I.R.C. § 6689(a) Civil Penalty
If the taxpayer fails to notify the Secretary (on or before the date prescribed
by regulations for giving such notice)
of a foreign tax redetermination, unless it is shown that such failure is due to
reasonable cause and not due to willful neglect, there shall be added to the deficiency
attributable to such redetermination an amount (not in excess of 25 percent of the
deficiency) determined as follows—
I.R.C. § 6689(a)(1)
5 percent of the deficiency if the failure is for not more than 1 month, with
I.R.C. § 6689(a)(2)
an additional 5 percent of the deficiency for each month (or fraction thereof) during
which the failure continues.
I.R.C. § 6689(b) Foreign Tax Redetermination Defined
For purposes of this section, the term “foreign tax redetermination” means any redetermination
for which a notice is required under subsection (c) of section 905 or paragraph (2) of section 404A(g).
(Added Pub. L. 96-603, 2(c)(2), Dec. 28, 1980, 94 Stat. 3509.)
For applicability of section with respect to employer contributions or accruals for
taxable years beginning after Dec. 31, 1979, election to apply amendments retroactively
with respect to foreign subsidiaries, allowance of prior deductions in case of certain
funded branch plans, and time and manner for making elections, see section 2(e) of
Pub. L. 96-603, set out as a note under section 404A of this title.
A prior section 6689, added Pub. L. 93-17, 3(d)(2), Apr. 10, 1973, 87 Stat. 16, which related to the failure by certain foreign
issuers and obligors to comply with United States investment equalization tax requirements,
was repealed by Pub. L. 94-455, title XIX, 1904(b)(10)(E)(i), Oct. 4, 1976, 90 Stat. 1817.