§6695B Penalty for Substantial Misstatements on Certification Provided by Supplier

Summary

Imposes a penalty on a person who gives a certification under clause (iii)(II)(bb) of section 7701(a)(52)(D) about a manufactured product, its parts, or materials, when the person knew or should have known the certification would be used for a decision under that section. The penalty applies if the person also knew or should have known the certification was false about either whether a prohibited foreign entity made the item or about the total direct costs or total direct material costs for items not made by a prohibited foreign entity, and that false information caused an applicable energy credit (as defined in section 6662(m)(2)) to be disallowed and an income tax understatement for the year that is more than the lesser of 5 percent of the tax shown on the return or $100,000. The penalty equals the larger of 10 percent of the underpayment caused by the false information or $5,000. No penalty applies if the person proves the false information was due to reasonable cause and not willful neglect. Any word used here that is also used in section 7701(a)(52) has the same meaning as in that section.