26 USC 6651 - Failure to file tax return or to pay tax

Collapse to view only § 6651. Failure to file tax return or to pay tax

§ 6651. Failure to file tax return or to pay tax
§ 6652. Failure to file certain information returns, registration statements, etc.
§ 6653. Failure to pay stamp tax
§ 6654. Failure by individual to pay estimated income tax
§ 6655. Failure by corporation to pay estimated income tax
§ 6656. Failure to make deposit of taxes
§ 6657. Bad checks
§ 6658. Coordination with title 11
[§§ 6659 to 6661. Repealed.

§ 6651. Failure to file tax return or to pay tax

(a) Addition to the tax

In case of failure—

(1) to file any return required under authority of subchapter A of chapter 61 (other than part III thereof), subchapter A of chapter 51 (relating to distilled spirits, wines, and beer), or of subchapter A of chapter 52 (relating to tobacco, cigars, cigarettes, and cigarette papers and tubes), or of subchapter A of chapter 53 (relating to machine guns and certain other firearms), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate;

(2) to pay the amount shown as tax on any return specified in paragraph (1) on or before the date prescribed for payment of such tax (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount shown as tax on such return 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate; or

(3) to pay any amount in respect of any tax required to be shown on a return specified in paragraph (1) which is not so shown (including an assessment made pursuant to section 6213(b)) within 21 calendar days from the date of notice and demand therefor (10 business days if the amount for which such notice and demand is made equals or exceeds $100,000), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount of tax stated in such notice and demand 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate.

In the case of a failure to file a return of tax imposed by chapter 1 within 60 days of the date prescribed for filing of such return (determined with regard to any extensions of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, the addition to tax under paragraph (1) shall not be less than the lesser of $435 or 100 percent of the amount required to be shown as tax on such return.

(b) Penalty imposed on net amount due

For purposes of—

(1) subsection (a)(1), the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed on the return,

(2) subsection (a)(2), the amount of tax shown on the return shall, for purposes of computing the addition for any month, be reduced by the amount of any part of the tax which is paid on or before the beginning of such month and by the amount of any credit against the tax which may be claimed on the return, and

(3) subsection (a)(3), the amount of tax stated in the notice and demand shall, for the purpose of computing the addition for any month, be reduced by the amount of any part of the tax which is paid before the beginning of such month.

(1) Additions under more than one paragraph

(2) Amount of tax shown more than amount required to be shown

(d) Increase in penalty for failure to pay tax in certain cases

(1) In general

(2) Description

For purposes of paragraph (1), the day described in this paragraph is the earlier of—

(A) the day 10 days after the date on which notice is given under section 6331(d), or

(B) the day on which notice and demand for immediate payment is given under the last sentence of section 6331(a).

(e) Exception for estimated tax

(f) Increase in penalty for fraudulent failure to file

If any failure to file any return is fraudulent, paragraph (1) of subsection (a) shall be applied—

(1) by substituting “15 percent” for “5 percent” each place it appears, and

(2) by substituting “75 percent” for “25 percent”.

(g) Treatment of returns prepared by Secretary under section 6020(b)

In the case of any return made by the Secretary under section 6020(b)—

(1) such return shall be disregarded for purposes of determining the amount of the addition under paragraph (1) of subsection (a), but

(2) such return shall be treated as the return filed by the taxpayer for purposes of determining the amount of the addition under paragraphs (2) and (3) of subsection (a).

(h) Limitation on penalty on individual’s failure to pay for months during period of installment agreement

(i) Application to imputed underpayment

(j) Adjustment for inflation

(1) In general

(2) Rounding

(Aug. 16, 1954, ch. 736, 68A Stat. 821; Pub. L. 90–364, title I, § 103(e)(4), June 28, 1968, 82 Stat. 264; Pub. L. 91–172, title IX, § 943(a), Dec. 30, 1969, 83 Stat. 727; Pub. L. 92–9, § 3(j)(1), Apr. 1, 1971, 85 Stat. 22; Pub. L. 94–455, title XIX, § 1904(b)(10)(A)(v), Oct. 4, 1976, 90 Stat. 1817; Pub. L. 97–248, title III, § 318(a), (b), Sept. 3, 1982, 96 Stat. 610; Pub. L. 98–369, div. A, title IV, § 412(b)(8), July 18, 1984, 98 Stat. 792; Pub. L. 99–514, title XV, § 1502(a), (b), Oct. 22, 1986, 100 Stat. 2741; Pub. L. 100–203, title X, § 10301(b)(6), Dec. 22, 1987, 101 Stat. 1330–429; Pub. L. 101–239, title VII, § 7741(a), Dec. 19, 1989, 103 Stat. 2404; Pub. L. 104–168, title III, § 303(b)(2), title XIII, § 1301(a), July 30, 1996, 110 Stat. 1458, 1475; Pub. L. 105–206, title III, § 3303(a), July 22, 1998, 112 Stat. 742; Pub. L. 110–245, title III, § 303(a), June 17, 2008, 122 Stat. 1649; Pub. L. 113–295, div. B, title II, § 208(a), Dec. 19, 2014, 128 Stat. 4072; Pub. L. 114–125, title IX, § 921(a), (b), Feb. 24, 2016, 130 Stat. 281; Pub. L. 115–97, title I, § 11002(d)(1)(KK), Dec. 22, 2017, 131 Stat. 2060; Pub. L. 115–141, div. U, title II, § 206(n)(1), title IV, § 401(a)(299)(A), Mar. 23, 2018, 132 Stat. 1181, 1198; Pub. L. 116–25, title III, § 3201(a), (b), July 1, 2019, 133 Stat. 1017; Pub. L. 116–94, div. O, title IV, § 402(a), (b), Dec. 20, 2019, 133 Stat. 3179.)

