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Title 26 — Internal Revenue CodeRelease 119-73

§6703 Rules applicable to penalties under sections 6700, 6701, and 6702

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 › § 6703

Last updated Apr 6, 2026|Official source

Summary

The IRS must prove that a person is liable for a penalty under sections 6700, 6701, or 6702. The usual deficiency rules in Subchapter B of chapter 63 do not apply when the IRS assesses or tries to collect these penalties. If the IRS sends a notice of a penalty under 6700 or 6701 and the person pays at least 15% of the penalty and files a refund claim within 30 days, the IRS cannot seize property or start a court case to collect the rest until the matter is finally decided. A court may stop a seizure or suit that starts while collection is barred (even though section 7421(a) usually limits such suits). If the refund claim is denied, or if 6 months pass after filing, the person has 30 days to start a federal district court case to decide liability; if they do not, the protection ends the day after that 30-day period. The time limit for the IRS to collect under section 6502 is paused while collection is barred.

Full Legal Text

Title 26, §6703

Internal Revenue Code — Source: USLM XML via OLRC

(a)In any proceeding involving the issue of whether or not any person is liable for a penalty under section 6700, 6701, or 6702, the burden of proof with respect to such issue shall be on the Secretary.
(b)Subchapter B of chapter 63 (relating to deficiency procedures) shall not apply with respect to the assessment or collection of the penalties provided by section 6700, 6701, and 6702.
(c)(1)If, within 30 days after the day on which notice and demand of any penalty under section 6700 or 6701 is made against any person, such person pays an amount which is not less than 15 percent of the amount of such penalty and files a claim for refund of the amount so paid, no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until the final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421(a), the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court. Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of such penalty in a proceeding begun as provided in paragraph (2).
(2)If, within 30 days after the day on which his claim for refund of any partial payment of any penalty under section 6700 or 6701 is denied (or, if earlier, within 30 days after the expiration of 6 months after the day on which he filed the claim for refund), the person fails to begin a proceeding in the appropriate United States district court for the determination of his liability for such penalty, paragraph (1) shall cease to apply with respect to such penalty, effective on the day following the close of the applicable 30-day period referred to in this paragraph.
(3)The running of the period of limitations provided in section 6502 on the collection by levy or by a proceeding in court in respect of any penalty described in paragraph (1) shall be suspended for the period during which the Secretary is prohibited from collecting by levy or a proceeding in court.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1989—Subsec. (c)(1). Pub. L. 101–239, § 7737(a), inserted at end “Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of such penalty in a proceeding begun as provided in paragraph (2).” Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”. Subsec. (c)(2). Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”.

Statutory Notes and Related Subsidiaries

Effective Date

of 1989 Amendment Pub. L. 101–239, title VII, § 7736(b), Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendment made by subsection (a) [amending this section] shall apply to returns filed after December 31, 1989.”

Effective Date

Pub. L. 97–248, title III, § 322(c), Sept. 3, 1982, 96 Stat. 613, provided that: “The

Amendments

made by this section [enacting this section] shall take effect on the day after the date of the enactment of this Act [Sept. 3, 1982].”

Reference

Citations & Metadata

Citation

26 U.S.C. § 6703

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73