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Title 26 — Internal Revenue CodeRelease 119-73

§6658 Coordination with Title 11

Title 26 › Subtitle Subtitle F— Procedure and Administration › Chapter 68— ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter A— Additions to the Tax and Additional Amounts › Part I— GENERAL PROVISIONS › § 6658

Last updated Apr 6, 2026|Official source

Summary

While a bankruptcy case is pending, certain late-payment penalties do not apply. There is no penalty if the bankruptcy estate owed the tax and a court order found the estate probably lacked funds to pay administrative expenses. There is also no penalty for tax the debtor owed before the bankruptcy began, if the petition was filed before the return's due date or the penalty date falls on or after the filing date. This relief never covers taxes withheld or collected from others, like payroll taxes, that must be turned over to the government.

Full Legal Text

Title 26, §6658

Internal Revenue Code — Source: USLM XML via OLRC

(a)No 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)Subsection (a) shall not apply to any liability for an addition to the tax which arises from the failure to pay or deposit a tax withheld or collected from others and required to be paid to the United States.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 6658, act Aug. 16, 1954, ch. 736, 68A Stat. 826, authorized inclusion as part of the tax a 25 percent penalty in cases of violations or attempted violations of section 6851 of this title, prior to repeal by Pub. L. 96–167, § 6(a), Dec. 29, 1979, 93 Stat. 1276.

Statutory Notes and Related Subsidiaries

Effective Date

Section effective Oct. 1, 1979, but not applicable to proceedings under Title 11, Bankruptcy, commenced before Oct. 1, 1979, see section 7(e) of Pub. L. 96–589, set out as an

Effective Date

of 1980 Amendment note under section 108 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 6658

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73