§ 6652. Failure to file certain information returns, registration statements, etc.

(a) Returns with respect to certain payments aggregating less than $10

In the case of each failure to file a statement of a payment to another person required under the authority of—

(1) section 6042(a)(2) (relating to payments of dividends aggregating less than $10), or

(2) section 6044(a)(2) (relating to payments of patronage dividends aggregating less than $10),

on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not to willful neglect, there shall be paid (upon notice and demand by the Secretary and in the same manner as tax) by the person failing to so file the statement, $1 for each such statement not so filed, but the total amount imposed on the delinquent person for all such failures during the calendar year shall not exceed $1,000.

(b) Failure to report tips

(1) Annual returns under section 6033(a)(1) or 6012(a)(6)

(A) Penalty on organization

In the case of—

(i) a failure to file a return required under section 6033(a)(1) (relating to returns by exempt organizations) or section 6012(a)(6) (relating to returns by political organizations) on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), or

(ii) a failure to include any of the information required to be shown on a return filed under section 6033(a)(1) or section 6012(a)(6) or to show the correct information,

there shall be paid by the exempt organization $20 for each day during which such failure continues. The maximum penalty under this subparagraph on failures with respect to any 1 return shall not exceed the lesser of $10,000 or 5 percent of the gross receipts of the organization for the year. In the case of an organization having gross receipts exceeding $1,000,000 for any year, with respect to the return required under section 6033(a)(1) or section 6012(a)(6) for such year, in applying the first sentence of this subparagraph, the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and, in lieu of applying the second sentence of this subparagraph, the maximum penalty under this subparagraph shall not exceed $50,000.

(B) Managers

(i) In general

(ii) Failure to comply with demand

(D) Public inspection of applications for exemption and notice of status

(E) No penalty for certain annual notices

(2) Returns under section 6034 or 6043(b)

(A) Penalty on organization or trust

(B) Managers

In the case of a trust which is required to file a return under section 6034(a), subparagraphs (A) and (B) of this paragraph shall not apply and paragraph (1) shall apply in the same manner as if such return were required under section 6033, except that—

(i) the 5 percent limitation in the second sentence of paragraph (1)(A) shall not apply,

(ii) in the case of any trust with gross income in excess of $250,000, in applying the first sentence of paragraph (1)(A), the amount of the penalty for each day during which a failure continues shall be $100 in lieu of the amount otherwise specified, and in lieu of applying the second sentence of paragraph (1)(A), the maximum penalty under paragraph (1)(A) shall not exceed $50,000, and

(iii) the third sentence of paragraph (1)(A) shall be disregarded.

In addition to any penalty imposed on the trust pursuant to this subparagraph, if the person required to file such return knowingly fails to file the return, such penalty shall also be imposed on such person who shall be personally liable for such penalty.

(3) Disclosure under section 6033(a)(2)

(A) Penalty on entities

(B) Written demand

(i) In general

(ii) Failure to comply with demand

(4) Notices under section 506

(A) Penalty on organization

(B) Managers

(5) Reasonable cause exception

(6) Other special rules

(A) Treatment as tax

(B) Joint and several liability

(7) Adjustment for inflation

(A) In general

(B) Rounding

If any amount adjusted under subparagraph (A)—

(i) is not less than $5,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and

(ii) is not described in clause (i) and is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.

(d) Annual registration and other notification by pension plan

(1) Registration

(2) Notification of change of status

(e) Information required in connection with certain plans of deferred compensation, etc.

(f) Returns required under section 6039C

(1) In general

(2) Amount of penalty

(3) Limitation

The amount determined under paragraph (2) with respect to any person for failing to meet the requirements of section 6039C for any calendar year shall not exceed the lesser of—

(A) $25,000, or

(B) 5 percent of the aggregate of the fair market value of the United States real property interests owned by such person at any time during such year.

For purposes of the preceding sentence, fair market value shall be determined as of the end of the calendar year (or, in the case of any property disposed of during the calendar year, as of the date of such disposition).

[(g) Repealed. Pub. L. 113–295, div. A, title II, § 221(a)(39)(B), Dec. 19, 2014, 128 Stat. 4043]

(h) Failure to give notice to recipients of certain pension, etc., distributions

(i) Failure to give written explanation to recipients of certain qualifying rollover distributions

(j) Failure to file certification with respect to certain residential rental projects

(k)1

1 See 1993 Amendment note below.

Failure to make reports required under section 1202

(l) Failure to file return with respect to certain corporate transactions

(m) Alcohol and tobacco taxes

(n) Failure to make reports required under sections 3511, 6053(c)(8), and 7705

(o) Failure to provide notices with respect to qualified small employer health reimbursement arrangements

(p) Failure to provide notice under section 83(i)

