§6689 — Title 26 Internal Revenue Code | U.S. Code

Summary

If your foreign taxes are redetermined and you fail to notify the IRS by the deadline set in regulations, a penalty is added to the resulting tax deficiency: 5 percent for the first month plus 5 percent more for each additional month or part of one, capped at 25 percent of the deficiency. No penalty applies if the failure was due to reasonable cause rather than willful neglect.

Title 26, §6689

Internal Revenue Code — Source: USLM XML via OLRC

(a)If the taxpayer fails to notify the Secretary (on or before the date prescribed by regulations for giving such notice) of a foreign tax redetermination, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the deficiency attributable to such redetermination an amount (not in excess of 25 percent of the deficiency) determined as follows—

(1)5 percent of the deficiency if the failure is for not more than 1 month, with

(2)an additional 5 percent of the deficiency for each month (or fraction thereof) during which the failure continues.

(b)For purposes of this section, the term “foreign tax redetermination” means any redetermination for which a notice is required under subsection (c) of section 905 or paragraph (2) of section 404A(g).

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 6689, added Pub. L. 93–17, § 3(d)(2), Apr. 10, 1973, 87 Stat. 16, related to failure by certain foreign issuers and obligors to comply with United States investment equalization tax requirements, prior to repeal by Pub. L. 94–455, title XIX, § 1904(b)(10)(E)(i), Oct. 4, 1976, 90 Stat. 1817.

Statutory Notes and Related Subsidiaries

Effective Date

For applicability of section with respect to employer contributions or accruals for taxable years beginning after Dec. 31, 1979, election to apply

Amendments

retroactively with respect to foreign subsidiaries, allowance of prior deductions in case of certain funded branch plans, and time and manner for making elections, see section 2(e) of Pub. L. 96–603, set out as a note under section 404A of this title.

§6689 Failure to File Notice of Redetermination of Foreign Tax