§ 6723. Failure to comply with other information reporting requirements

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.

1. 1986

   Tax Reform Act of 1986

   Pub. L. 99–514 title XV § 1501(a) · 100 Stat. 2085

   Enacted · 26 U.S.C. § 6723

   Added Pub. L. 99–514, title XV, § 1501(a), Oct. 22, 1986, 100 Stat. 2733

   Source evidence

   Code source credit
   Added Pub. L. 99–514, title XV, § 1501(a), Oct. 22, 1986, 100 Stat. 2733

   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 part: “PART II— FAILURE TO FILE CERTAIN INFORMATION RETURNS OR STATEMENTS “Sec. 6721. Failure to file certain information returns. “Sec. 6722. Failure to furnish certain payee statements. “Sec. 6723. Failure to include correct information. “Sec. 6724. Waiver; definitions and special rules. “SEC. 6721. FAILURE TO FILE CERTAIN INFORMATION RETURNS. “(a) General Rule.— In the case of each failure to file an information return with the Secretary on the date prescribed therefor (determined with regard to any extension of time for filing), the person failing to so file such return shall pay $50 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $100,000. “(b) Penalty in Case of Intentional Disregard.— If 1 or more failures to which subsection (a) applies are due to intentional disregard of the filing requirement, then, with respect to each such failure— “(1) the penalty imposed under subsection (a) shall be $100, or, if greater— “(A) in the case of a return other than a return required under section 6045(a), 6041A(b), 6050H, 6050J, 6050K, or 6050L, 10 percent of the aggregate amount of the items required to be reported, or “(B) in the case of a return required to be filed by section 6045(a), 6050K, or 6050L, 5 percent of the aggregate amount of the items required to be reported, and “(2) in the case of any penalty determined under paragraph (1)— “(A) the $100,000 limitation under subsection (a) shall not apply, and “(B) such penalty shall not be taken into account in applying the $100,000 limitation to penalties not determined under paragraph (1). “SEC. 6722. FAILURE TO FURNISH CERTAIN PAYEE STATEMENTS. “(a) General Rule.— In the case of each failure to furnish a payee statement on the date prescribed therefor to the person to whom such statement is required to be furnished, the person failing to so furnish such statement shall pay $50 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $100,000. “(b) Failure To Notify Partnership of Exchange of Partnership Interest.— In the case of any person who fails to furnish the notice required by section 6050K(c)(1) on the date prescribed therefor, such person shall pay a penalty of $50 for each such failure. “SEC. 6723. FAILURE TO INCLUDE CORRECT INFORMATION. “(a) General Rule.— If— “(1) any person files an information return or furnishes a payee statement, and “(2) such person does not include all of the information required to be shown on such return or statement or includes incorrect information, such person shall pay $5 for each return or statement with respect to which such failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $20,000. “(b) Penalty in Case of Intentional Disregard.— If 1 or more failures to which subsection (a) applies are due to intentional disregard of the correct information reporting requirement, then, with respect to each such failure— “(1) the penalty imposed under subsection (a) shall be $100, or, if greater— “(A) in the case of a return other than a return required under section 6045(a), 604IA(b), 6050H, 6050J, 6050K, or 6050L, 10 percent of the aggregate amount of the items required to be reported correctly, or “(B) in the case of a return required to be filed by section 6045(a), 6050K, or 6050L, 5 percent of the aggregate amount of the items required to be reported correctly, and “(2) in the case of any penalty determined under paragraph (1)— “(A) the $20,000 limitation under subsection (a) shall not apply, and “(B) such penalty shall not be taken into account in applying the $20,000 limitation to penalties not determined under paragraph (1). “(c) Coordination With Section 6676.— No penalty shall be imposed under subsection (a) or (b) with respect to any return or statement if a penalty is imposed under section 6676 (relating to failure to supply identifying number) with respect to such return or statement. “SEC. 6724. WAIVER; DEFINITIONS AND SPECIAL RULES. “(a) Reasonable Cause Waiver.— No penalty shall be imposed under this part with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect. “(b) Payment of Penalty.— Any penalty imposed by this part shall be paid on notice and demand by the Secretary and in the same manner as tax. “(c) Special Rules for Failure To File Interest and Dividend Returns or Statements.— “(1) Higher standards for waiver.— In the case of any interest or dividend return or statement— “(A) subsection (a) shall not apply, but “(B) no penalty shall be imposed under this part if it is shown that the person otherwise liable for such penalty exercised due diligence in attempting to satisfy the requirement with respect to such return or statement. “(2) Limitations not to apply.