(Aug. 16, 1954, ch. 736, 68A Stat. 821; Pub. L. 85–866, title I, § 85, Sept. 2, 1958, 72 Stat. 1664; Pub. L. 87–834, § 19(d), Oct. 16, 1962, 76 Stat. 1057; Pub. L. 88–272, title II, § 221(b)(2), Feb. 26, 1964, 78 Stat. 74; Pub. L. 89–97, title III, § 313(e)(2)(B), (3), July 30, 1965, 79 Stat. 385; Pub. L. 89–212, § 2(e), Sept. 29, 1965, 79 Stat. 859; Pub. L. 91–172, title I, § 101(d)(4), Dec. 30, 1969, 83 Stat. 522; Pub. L. 93–406, title II, § 1031(b)(1)(A), (B)(i), Sept. 2, 1974, 88 Stat. 945, 946; Pub. L. 94–455, title XII, § 1207(e)(3)(B), (C), title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1708, 1834; Pub. L. 96–167, § 7(b)(1), Dec. 29, 1979, 93 Stat. 1277; Pub. L. 96–223, title I, § 101(d)(2)(A), Apr. 2, 1980, 94 Stat. 251; Pub. L. 96–499, title XI, § 1123(b), Dec. 5, 1980, 94 Stat. 2689; Pub. L. 96–603, § 1(d)(2), Dec. 28, 1980, 94 Stat. 3504; Pub. L. 97–34, title III, § 311(f), title VII, § 723(a)(1), (3), (4), Aug. 13, 1981, 95 Stat. 281, 343, 344; Pub. L. 97–248, title III, §§ 309(b)(2), 315(a), (b), Sept. 3, 1982, 96 Stat. 595, 605, 606; Pub. L. 97–448, title II, § 201(i)(2), Jan. 12, 1983, 96 Stat. 2395; Pub. L. 98–67, title I, § 105(b)(1), Aug. 5, 1983, 97 Stat. 380; Pub. L. 98–369, div. A, title I, §§ 145(b)(1), (2), 146(b)(1), (2), 148(b)(1), (2), 149(b)(1), 155(b)(2)(A), title IV, § 491(d)(50), title V, § 531(b)(4)(B), title VII, § 714(j)(3), July 18, 1984, 98 Stat. 685, 686, 688, 689, 693, 852, 882, 963; Pub. L. 98–397, title II, § 207(b), Aug. 23, 1984, 98 Stat. 1450; Pub. L. 98–611, § 1(d)(2), Oct. 31, 1984, 98 Stat. 3177; Pub. L. 98–612, § 1(b)(2), Oct. 31, 1984, 98 Stat. 3181; Pub. L. 99–514, title XI, § 1151(b), title XIII, § 1301(g), title XV, § 1501(d)(1)(A), title XVII, § 1702(b), title XVIII, §§ 1810(f)(9), 1811(c)(2), Oct. 22, 1986, 100 Stat. 2502, 2656, 2740, 2774, 2828, 2833; Pub. L. 100–203, title X, §§ 10502(d)(11), 10704(a), Dec. 22, 1987, 101 Stat. 1330–444, 1330–461; Pub. L. 100–647, title I, §§ 1011B(a)(10), 1017(b), 1018(u)(36), title III, § 3021(a)(10), Nov. 10, 1988, 102 Stat. 3484, 3575, 3592, 3630; Pub. L. 101–140, title II, § 203(a)(1), Nov. 8, 1989, 103 Stat. 830; Pub. L. 101–239, title VII, §§ 7208(b)(2), 7841(d)(5), Dec. 19, 1989, 103 Stat. 2338, 2428; Pub. L. 102–318, title V, § 522(b)(2)(F), July 3, 1992, 106 Stat. 314; Pub. L. 103–66, title XIII, § 13113(c), Aug. 10, 1993, 107 Stat. 429; Pub. L. 104–168, title XIII, §§ 1314(a), (b), July 30, 1996, 110 Stat. 1480; Pub. L. 104–188, title I, §§ 1455(c), (d)(2), 1704(s), Aug. 20, 1996, 110 Stat. 1818, 1887; Pub. L. 105–34, title XII, § 1281(a), (b), title XVI, § 1602(d)(2)(B), Aug. 5, 1997, 111 Stat. 1037, 1094; Pub. L. 105–277, div. J, title I, § 1004(b)(2)(B), (C), Oct. 21, 1998, 112 Stat. 2681–890; Pub. L. 106–230, §§ 1(c), 2(c), 3(c), July 1, 2000, 114 Stat. 479, 482, 483; Pub. L. 109–222, title V, § 516(c), May 17, 2006, 120 Stat. 371; Pub. L. 109–280, title XII, §§ 1201(b)(2), 1223(d), Aug. 17, 2006, 120 Stat. 1065, 1091; Pub. L. 113–295, div. A, title II, § 221(a)(39)(B), div. B, title II, §§ 206(c)(4), 208(b), Dec. 19, 2014, 128 Stat. 4043, 4071, 4072; Pub. L. 114–113, div. Q, title IV, § 405(c), Dec. 18, 2015, 129 Stat. 3119; Pub. L. 114–255, div. C, title XVIII, § 18001(a)(5), Dec. 13, 2016, 130 Stat. 1342; Pub. L. 115–97, title I, §§ 11002(d)(1)(LL), 13603(e), Dec. 22, 2017, 131 Stat. 2060, 2164; Pub. L. 115–141, div. U, title IV, § 401(a)(299)(B), (300), Mar. 23, 2018, 132 Stat. 1198; Pub. L. 116–94, div. O, title IV, § 403(a)–(c), Dec. 20, 2019, 133 Stat. 3180.)

