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Sec. 6698. Failure To File Partnership Return

I.R.C. § 6698(a) General Rule
In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any partnership required to file a return under section 6031, or a partnership adjustment tracking report under section 6226(b)(4)(A), for any taxable year—
I.R.C. § 6698(a)(1)
fails to file such return, or such report, at the time prescribed therefor (determined with regard to any extension of time for filing), or
I.R.C. § 6698(a)(2)
files a return or a report which fails to show the information required under section 6031 or 6226(b)(4)(A), respectively,
such partnership shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause.
I.R.C. § 6698(b) Amount Per Month
For purposes of subsection (a), the amount determined under this subsection for any month is the product of—
I.R.C. § 6698(b)(1)
$195, multiplied by
I.R.C. § 6698(b)(2)
the number of persons who were partners in the partnership during any part of the taxable year.
I.R.C. § 6698(c) Assessment Of Penalty
The penalty imposed by subsection (a) shall be assessed against the partnership.
I.R.C. § 6698(d) 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 by subsection (a).
I.R.C. § 6698(e) Adjustment For Inflation
I.R.C. § 6698(e)(1) In General
In the case of any return required to be filed in a calendar year beginning after 2014, the $195 dollar amount under subsection (b)(1) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof.
I.R.C. § 6698(e)(2) Rounding
If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.
(Added by Pub. L. 95-600, title II, 211(a), Nov. 6, 1978, 92 Stat. 2817; amended by Pub. L. 110-142, Sec. 8, Dec. 20, 2007, 121 Stat. 1803; Pub. L. 110-458, title I, Sec. 127(a), Dec. 23, 2008, 122 Stat. 5092; Pub. L. 111-92, Sec. 16(a), Nov. 6, 2009, 123 Stat. 2984; Pub. L. 113-295, Div. B, title II, Sec. 208(d), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-97, title I, Sec. 11002(d)(1)(NN), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. U, title II, Sec. 206(n)(2), title IV, Sec. 401(a)(299)(D), (313), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018--Subsec. (a). Pub. L. 115-141, Div. U, Sec. 206(n)(A), amended subsec. (a) by inserting “, or a partnership adjustment tracking report under section 6226(b)(4)(A),” after “under section 6031” in the matter preceding par. (1).
Subsec. (a)(1). Pub. L. 115-141, Div. U, Sec. 206(n)(B), amended par. (1) by inserting “, or such report,” after “such return”.
Subsec. (a)(2). Pub. L. 115-141, Div. U, Sec. 206(n)(C), amended par. (2) by inserting “or a report” after “a return” and by inserting “or 6226(b)(4)(A), respectively” before the comma at the end.
Subsec. (b)(2). Pub. L. 115-141, Div. U, Sec. 401(a)(313), amended par. (2) by adding a period at the end.
Subsec. (e)(1). Pub. L. 115-141, Div. U, Sec. 401(a)(299)(D), amended par. (1) by inserting “an amount equal to” after “increased by” and by inserting “for the calendar year” after “section 1(f)(3)”.
2017--Subsec. (e)(1). Pub. L. 115-97, Sec. 11002(d)(1)(NN), amended par. (1) by substituting “for ‘calendar year 2016’ in subparagraph (A)(ii)” for ‘‘for ‘calendar year 1992’ in subparagraph (B)’’.
2014--Subsec. (e). Pub. L. 113-295, Div. B, Sec. 208(d), added subsec. (e).
2009--Subsec. (b)(1). Pub. L. 111-92, Sec. 16(a), amended par. (1) by substituting “$195” for “89”.
2008--Subsec. (b)(1). Pub. L. 110-458, Sec. 128(a), amended par. (1) by substituting “$89” for “$85”.
2007--Subsec. (a). Pub. L. 110-142, Sec. 8(a), amended subsec. (a) by substituting “12 months” for “5 months”.
Subsec. (b)(1). Pub. L. 110-142, Sec. 8(b), amended par. (1) by substituting “$85” for “$50”.
EFFECTIVE DATE OF 2018 AMENDMENTS
Amendments by Pub. L. 115-141, Div. U, Sec. 206(n), effective as if included in Section 1101 of the Bipartisan Budget Act of 2015 [Pub. L. 114-74].
Amendments by Pub. L. 115-141, Div. U, Sec. 401(a), effective March 23, 2018.
EFFECTIVE DATE OF 2017 AMENDMENTS
Amendment by Pub. L. 115-97, Sec. 11002(d)(1)(NN), effective for taxable years beginning after December 31, 2017.