— In the case of any interest or dividend return or statement— “(A) the $100,000 limitations of sections 6721(a) and 6722(a) and the $20,000 limitation of section 6723(a) shall not apply (and any penalty imposed on any failure involving such a return or statement shall not be taken into account in applying such limitations to other penalties), and “(B) penalties imposed with respect to such returns or statements shall not be taken into account for purposes of applying such limitations with respect to other returns or statements. “(3) Self assessment.— Any penalty imposed under this part on any person with respect to an interest or dividend return or statement— “(A) shall be assessed and collected in the same manner as an excise tax imposed by subtitle D, and “(B) shall be due and payable on April 1 of the calendar year following the calendar year for which such return or statement is required. “(4) Deficiency procedures not to apply.— 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 under this part with respect to an interest or dividend return or statement. “(5) Interest or dividend return or statement.— For purposes of this subsection, the term ‘interest or dividend return or statement’ means— “(A) any return required by section 6042(a)(1), 6044(a)(1), or 6049(a), and “(B) any statement required under section 6042(c), 6044(e), or 6049(c). “(d) Definitions.— For purposes of this part— “(1) Information return.— The term ‘information return’ means— “(A) any statement of the amount of payments to another person required by— “(i) section 6041 (a) or (b) (relating to certain information at source), “(ii) section 6042(a)(1) (relating to payments of dividends), “(iii) section 6044(a)(1) (relating to payments of patronage dividends), “(iv) section 6049(a) (relating to payments of interest), “(v) section 6050A(a) (relating to reporting requirements of certain fishing boat operators), “(vi) section 6050N(a) (relating to payments of royalties), or “(vii) section 6051(d) (relating to information returns with respect to income tax withheld), and “(B) any return required by— “(i) section 4997(a) (relating to information with respect to windfall profit tax on crude oil), “(ii) section 6041A (a) or (b) (relating to returns of direct sellers), “(iii) section 6045 (a) or (d) (relating to returns of brokers), “(iv) section 6050H(a) (relating to mortgage interest received in trade or business from individuals), “(v) section 60501(a) (relating to cash received in trade or business), “(vi) section 6050J(a) (relating to foreclosures and abandonments of security), “(vii) section 6050K(a) (relating to exchanges of certain partnership interests), “(viii) section 60501(a) (relating to returns relating to certain dispositions of donated property), “(ix) section 6052(a) (relating to reporting payment of wages in the form of group-term life insurance), or “(x) section 6053(c)(1) (relating to reporting with respect to certain tips). “(2) Payee statement.— The term ‘payee statement’ means any statement required to be furnished under— “(A) section 4997(a) (relating to records and information; regulations), “(B) section 6031(b), 6034A, or 6037(b) (relating to statements furnished by certain pass-thru entities), “(C) section 6039(a) (relating to information required in connection with certain options), “(D) section 6041(d) (relating to information at source), “(E) section 6041A(e) (relating to returns regarding payments of remuneration for services and direct sales), “(F) section 6042(c) (relating to returns regarding payments of dividends and corporate earnings and profits), “(G) section 6044(e) (relating to returns regarding payments of patronage dividends), “(H) section 6045 (b) or (d) (relating to returns of brokers), “(I) section 6049(c) (relating to returns regarding payments of interest), “(J) section 6050A(b) (relating to reporting requirements of certain fishing boat operators), “(K) section 6050C (relating to information regarding windfall profit tax on domestic crude oil), “(L) section 6050H(d) (relating to returns relating to mortgage interest received in trade or business from individuals), “(M) section 60501(e) (relating to returns relating to cash received in trade or business), “(N) section 6050J(e) (relating to returns relating to foreclosures and abandonments of security), “(O) section 6050K(b) (relating to returns relating to exchanges of certain partnership interests), “(P) section 6050L(c) (relating to returns relating to certain dispositions of donated property), “(Q) section 6050N(b) (relating to returns regarding payments of royalties), “(R) section 6051 (relating to receipts for employees), “(S) section 6052(b) (relating to returns regarding payment of wages in the form of group-term life insurance), or “(T) section 6053 (b) or (c) (relating to reports of tips).”