§ 6653. Failure to pay stamp tax

Any person (as defined in section 6671(b)) who—

(1) willfully fails to pay any tax imposed by this title which is payable by stamp, coupons, tickets, books, or other devices or methods prescribed by this title or by regulations under the authority of this title, or

(2) willfully attempts in any manner to evade or defeat any such tax or the payment thereof,

shall, in addition to other penalties provided by law, be liable for a penalty of 50 percent of the total amount of the underpayment of the tax.

(Aug. 16, 1954, ch. 736, 68A Stat. 822; Pub. L. 85–866, title I, § 86, Sept. 2, 1958, 72 Stat. 1665; Pub. L. 91–172, title I, § 101(j)(50), title IX, § 943(c)(6), Dec. 30, 1969, 83 Stat. 531, 729; Pub. L. 91–679, § 2, Jan. 12, 1971, 84 Stat. 2063; Pub. L. 93–406, title II, § 1016(a)(18), Sept. 2, 1974, 88 Stat. 931; Pub. L. 96–223, title I, § 101(f)(8), Apr. 2, 1980, 94 Stat. 253; Pub. L. 97–34, title V, § 501(b), title VII, § 722(b)(1), Aug. 13, 1981, 95 Stat. 326, 342; Pub. L. 97–248, title III, § 325(a), Sept. 3, 1982, 96 Stat. 616; Pub. L. 97–448, title I, §§ 105(a)(1)(D), 107(a)(3), Jan. 12, 1983, 96 Stat. 2384, 2391; Pub. L. 98–67, title I, § 106, Aug. 5, 1983, 97 Stat. 382; Pub. L. 98–369, div. A, title I, § 179(b)(3), July 18, 1984, 98 Stat. 718; Pub. L. 99–44, § 1(b), May 24, 1985, 99 Stat. 77; Pub. L. 99–514, title XV, § 1503(a), (b), (c)(2), (3), (d)(1), Oct. 22, 1986, 100 Stat. 2742, 2743; Pub. L. 100–647, title I, § 1015(b)(2)(A), (B), (3), Nov. 10, 1988, 102 Stat. 3569; Pub. L. 101–239, title VII, § 7721(c)(1), Dec. 19, 1989, 103 Stat. 2399.)

§ 6654. Failure by individual to pay estimated income tax

(a) Addition to the taxExcept as otherwise provided in this section, in the case of any underpayment of estimated tax by an individual, there shall be added to the tax under chapter 1, the tax under chapter 2, and the tax under chapter 2A for the taxable year an amount determined by applying—

(1) the underpayment rate established under section 6621,

(2) to the amount of the underpayment,

(3) for the period of the underpayment.

(b) Amount of underpayment; period of underpaymentFor purposes of subsection (a)—

(1) AmountThe amount of the underpayment shall be the excess of—

(A) the required installment, over

(B) the amount (if any) of the installment paid on or before the due date for the installment.

(2) Period of underpaymentThe period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier—

(A) the 15th day of the 4th month following the close of the taxable year, or

(B) with respect to any portion of the underpayment, the date on which such portion is paid.

(3) Order of crediting payments

(1) Payable in 4 installments

(2) Time for payment of installments

(d) Amount of required installmentsFor purposes of this section—

(1) Amount

(A) In general

(B) Required annual paymentFor purposes of subparagraph (A), the term “required annual payment” means the lesser of—

(i) 90 percent of the tax shown on the return for the taxable year (or, if no return is filed, 90 percent of the tax for such year), or

(ii) 100 percent of the tax shown on the return of the individual for the preceding taxable year.

Clause (ii) shall not apply if the preceding taxable year was not a taxable year of 12 months or if the individual did not file a return for such preceding taxable year.

(i) In general

(ii) Separate returns

(iii) Special rule

(2) Lower required installment where annualized income installment is less than amount determined under paragraph (1)

(A) In generalIn the case of any required installment, if the individual establishes that the annualized income installment is less than the amount determined under paragraph (1)—

(i) the amount of such required installment shall be the annualized income installment, and

(ii) any reduction in a required installment resulting from the application of this subparagraph shall be recaptured by increasing the amount of the next required installment determined under paragraph (1) by the amount of such reduction (and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this clause).

(B) Determination of annualized income installmentIn the case of any required installment, the annualized income installment is the excess (if any) of—

(i) an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income, alternative minimum taxable income, and adjusted self-employment income for months in the taxable year ending before the due date for the installment, over

(ii) the aggregate amount of any prior required installments for the taxable year.

(i) Annualization

(ii) Applicable percentage

(iii) Adjusted self-employment income

(D) Treatment of subpart F income

(i) In general

(ii) Prior year safe harborIf a taxpayer elects to have this clause apply to any taxable year—(I) clause (i) shall not apply, and(II) for purposes of computing any annualized income installment for such taxable year, the taxpayer shall be treated as having received ratably during such taxable year items of income and credit described in clause (i) in an amount equal to the amount of such items shown on the return of the taxpayer for the preceding taxable year (the second preceding taxable year in the case of the first and second required installments for such taxable year).

