Title 26 — Internal Revenue CodeRelease 119-73
§6677 Failure to file information with respect to certain foreign trusts
Title 26 › Subtitle Subtitle F— - Procedure and Administration › Chapter CHAPTER 68— - ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter Subchapter B— - Assessable Penalties › Part PART I— - GENERAL PROVISIONS › § 6677
Summary
If someone who must file a notice or return under section 6048 misses the deadline or gives missing or wrong information, they must pay a penalty. The normal penalty is 35% of the "gross reportable amount." For the kind of return in 6048(b), the U.S. person named must pay and the rate is 5% instead of 35%. "Gross reportable amount" means one of three things depending on the mistake: the value of the property involved, the value of the trust assets treated as owned by the U.S. person at year end, or the amount of distributions. No penalty applies if the failure was for a good reason and not on purpose, but fear of foreign penalties for telling the information is not a good reason. The usual tax dispute rules do not apply when the IRS figures or collects these penalties.
Full Legal Text
Title 26, §6677
Internal Revenue Code — Source: USLM XML via OLRC
(a)In addition to any criminal penalty provided by law, if any notice or return required to be filed by section 6048—
(1)is not filed on or before the time provided in such section, or
(2)does not include all the information required pursuant to such section or includes incorrect information,
(b)In the case of a return required under section 6048(b)—
(1)the United States person referred to in such section shall be liable for the penalty imposed by subsection (a), and
(2)subsection (a) shall be applied by substituting “5 percent” for “35 percent”.
(c)For purposes of subsection (a), the term “gross reportable amount” means—
(1)the gross value of the property involved in the event (determined as of the date of the event) in the case of a failure relating to section 6048(a),
(2)the gross value of the portion of the trust’s assets at the close of the year treated as owned by the United States person in the case of a failure relating to section 6048(b)(1), and
(3)the gross amount of the distributions in the case of a failure relating to section 6048(c).
(d)No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. The fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause.
(e)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).
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
2010—Subsec. (a). Pub. L. 111–147, in concluding provisions, inserted “the greater of $10,000 or” before “35 percent” and substituted “At such time as the gross reportable amount with respect to any failure can be determined by the Secretary, any subsequent penalty imposed under this subsection with respect to such failure shall be reduced as necessary to assure that the aggregate amount of such penalties do not exceed the gross reportable amount (and to the extent that such aggregate amount already exceeds the gross reportable amount the Secretary shall refund such excess to the taxpayer).” for “In no event shall the penalty under this subsection with respect to any failure exceed the gross reportable amount.” 1996—Pub. L. 104–188, § 1901(b), substituted “information” for “information returns” in section catchline and amended text generally, substituting present provisions for former provisions which related to civil penalty in subsec. (a) and nonapplicability of deficiency procedures in subsec. (b). 1976—Subsec. (a). Pub. L. 94–455 inserted “(or, in the case of a failure with respect to section 6048(c), equal to 5 percent of the value of the corpus of the trust at the close of the taxable year)” after “transferred to a trust”. 1974—Subsec. (b). Pub. L. 93–406 substituted “and certain excise” for “chapter 42”. 1969—Subsec. (b). Pub. L. 91–172 inserted reference to chapter 42 taxes.
Statutory Notes and Related Subsidiaries
Effective Date
of 2010 Amendment Pub. L. 111–147, title V, § 535(b), Mar. 18, 2010, 124 Stat. 115, provided that: “The
Amendments
made by this section [amending this section] shall apply to notices and returns required to be filed after December 31, 2009.”
Effective Date
of 1996 AmendmentAmendment by Pub. L. 104–188, to the extent related to section 6048(a) of this title, applicable to reportable events (as defined in such section) occurring after Aug. 20, 1996, to the extent related to section 6048(b) of this title, applicable to taxable years of United States persons beginning after Dec. 31, 1995, and to the extent related to section 6048(c) of this title, applicable to distributions received after Aug. 20, 1996, see section 1901(d) of Pub. L. 104–188, set out as a note under section 6048 of this title.
Effective Date
of 1976 AmendmentAmendment by Pub. L. 94–455 applicable to taxable years ending after Dec. 31, 1975, but only in the case of foreign trusts created after
May 21, 1974 and transfer of property to foreign trusts after
May 21, 1974, see section 1013(f)(1) of Pub. L. 94–455, set out as a note under section 679 of this title.
Effective Date
of 1974 AmendmentAmendment by Pub. L. 93–406 applicable, except as otherwise provided in section 1017(c) through (i) of Pub. L. 93–406, for plan years beginning after Sept. 2, 1974, but, in the case of plans in existence on Jan. 1, 1974, amendment by Pub. L. 93–406 applicable for plan years beginning after Dec. 31, 1975, see section 1017 of Pub. L. 93–406, set out as an
Effective Date
Transitional Rules note under section 410 of this title.
Effective Date
of 1969 AmendmentAmendment by Pub. L. 91–172 effective Jan. 1, 1970, see section 101(k)(1) of Pub. L. 91–172, set out as an
Effective Date
note under section 4940 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 6677
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73