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

Summary

If a supplier gives a required tax certification about a made product or its parts, and the supplier knows or should know the certification will be used for a tax decision, the supplier must pay a penalty if they also know or should know the certification is false about either (1) whether a banned foreign entity made the item, or (2) the total direct costs or direct material costs reported for items not made by a banned foreign entity, and that false information caused denial of an energy tax credit and a tax understatement that is more than the smaller of 5 percent of the tax shown on the return or $100,000. The penalty equals the larger of 10 percent of the tax shortfall caused by the false certification or $5,000. No penalty applies if the supplier proves the mistake was due to reasonable cause and not willful neglect. Words taken from a related tax rule keep the same meanings they have there.