(e) Exceptions

(1) Where tax is small amount

(2) Where no tax liability for preceding taxable yearNo addition to tax shall be imposed under subsection (a) for any taxable year if—

(A) the preceding taxable year was a taxable year of 12 months,

(B) the individual did not have any liability for tax for the preceding taxable year, and

(3) Waiver in certain cases

(A) In general

(B) Newly retired or disabled individualsNo addition to tax shall be imposed under subsection (a) with respect to any underpayment if the Secretary determines that—

(i) the taxpayer—(I) retired after having attained age 62, or(II) became disabled,

in the taxable year for which estimated payments were required to be made or in the taxable year preceding such taxable year, and

(ii) such underpayment was due to reasonable cause and not to willful neglect.

(f) Tax computed after application of credits against taxFor purposes of this section, the term “tax” means—

(1) the tax imposed by chapter 1 (other than any increase in such tax by reason of section 143(m)), plus

(2) the tax imposed by chapter 2, plus

(3) the tax imposed by chapter 2A, minus

(4) the credits against tax provided by part IV of subchapter A of chapter 1, other than the credit against tax provided by section 31 (relating to tax withheld on wages).

(g) Application of section in case of tax withheld on wages

(1) In general

(2) Separate applicationThe taxpayer may apply paragraph (1) separately with respect to—

(A) wage withholding, and

(B) all other amounts withheld for which credit is allowed under section 31.

(h) Special rule where return filed on or before January 31

(i) Special rules for farmers and fishermenFor purposes of this section—

(1) In generalIf an individual is a farmer or fisherman for any taxable year—

(A) there shall be only 1 required installment for the taxable year,

(B) the due date for such installment shall be January 15 of the following taxable year,

(C) the amount of such installment shall be equal to the required annual payment determined under subsection (d)(1)(B) by substituting “66⅔ percent” for “90 percent” and without regard to subparagraph (C) of subsection (d)(1), and

(D) subsection (h) shall be applied—

(i) by substituting “March 1” for “January 31”, and

(ii) by treating the required installment described in subparagraph (A) of this paragraph as the 4th required installment.

(2) Farmer or fisherman definedAn individual is a farmer or fisherman for any taxable year if—

(A) the individual’s gross income from farming or fishing (including oyster farming) for the taxable year is at least 66⅔ percent of the total gross income from all sources for the taxable year, or

(B) such individual’s gross income from farming or fishing (including oyster farming) shown on the return of the individual for the preceding taxable year is at least 66⅔ percent of the total gross income from all sources shown on such return.

(j) Special rules for nonresident aliensIn the case of a nonresident alien described in section 6072(c):

(1) Payable in 3 installments

(2) Time for payment of installments

(3) Amount of required installments

(A) First required installment

(B) Determination of applicable percentage

(k) Fiscal years and short years

(1) Fiscal years

(2) Short taxable year

(l) Estates and trusts

(1) In general

(2) Exception for estates and certain trustsWith respect to any taxable year ending before the date 2 years after the date of the decedent’s death, this section shall not apply to—

(A) the estate of such decedent, or

(B) any trust—

(i) all of which was treated (under subpart E of part I of subchapter J of chapter 1) as owned by the decedent, and

(ii) to which the residue of the decedent’s estate will pass under his will (or, if no will is admitted to probate, which is the trust primarily responsible for paying debts, taxes, and expenses of administration).

(3) Exception for charitable trusts and private foundations

(4) Special rule for annualizations

(m) Special rule for Medicare tax

(n) Regulations

(Aug. 16, 1954, ch. 736, 68A Stat. 823; Pub. L. 87–682, § 1(a)(4), Sept. 25, 1962, 76 Stat. 575; Pub. L. 89–368, title I, §§ 102(b)(1)–(3), 103(a), Mar. 15, 1966, 80 Stat. 62–64; Pub. L. 91–172, title III, § 301(b)(13), Dec. 30, 1969, 83 Stat. 586; Pub. L. 92–5, title II, § 203(b)(7), Mar. 17, 1971, 85 Stat. 11; Pub. L. 92–336, title II, § 203(b)(7), July 1, 1972, 86 Stat. 420; Pub. L. 93–66, title II, § 203(b)(7), (d), July 9, 1973, 87 Stat. 153; Pub. L. 93–233, § 5(b)(7), (d), Dec. 31, 1973, 87 Stat. 954; Pub. L. 93–625, § 7(c), Jan. 3, 1975, 88 Stat. 2115; Pub. L. 94–455, title XIX, § 1906(a)(35), (b)(13)(A), Oct. 4, 1976, 90 Stat. 1829, 1834; Pub. L. 95–30, title I, § 102(b)(16), May 23, 1977, 91 Stat. 139; Pub. L. 95–600, title IV, § 421(e)(9), Nov. 6, 1978, 92 Stat. 2877; Pub. L. 97–34, title VI, § 601(a)(6)(A), title VII, § 725(b), (c)(5), Aug. 13, 1981, 95 Stat. 336, 346; Pub. L. 97–248, title II, § 207(d)(7), formerly § 207(c)(7), title III, §§ 307(a)(14), 308(a), 328(a), Sept. 3, 1982, 96 Stat. 420, 590, 591, 618, renumbered § 207(d)(7), Pub. L. 97–448, title III, § 306(a)(1)(A)(i), Jan. 12, 1983, 96 Stat. 2400; Pub. L. 97–448, title I, §§ 106(a)(4)(C), 107(c)(1), title II, § 201(j)(3), Jan. 12, 1983, 96 Stat. 2390, 2391, 2396; Pub. L. 98–67, title I, § 102(a), Aug. 5, 1983, 97 Stat. 369; Pub. L. 98–369, div. A, title IV, § 411, July 18, 1984, 98 Stat. 788; Pub. L. 99–514, title XIV, § 1404(a), title XV, §§ 1511(c)(14), 1541(a), (b), title XVIII, § 1841, Oct. 22, 1986, 100 Stat. 2713, 2745, 2751, 2852; Pub. L. 100–418, title I, § 1941(b)(6)(A), Aug. 23, 1988, 102 Stat. 1324; Pub. L. 100–647, title I, § 1014(d)(1), (2), title IV, § 4005(g)(5), Nov. 10, 1988, 102 Stat. 3560, 3651; Pub. L. 101–239, title VII, § 7811(j)(5), (6), Dec. 19, 1989, 103 Stat. 2411, 2412; Pub. L. 102–164, title IV, § 403(a), (b), Nov. 15, 1991, 105 Stat. 1062, 1064; Pub. L. 103–66, title XIII, § 13214(a), (b), Aug. 10, 1993, 107 Stat. 475; Pub. L. 103–465, title VII, § 711(b), Dec. 8, 1994, 108 Stat. 4998; Pub. L. 105–34, title X, § 1091(a), title XII, § 1202(a), Aug. 5, 1997, 111 Stat. 962, 994; Pub. L. 105–277, div. J, title II, § 2003(a), Oct. 21, 1998, 112 Stat. 2681–901; Pub. L. 106–170, title V, § 531(a), Dec. 17, 1999, 113 Stat. 1928; Pub. L. 111–5, div. B, title I, § 1212, Feb. 17, 2009, 123 Stat. 336; Pub. L. 111–152, title I, § 1402(a)(2), (b)(2), Mar. 30, 2010, 124 Stat. 1062, 1063; Pub. L. 115–141, div. U, title IV, § 401(a)(301), (302), (b)(48), (49), (d)(1)(D)(xix), Mar. 23, 2018, 132 Stat. 1199, 1204, 1205, 1208.)