2. 1989

   Improved Penalty Administration and Compliance Tax Act

   Pub. L. 101–239 title VII § 7711(a) · 103 Stat. 2106

   1. Substituted · 26 U.S.C. § 6723

      Pub. L. 101–239 substituted “comply with other information reporting requirements” for “include correct information” in section catchline

   2. Amended · 26 U.S.C. § 6723

      Pub. L. 101–239 amended text generally

   3. Substituted · 26 U.S.C. § 6723

      Pub. L. 101–239 substituting a single par. for former subsec. (a) stating general rule, subsec. (b) relating to penalty in case of intentional disregard, and subsec. (c) relating to coordination with former section 6676 of this title

   Source evidence

   Code amendment note
   Pub. L. 101–239 substituted “comply with other information reporting requirements” for “include correct information” in section catchline and amended text generally, substituting a single par. for former subsec. (a) stating general rule, subsec. (b) relating to penalty in case of intentional disregard, and subsec. (c) relating to coordination with former section 6676 of this title.

   Enacted provision · exact public law section
   (a) General Rule.— Part II of subchapter B of chapter 68 (relating to failure to file certain information returns or statements) is amended to read as follows: “PART II— FAILURE TO COMPLY WITH CERTAIN INFORMATION REPORTING REQUIREMENTS “Sec. 6721. Failure to file correct information returns. “Sec. 6722. Failure to furnish correct payee statements. “Sec. 6723. Failure to comply with other information reporting requirements. “Sec. 6724. Waiver; definitions and special rules. “SEC. 6721. FAILURE TO FILE CORRECT INFORMATION RETURNS. “(a) Imposition of Penalty.— “(1) In general.— In the case of a failure described in paragraph (2) by any person with respect to an information return, such person shall pay a penalty of $50 for each return with respect to which such a failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $250,000. “(2) Failures subject to penalty.— For purposes of paragraph (1), the failures described in this paragraph are— “(A) any failure to file an information return with the Secretary on or before the required filing date, and “(B) any failure to include all of the information required to be shown on the return or the inclusion of incorrect information. “(b) Reduction Where Correction in Specified Period.— “(1) Correction within so days.— If any failure described in subsection (a)(2) is corrected on or before the day 30 days after the required filing date— “(A) the penalty imposed by subsection (a) shall be $15 in lieu of $50, and “(B) the total amount imposed on the person for all such failures during any calendar year which are so corrected shall not exceed $75,000. “(2) Failures corrected on or before august 1.— If any failure described in subsection (a)(2) is corrected after the 30th day referred to in paragraph (1) but on or before August 1 of the calendar year in which the required filing date occurs— “(A) the penalty imposed by subsection (a) shall be $30 in lieu of $50, and “(B) the total amount imposed on the person for all such failures during the calendar year which are so corrected shall not exceed $150,000. “(c) Exception for De Minimis Failures to Include All Required Information.— “(1) In general.— If— “(A) an information return is filed with the Secretary, “(B) there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such return, and “(C) such failure is corrected on or before August 1 of the calendar year in which the required filing date occurs, for purposes of this section, such return shall be treated as having been filed with all of the correct required information. “(2) Limitation.— The number of information returns to which paragraph (1) applies for any calendar year shall not exceed the greater of— “(A) 10, or “(B) one-half of 1 percent of the total number of information returns required to be filed by the person during the calendar year. “(d) Lower Limitations for Persons With Gross Receipts of Not More Than $5,000,000.— “(1) In general.— If any person meets the gross receipts test of paragraph (2) with respect to any calendar year, with respect to failures during such taxable year— “(A) subsection (a)(1) shall be applied by substituting ‘$100,000’ for ‘$250,000’, “(B) subsection (b)(1)(B) shall be applied by substituting ‘$25,000’ for ‘$75,000’, and “(C) subsection (b)(2)(B) shall be applied by substituting ‘$50,000’ for ‘$150,000’. “(2) Gross receipts test.— “(A) In general.— A person meets the gross receipts test of this paragraph for any calendar year if the average annual gross receipts of such person for the most recent 3 taxable years ending before such calendar year do not exceed $5,000,000. “(B) Certain rules made applicable.— For purposes of subparagraph (A), the rules of paragraphs (2) and (3) of section 448(c) shall apply. “(e) Penalty in Case of Intentional Disregard.