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Title 26 — Internal Revenue CodeRelease 119-73

§6706 Original issue discount information requirements

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 › § 6706

Last updated Apr 6, 2026|Official source

Summary

If the issuer leaves out required information on a debt instrument, the issuer must pay $50 for each instrument. If the issuer fails to give required information for an entire issue on time, the penalty is 1% of the issue’s total price, capped at $50,000. No penalty applies if the failure was due to reasonable cause and not willful neglect. The usual tax deficiency rules do not apply when these penalties are assessed or collected.

Full Legal Text

Title 26, §6706

Internal Revenue Code — Source: USLM XML via OLRC

(a)In the case of a failure to set forth on a debt instrument the information required to be set forth on such instrument under section 1275(c)(1), unless it is shown that such failure is due to reasonable cause and not to willful neglect, the issuer shall pay a penalty of $50 for each instrument with respect to which such a failure exists.
(b)Any issuer who fails to furnish information required under section 1275(c)(2) with respect to any issue of debt instruments on the date prescribed therefor (determined with regard to any extension of time for filing) shall pay a penalty equal to 1 percent of the aggregate issue price of such issue, unless it is shown that such failure is due to reasonable cause and not willful neglect. The amount of the penalty imposed under the preceding sentence with respect to any issue of debt instruments shall not exceed $50,000 for such issue.
(c)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 this section.

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Section effective on day 30 days after July 18, 1984, see section 44(h) of Pub. L. 98–369, set out as a note under section 1271 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 6706

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73