§ 6655. Failure by corporation to pay estimated income tax

(a) Addition to taxExcept as otherwise provided in this section, in the case of any underpayment of estimated tax by a corporation, there shall be added to the tax under chapter 1 for the taxable year an amount determined by applying—

(1) the underpayment rate established under section 6621,

(2) to the amount of the underpayment,

(3) for the period of the underpayment.

(b) Amount of underpayment; period of underpaymentFor purposes of subsection (a)—

(1) AmountThe amount of the underpayment shall be the excess of—

(A) the required installment, over

(B) the amount (if any) of the installment paid on or before the due date for the installment.

(2) Period of underpaymentThe period of the underpayment shall run from the due date for the installment to whichever of the following dates is the earlier—

(A) the 15th day of the 4th month following the close of the taxable year, or

(B) with respect to any portion of the underpayment, the date on which such portion is paid.

(3) Order of crediting payments

(1) Payable in 4 installments

(2) Time for payment of installments

(d) Amount of required installmentsFor purposes of this section—

(1) Amount

(A) In general

(B) Required annual paymentExcept as otherwise provided in this subsection, the term “required annual payment” means the lesser of—

(i) 100 percent of the tax shown on the return for the taxable year (or, if no return is filed, 100 percent of the tax for such year), or

(ii) 100 percent of the tax shown on the return of the corporation for the preceding taxable year.

Clause (ii) shall not apply if the preceding taxable year was not a taxable year of 12 months, or the corporation did not file a return for such preceding taxable year showing a liability for tax.

(2) Large corporations required to pay 100 percent of current year tax

(A) In general

(B) May use last year’s tax for 1st installment

(e) Lower required installment where annualized income installment or adjusted seasonal installment is less than amount determined under subsection (d)

(1) In generalIn the case of any required installment, if the corporation establishes that the annualized income installment or the adjusted seasonal installment is less than the amount determined under subsection (d)(1) (as modified by paragraphs (2) and (3) of subsection (d))—

(A) the amount of such required installment shall be the annualized income installment (or, if lesser, the adjusted seasonal installment), and

(B) any reduction in a required installment resulting from the application of this paragraph shall be recaptured by increasing the amount of the next required installment determined under subsection (d)(1) (as so modified) by the amount of such reduction (and by increasing subsequent required installments to the extent that the reduction has not previously been recaptured under this subparagraph).

(2) Determination of annualized income installment

(A) In generalIn the case of any required installment, the annualized income installment is the excess (if any) of—

(i) an amount equal to the applicable percentage of the tax for the taxable year computed by placing on an annualized basis the taxable income, adjusted financial statement income (as defined in section 56A), and modified taxable income—(I) for the first 3 months of the taxable year, in the case of the 1st required installment,(II) for the first 3 months of the taxable year, in the case of the 2nd required installment,(III) for the first 6 months of the taxable year in the case of the 3rd required installment, and(IV) for the first 9 months of the taxable year, in the case of the 4th required installment, over

(ii) the aggregate amount of any prior required installments for the taxable year.

(B) Special rulesFor purposes of this paragraph—

(i) Annualization

(ii) Applicable percentage

(iii) Modified taxable income

(i) If the taxpayer makes an election under this clause—(I) subclause (I) of subparagraph (A)(i) shall be applied by substituting “2 months” for “3 months”,(II) subclause (II) of subparagraph (A)(i) shall be applied by substituting “4 months” for “3 months”,(III) subclause (III) of subparagraph (A)(i) shall be applied by substituting “7 months” for “6 months”, and(IV) subclause (IV) of subparagraph (A)(i) shall be applied by substituting “10 months” for “9 months”.