— If 1 or more failures described in subsection (a)(2) are due to intentional disregard of the filing requirement (or the correct information reporting requirement), then, with respect to each such failure— “(1) subsections (b), (c), and (d) shall not apply, “(2) the penalty imposed under subsection (a) shall be $100, or, if greater— “(A) in the case of a return other than a return required under section 6045(a), 6041A(b), 6050H, 6050J, 6050K, or 6050L, 10 percent of the aggregate amount of the items required to be reported correctly, or “(B) in the case of a return required to be filed by section 6045(a), 6050K, or 6050L, 5 percent of the aggregate amount of the items required to be reported correctly, and “(3) in the case of any penalty determined under paragraph (2)— “(A) the $250,000 limitation under subsection (a) shall not apply, and “(B) such penalty shall not be taken into account in applying such limitation (or any similar limitation under subsection (b)) to penalties not determined under paragraph (2). “SEC. 6722. FAILURE TO FURNISH CORRECT PAYEE STATEMENTS. “(a) General Rule.— In the case of each failure described in subsection (b) by any person with respect to a payee statement, such person shall pay a penalty of $50 for each statement with respect to which such a failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $100,000. “(b) Failures Subject to Penalty.— For purposes of subsection (a), the failures described in this subsection are— “(1) any failure to furnish a payee statement on or before the date prescribed therefor to the person to whom such statement is required to be furnished, and “(2) any failure to include all of the information required to be shown on a payee statement or the inclusion of incorrect information. “(c) Penalty in Case of Intentional Disregard.— If 1 or more failures to which subsection (a) applies are due to intentional disregard of the requirement to furnish a payee statement (or the correct information reporting requirement), then, with respect to each failure— “(1) the penalty imposed under subsection (a) shall be $100, or, if greater— “(A) in the case of a payee statement other than a statement required under section 6045(b), 6041A(e) (in respect of a return required under section 6041A(b)), 6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of the aggregate amount of the items required to be reported correctly, or “(B) in the case of a payee statement required under section 6045(b), 6050K(b), or 6050L(c), 5 percent of the aggregate amount of the items required to be reported correctly, and “(2) in the case of any penalty determined under paragraph (1)— “(A) the $100,000 limitation under subsection (a) shall not apply, and “(B) such penalty shall not be taken into account in applying such limitation to penalties not determined under paragraph (1). “SEC. 6723. FAILURE TO COMPLY WITH OTHER INFORMATION REPORTING REQUIREMENTS. “In the case of a failure by any person to comply with a specified information reporting requirement on or before the time prescribed therefor, such person shall pay a penalty of $50 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $100,000. ‘SEC. 6724. WAIVER; DEFINITIONS AND SPECIAL RULES. “(a) Reasonable Cause Waiver.— No penalty shall be imposed under this part with respect to any failure if it is shown that such failure is due to reasonable cause and not to willful neglect. “(b) Payment of Penalty.— Any penalty imposed by this part shall be paid on notice and demand by the Secretary and in the same manner as tax. “(c) Special Rule for Failure to Meet Magnetic Media Requirements.— No penalty shall be imposed under section 6721 solely by reason of any failure to comply with the requirements of the regulations prescribed under section 6011(e)(2), except to the extent that such a failure occurs with respect to more than 250 information returns. “(d) Definitions.— For purposes of this part— “(1) Information return.— The term ‘information return’ means— “(A) any statement of the amount of payments to another person required by— “(i) section 6041(a) or (b) (relating to certain information at source), “(ii) section 6042(a)(1) (relating to payments of dividends), “(iii) section 6044(a)(1) (relating to payments of patronage dividends), “(iv) section 6049(a) (relating to payments of interest), “(v) section 6050A(a) (relating to reporting requirements of certain fishing boat operators), “(vi) section 6050N(a) (relating to payments of royalties), or “(vii) section 6051(d) (relating to information returns with respect to income tax withheld), and “(B) any return required by— “(i) section 6041A(a) or (b) (relating to returns of direct sellers), “(ii) section 6045(a) or (d) (relating to returns of brokers), “(iii) section 6050H(a) (relating to