(a) Penalties applicable to tax return preparer. For general definitions regarding penalties under section 6694 of the Internal Revenue Code (Code) applicable to preparers of tax returns or claims for refund of tax under chapter 37 of the Code, see § 1.6694-1 of this chapter.

(b) Penalties for understatement due to an unreasonable position. A person who is a tax return preparer of any return or claim for refund of tax under chapter 37 may be subject to penalties under section 6694(a) in the manner stated in § 1.6694-2 of this chapter.

(c) Penalties for understatement due to willful, reckless, or intentional conduct. A person who is a tax return preparer of any return or claim for refund of tax under chapter 37 may be subject to penalties under section 6694(b) in the manner stated in § 1.6694-3 of this chapter.

(d) Extension of period of collection when tax return preparer pays 15 percent of a penalty for understatement of taxpayer's liability and certain other procedural matters. The rules under § 1.6694-4 of this chapter, relating to the extension of period of collection when a tax return preparer who prepared a return or claim for refund of tax pays 15 percent of a penalty for understatement of taxpayer's liability and to procedural matters regarding the investigation, assessment, and collection of the penalties under sections 6694(a) and (b), apply to a tax return preparer who prepared a return or claim for refund for tax under chapter 37.

(e) Applicability date. This section applies to returns and claims for refund filed, and advice provided, after June 28, 2024, and during taxable years ending after June 28, 2024.