(ii) If the taxpayer makes an election under this clause—(I) subclause (II) of subparagraph (A)(i) shall be applied by substituting “5 months” for “3 months”,(II) subclause (III) of subparagraph (A)(i) shall be applied by substituting “8 months” for “6 months”, and(III) subclause (IV) of subparagraph (A)(i) shall be applied by substituting “11 months” for “9 months”.

(iii) An election under clause (i) or (ii) shall apply to the taxable year for which made and such an election shall be effective only if made on or before the date required for the payment of the first required installment for such taxable year.

(3) Determination of adjusted seasonal installment

(A) In generalIn the case of any required installment, the amount of the adjusted seasonal installment is the excess (if any) of—

(i) 100 percent of the amount determined under subparagraph (C), over

(ii) the aggregate amount of all prior required installments for the taxable year.

(B) Limitation on application of paragraph

(C) Determination of amountThe amount determined under this subparagraph for any installment shall be determined in the following manner—

(i) take the taxable income for all months during the taxable year preceding the filing month,

(ii) divide such amount by the base period percentage for all months during the taxable year preceding the filing month,

(iii) determine the tax on the amount determined under clause (ii), and

(iv) multiply the tax computed under clause (iii) by the base period percentage for the filing month and all months during the taxable year preceding the filing month.

(D) Definitions and special rulesFor purposes of this paragraph—

(i) Base period percentage

(ii) Filing month

(iii) Reorganization, etc.

(4) Treatment of subpart F income

(A) In general

(B) Prior year safe harbor

(i) In generalIf a taxpayer elects to have this subparagraph apply for any taxable year—(I) subparagraph (A) shall not apply, and(II) for purposes of computing any annualized income installment for such taxable year, the taxpayer shall be treated as having received ratably during such taxable year items of income and credit described in subparagraph (A) in an amount equal to 115 percent of the amount of such items shown on the return of the taxpayer for the preceding taxable year (the second preceding taxable year in the case of the first and second required installments for such taxable year).

(ii) Special rule for noncontrolling shareholder(I) In general(II) Noncontrolling shareholder

(5) Treatment of certain REIT dividends

(A) In general

(B) Closely held REIT

(f) Exception where tax is small amount

(g) Definitions and special rules

(1) TaxFor purposes of this section, the term “tax” means the excess of—

(A) the sum of—

(i) the tax imposed by section 11 or subchapter L of chapter 1, whichever applies,

(ii) the tax imposed by section 55,

(iii) the tax imposed by section 59A, plus

(iv) the tax imposed by section 887, over

(B) the credits against tax provided by part IV of subchapter A of chapter 1.

For purposes of the preceding sentence, in the case of a foreign corporation subject to taxation under section 11 or 1201(a), or under subchapter L of chapter 1, the tax imposed by section 881 shall be treated as a tax imposed by section 11.

(2) Large corporation

(A) In general

(B) Rules for applying subparagraph (A)

(i) Testing period

(ii) Members of controlled group

(iii) Certain carrybacks and carryovers not taken into account

(3) Certain tax-exempt organizationsFor purposes of this section—

(A) Any organization subject to the tax imposed by section 511, and any private foundation, shall be treated as a corporation subject to tax under section 11.

(B) Any tax imposed by section 511, and any tax imposed by section 1 or 4940 on a private foundation, shall be treated as a tax imposed by section 11.

(C) Any reference to taxable income shall be treated as including a reference to unrelated business taxable income or net investment income (as the case may be).

In the case of any organization described in subparagraph (A), subsection (b)(2)(A) shall be applied by substituting “5th month” for “4th month”, subsection (e)(2)(A) shall be applied by substituting “2 months” for “3 months” in clause (i)(I), the election under clause (i) of subsection (e)(2)(C) may be made separately for each installment, and clause (ii) of subsection (e)(2)(C) shall not apply. In the case of a private foundation, subsection (c)(2) shall be applied by substituting “May 15” for “April 15”.

(4) Application of section to certain taxes imposed on S corporationsIn the case of an S corporation, for purposes of this section—

(A) The following taxes shall be treated as imposed by section 11:

(i) The tax imposed by section 1374(a).

(ii) The tax imposed by section 1375(a).

(iii) Any tax for which the S corporation is liable by reason of section 1371(d)(2).

(B) Paragraph (2) of subsection (d) shall not apply.

“(ii) the sum of—“(I) the amount determined under clause (i) by only taking into account the taxes referred to in clauses (i) and (iii) of subsection (g)(4)(A), and“(II) 100 percent of the tax imposed by section 1375(a) which was shown on the return of the corporation for the preceding taxable year.”

(D) The requirement in the last sentence of subsection (d)(1)(B) that the return for the preceding taxable year show a liability for tax shall not apply.

(E) Subsection (b)(2)(A) shall be applied by substituting “3rd month” for “4th month”.

(F) Any reference in subsection (e) to taxable income shall be treated as including a reference to the net recognized built-in gain or the excess passive income (as the case may be).

(h) Excessive adjustment under section 6425

(1) Addition to tax

(2) Excessive amountFor purposes of paragraph (1), the excessive amount is equal to the amount of the adjustment or (if smaller) the amount by which—

(A) the income tax liability (as defined in section 6425(c)) for the taxable year as shown on the return for the taxable year, exceeds

(B) the estimated income tax paid during the taxable year, reduced by the amount of the adjustment.

