 1989.”

4 of 4 references resolved to an enrolled provision

Editorial Notes

Amendments

1989—Subsec. (c)(1). Pub. L. 101–239, § 7737(a), inserted at end “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).”

Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”.

Subsec. (c)(2). Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”.

Statutory Notes and Related Subsidiaries

Effective Date of 1989 Amendment

Pub. L. 101–239, title VII, § 7736(b), Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendment made by subsection (a) [amending this section] shall apply to returns filed after December 31, 1989.”

Effective Date

Pub. L. 97–248, title III, § 322(c), Sept. 3, 1982, 96 Stat. 613, 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].”

Credits

1982–1989 · 2 acts

1982Added Pub. L. 97–248, title III, § 322(a), Sept. 3, 1982, 96 Stat. 612
1989amended Pub. L. 101–239, title VII, §§ 7736(a), 7737(a), Dec. 19, 1989, 103 Stat. 2404.

Show as published

(Added Pub. L. 97–248, title III, § 322(a), Sept. 3, 1982, 96 Stat. 612; amended Pub. L. 101–239, title VII, §§ 7736(a), 7737(a), Dec. 19, 1989, 103 Stat. 2404.)