mortgage interest received in trade or business from individuals), “(iv) section 60501(a) (relating to cash received in trade or business), “(v) section 6050J(a) (relating to foreclosures and abandonments of security), “(vi) section 6050K(a) (relating to exchanges of certain partnership interests), “(vii) section 6050L(a) (relating to returns relating to certain dispositions of donated property), “(viii) section 6052(a) (relating to reporting payment of wages in the form of group-life insurance), “(ix) section 6053(c)(1) (relating to reporting with respect to certain tips), “(x) section 1060(b) (relating to reporting requirements of transferors and transferees in certain asset acquisitions), or “(xi) subparagraph (A) or (C) of subsection (c)(4), or subsection (e), of section 4093 (relating to information reporting with respect to tax on diesel and aviation fuels). Such term also includes any form, statement, or schedule required to be filed with the Secretary with respect to any amount from which tax was required to be deducted and withheld under chapter 3 (or from which tax would be required to be so deducted and withheld but for an exemption under this title or any treaty obligation of the United States). “(2) Payee statement.— The term ‘payee statement’ means any statement required to be furnished under— “(A) section 6031(b) or (c), 6034A, or 6037(b) (relating to statements furnished by certain pass-thru entities), “(B) section 6039(a) (relating to information required in connection with certain options), “(C) section 6041(d) (relating to information at source), “(D) section 6041A(e) (relating to returns regarding payments of remuneration for services and direct sales), “(E) section 6042(c) (relating to returns regarding payments of dividends and corporate earnings and profits), “(F) section 6044(e) (relating to returns regarding payments of patronage dividends), “(G) section 6045(b) or (d) (relating to returns of brokers), “(H) section 6049(c) (relating to returns regarding payments of interest), “(I) section 6050A(b) (relating to reporting requirements of certain fishing boat operators), “(J) section 6050H(d) relating to returns relating to mortgage interest received in trade or business from individuals), “(K) section 60501(e) (relating to returns relating to cash received in trade or business), “(L) section 6050J(e) (relating to returns relating to foreclosures and abandonments of security), “(M) section 6050K(b) (relating to returns relating to exchanges of certain partnership interests), “(N) section 6050L(c) (relating to returns relating to certain dispositions of donated property), “(O) section 6050N(b) (relating to returns regarding payments of royalties), “(P) section 6051 (relating to receipts for employees), “(Q) section 6052(b) (relating to returns regarding payment of wages in the form of group-term life insurance), “(R) section 6053(b) or (c) (relating to reports of tips), or “(S) section 4093(c)(4)(B) (relating to certain purchasers of diesel and aviation fuels). Such term also includes any form, statement, or schedule required to be furnished to the recipient of any amount from which tax was required to be deducted and withheld under chapter 3 (or from which tax would be required to be so deducted and withheld but for an exemption under this title or any treaty obligation of the United States). “(3) Specified information reporting requirement.— The term ‘specified information reporting requirement’ means– “(A) the notice required by section 6050K(c)(1) (relating to requirement that transferor notify partnership of exchange), “(B) any requirement contained in the regulations prescribed under section 6109 that a person— “(i) include his TIN on any return, statement, or other document (other than an information return or payee statement), “(ii) furnish his TIN to another person, or “(iii) include on any return, statement, or other document (other than an information return or payee statement) made with respect to another person the TIN of such person, “(C) any requirement contained in the regulations prescribed under section 215 that a person— “(i) furnish his TIN to another person, or “(ii) include on his return the TIN of another person, and “(D) the requirement of section 6109(e) that a person include the TIN of any dependent on his return. “(4) Required filing date.— The term ‘required filing date’ means the date prescribed for filing an information return with the Secretary (determined with regard to any extension of time for filing).”

   Effective date note
   Amendment by Pub. L. 101–239 applicable to returns and statements the due date for which (determined without regard to extensions) is after Dec. 31, 1989, see section 7711(c) of Pub. L. 101–239, set out as a note under section 6721 of this title.

4 of 4 references resolved to an enrolled provision