(i) Fiscal years and short years

(1) Fiscal years

(2) Short taxable year

(j) Regulations

(Aug. 16, 1954, ch. 736, 68A Stat. 825; Pub. L. 88–272, title I, § 122(c), Feb. 26, 1964, 78 Stat. 28; Pub. L. 90–364, title I, § 103(c), (d)(2), (e)(1), June 28, 1968, 82 Stat. 262, 264; Pub. L. 93–625, § 7(c), Jan. 3, 1975, 88 Stat. 2115; Pub. L. 94–455, title XIX, § 1906(b)(3)(A)–(C)(i), (13)(A), Oct. 4, 1976, 90 Stat. 1833, 1834; Pub. L. 95–600, title III, § 301(b)(20)(B), Nov. 6, 1978, 92 Stat. 2824; Pub. L. 96–499, title XI, § 1111(a), (b), Dec. 5, 1980, 94 Stat. 2681, 2682; Pub. L. 97–34, title VI, § 601(a)(6)(B), title VII, § 731(a), (b), Aug. 13, 1981, 95 Stat. 336, 346, 347; Pub. L. 97–248, title II, § 234(a), (c), (d), Sept. 3, 1982, 96 Stat. 503, 504; Pub. L. 97–448, title II, § 201(j)(4), Jan. 12, 1983, 96 Stat. 2396; Pub. L. 99–499, title V, § 516(b)(4)(D), Oct. 17, 1986, 100 Stat. 1771; Pub. L. 99–514, title VII, § 701(d)(3), title XV, § 1511(c)(15), Oct. 22, 1986, 100 Stat. 2342, 2745; Pub. L. 100–203, title X, § 10301(a), Dec. 22, 1987,

§ 6656. Failure to make deposit of taxes

(a) Underpayment of deposits

(b) DefinitionsFor purposes of subsection (a)—

(1) Applicable percentage

(A) In generalExcept as provided in subparagraph (B), the term “applicable percentage” means—

(i) 2 percent if the failure is for not more than 5 days,

(ii) 5 percent if the failure is for more than 5 days but not more than 15 days, and

(iii) 10 percent if the failure is for more than 15 days.

(B) Special ruleIn any case where the tax is not deposited on or before the earlier of—

(i) the day 10 days after the date of the first delinquency notice to the taxpayer under section 6303, or

(ii) the day on which notice and demand for immediate payment is given under section 6861 or 6862 or the last sentence of section 6331(a),

the applicable percentage shall be 15 percent.

(2) Underpayment

(c) Exception for first-time depositors of employment taxesThe Secretary may waive the penalty imposed by subsection (a) on a person’s inadvertent failure to deposit any employment tax if—

(1) such person meets the requirements referred to in section 7430(c)(4)(A)(ii),

(2) such failure—

(A) occurs during the first quarter that such person was required to deposit any employment tax; or

(B) if such person is required to change the frequency of deposits of any employment tax, relates to the first deposit to which such change applies, and

(3) the return of such tax was filed on or before the due date.

For purposes of this subsection, the term “employment taxes” means the taxes imposed by subtitle C.

(d) Authority to abate penalty where deposit sent to Secretary

(e) Designation of periods to which deposits apply

(1) In general

(2) Time for making designation

(Aug. 16, 1954, ch. 736, 68A Stat. 826;

§ 6657. Bad checks

If any instrument in payment, by any commercially acceptable means, of any amount receivable under this title is not duly paid, in addition to any other penalties provided by law, there shall be paid as a penalty by the person who tendered such instrument, upon notice and demand by the Secretary, in the same manner as tax, an amount equal to 2 percent of the amount of such instrument, except that if the amount of such instrument is less than $1,250, the penalty under this section shall be $25 or the amount of such instrument, whichever is the lesser. This section shall not apply if the person tendered such instrument in good faith and with reasonable cause to believe that it would be duly paid.

(Aug. 16, 1954, ch. 736, 68A Stat. 826; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 100–647, title V, § 5071(a), Nov. 10, 1988, 102 Stat. 3681; Pub. L. 110–28, title VIII, § 8245(a), May 25, 2007, 121 Stat. 200; Pub. L. 111–198, § 3(a), July 2, 2010, 124 Stat. 1356.)

§ 6658. Coordination with title 11

(a) Certain failures to pay taxNo addition to the tax shall be made under section 6651, 6654, or 6655 for failure to make timely payment of tax with respect to a period during which a case is pending under title 11 of the United States Code—

(1) if such tax was incurred by the estate and the failure occurred pursuant to an order of the court finding probable insufficiency of funds of the estate to pay administrative expenses, or

(2) if—

(A) such tax was incurred by the debtor before the earlier of the order for relief or (in the involuntary case) the appointment of a trustee, and

(B)

(i) the petition was filed before the due date prescribed by law (including extensions) for filing a return of such tax, or

(ii) the date for making the addition to the tax occurs on or after the day on which the petition was filed.

(b) Exception for collected taxes

(Added Pub. L. 96–589, § 6(e)(1), Dec. 24, 1980, 94 Stat. 3408.)

[§§ 6659 to 6661. Repealed. Pub. L. 101–239, title VII, § 7721(c)(2), Dec. 19, 1989, 103 Stat. 2399]