EFFECTIVE DATE OF 2014 AMENDMENTS
Amendment by Pub. L. 113-295, Div. B, Sec. 208, as amended by Pub. L. 115-141, Div. U, Sec. 105(a), effective for returns required to be filed, and statements required to be furnished, after December 31, 2014.
EFFECTIVE DATE OF 2009 AMENDMENTS
Amendment by Sec. 16(a) of Pub. L. 111-92 effective for returns for taxable years beginning after December 31, 2009.
EFFECTIVE DATE OF 2008 AMENDMENTS
Amendment by Sec. 128(a) of Pub. L. 110-458 effective for returns required to be filed after December 31, 2008.
EFFECTIVE DATE OF 2007 AMENDMENTS
Amendments by Sec. 8 of Pub. L. 110-142 effective for returns required to be filed after the date of the enactment of this Act [Enacted: Dec. 20, 2007].
EFFECTIVE DATE
Section 211(c) of Pub. L. 95-600 provided that: “The amendments made by this section [adding this section] shall apply with respect to returns for taxable years beginning after December 31, 1978.”
MODIFICATION OF PENALTY FOR FAILURE TO FILE PARTNERSHIP RETURNS
Section 2 of Pub. L. 110-141 provided that: “For any return of a partnership required to be filed under section 6031 of the Internal Revenue Code of 1986 for a taxable year beginning in 2008, the dollar amount in effect under section 6698(b)(1) of such Code shall be increased by $1.”
PRIOR PROVISIONS
Another section 6698, formerly section 6694, relating to failure to file information with respect to carryover basis property which was added by Pub. L. 94-455, 2005(d)(2), and renumbered section 6698 by Pub. L. 95-600, was renumbered section 6698A by Pub. L. 96-222.
[6698A. Repealed. Pub. L. 96-223, title IV, 401(a), Apr. 2, 1980, 94 Stat. 299]
Section, added Pub. L. 94-455, title XX, 2005(d)(2), Oct. 4, 1976, 90 Stat. 1878, 6694, renumbered 6698 and amended Pub. L. 95-600, title VII, 702(r)(1)(A), (B), Nov. 6, 1978, 92 Stat. 2938; renumbered 6698A, Pub. L. 96-222, title I, 107(a)(2)(D), Apr. 1, 1980, 94 Stat. 223, related to failure of an executor to file information with respect to carryover basis property. Repeal was achieved by repealing section 2005(d)(2) of Pub. L. 94-455 and section 702(r)(1)(A), (B) of Pub. L. 95-600 and the amendments made by those sections.
Effective Date of Repeal and Revival of Prior Law
Repeal applicable in respect of decedents dying after Dec. 31, 1976, and, except for certain elections, this title to be applied and administered as if this section had not been enacted, see section 401(b), (e) of Pub. L. 96-223, set out as an Effective Date of 1980 Amendment and Revival of Prior Law note under section 1023 of this title.
[6699. Repealed. Pub. L. 99-514, title XI, 1171(b)(7)(A), Oct. 22, 1986, 100 Stat. 2513]
Section, added Pub. L. 95-600, title I, 141(c)(1), Nov. 6, 1978, 92 Stat. 2794, and amended Pub. L. 96-222, title I, 101(a)(7)(L)(iii)(VI), (v)(IX), Apr. 1, 1980, 94 Stat. 200; Pub. L. 97-34, title III, 331(c)(3), (4), Aug. 13, 1981, 95 Stat. 293, 294; Pub. L. 97-448, title I, 103(g)(2)(B)-(D), Jan. 12, 1983, 96 Stat. 2379; Pub. L. 98-369, div. A, title IV, 491(e)(9), July 18, 1984, 98 Stat. 853; Pub. L. 99-514, title XVIII, 1847(b)(9), Oct. 22, 1986, 100 Stat. 2857, related to assessable penalties applicable to tax credit employee stock ownership plans.
Effective Date of Repeal
Repeal applicable to compensation paid or accrued after Dec. 31, 1986, in taxable years ending after such date, but this section to continue to apply with respect to credits under section 41 of this title attributable to compensation paid or accrued before Jan. 1, 1987 (or under section 38 of this title with respect to qualified investment before Jan. 1, 1983), see section 1171(c) of Pub. L. 99-514, set out as an Effective Date of 1986 Amendment note under section 38 of this title.