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Sec. 6699. Failure To File S Corporation Return

I.R.C. § 6699(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 S corporation required to file a return under section 6037 for any taxable year—
I.R.C. § 6699(a)(1)
fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or
I.R.C. § 6699(a)(2)
files a return which fails to show the information required under section 6037,
such S corporation 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. § 6699(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. § 6699(b)(1)
$195, multiplied by
I.R.C. § 6699(b)(2)
the number of persons who were shareholders in the S corporation during any part of the taxable year.
I.R.C. § 6699(c) Assessment Of Penalty
The penalty imposed by subsection (a) shall be assessed against the S corporation.
I.R.C. § 6699(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. § 6699(e) Adjustment For Inflation
I.R.C. § 6699(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. § 6699(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. 110-142, Sec. 9, Dec. 20, 200, 121 Stat. 1803; and amended by Pub. L. 110-458, title I, Sec. 128(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(e), Dec. 19, 2014, 128 Stat. 4010; Pub. L. 115-97, title I, Sec. 11002(d)(1)(OO), Dec. 22, 2017, 131 Stat. 2054; Pub. L. 115-141, Div. U, title IV, Sec. 401(a)(299)(E), Mar. 23, 2018, 132 Stat. 348.)
BACKGROUND NOTES
AMENDMENTS
2018 — Subsec. (e)(1). Pub. L. 115-141, Div. U, Sec. 401(a)(299)(E), 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)(OO), 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(e), 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”.
EFFECTIVE DATE OF 2018 AMENDMENT
Amendment by Pub. L. 115-141, Div. U, Sec. 401(a)(299)(E), effective March 23, 2018.
EFFECTIVE DATE OF 2017 AMENDMENT
Amendment by Pub. L. 115-97, Sec. 11002(d)(1)(OO), effective for taxable years beginning after December 31, 2017.
EFFECTIVE DATE OF 2014 AMENDMENT
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 filed, and statements required to be furnished, after December 31, 2014.
EFFECTIVE DATE OF 2009 AMENDMENT
Amendment by Sec. 16(a) of Pub. L. 111-92 effective for returns for taxable years beginning after December 31, 2008.
EFFECTIVE DATE OF 2008 AMENDMENT
Amendment by Sec. 128(a) of Pub. L. 110-458 effective for returns required to be filed after December 31, 2008.
EFFECTIVE DATE
Effective for returns required to be filed after the date of the enactment of this Act [Enacted: Dec. 20, 2007].