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Title 26, Internal Revenue CodeRelease 119-110

§6704 Failure to Keep Records Necessary to Meet Reporting Requirements Under Section 6047(d)

Title 26 › Subtitle F — Procedure and Administration › CHAPTER 68 — ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter B — Assessable Penalties › PART I — GENERAL PROVISIONS › § 6704

Last updated Sep 22, 2026|Official source

Summary

If someone who must or might have to report information under section 6047(d) does not keep the records the rules require for current or future reporting, they must pay a yearly penalty for each calendar year the records are missing. The penalty is $50 for each person affected that year, but it cannot be more than $50,000 for any one calendar year. No penalty is charged if the failure was for a good reason and not intentional. No penalty is charged if the failure is caused by an earlier failure already penalized and the person has tried to fix it. No penalty is charged for failures tied to events before January 1, 1983, if the person has tried to correct them.

Full Legal Text

Title 26, §6704

Internal Revenue Code, Source: USLM XML via OLRC

(a)Liability for penalty
Any person who—
(1)has a duty to report or may have a duty to report any information under section 6047(d), and
(2)fails to keep such records as may be required by regulations prescribed under section 6047(d) for the purpose of providing the necessary data base for either current reporting or future reporting,
shall pay a penalty for each calendar year for which there is any failure to keep such records.
(b)Amount of penalty
(1)In general
The penalty of any person for any calendar year shall be $50, multiplied by the number of individuals with respect to whom such failure occurs in such year.
(2)Maximum amount
The penalty under this section of any person for any calendar year shall not exceed $50,000.
(c)Exceptions
(1)Reasonable cause
No penalty shall be imposed by this section on any person for any failure which is shown to be due to reasonable cause and not to willful neglect.
(2)Inability to correct previous failure
No penalty shall be imposed by this section on any failure by a person if such failure is attributable to a prior failure which has been penalized under this section and with respect to which the person has made all reasonable efforts to correct the failure.
(3)Pre-1983 failures
No penalty shall be imposed by this section on any person for any failure which is attributable to a failure occurring before January 1, 1983, if the person has made all reasonable efforts to correct such pre-1983 failure.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Amendments

1986—Pub. L. 99–514 substituted “section 6047(d)” for “section 6047(e)” in section catchline and in subsec. (a).

Statutory Notes and Related Subsidiaries

Effective Date

of 1986 AmendmentAmendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Effective Date

Section effective Jan. 1, 1985, see section 334(e)(3) of Pub. L. 97–248, set out as a note under section 3405 of this title. Plan

Amendments

Not Required Until January 1, 1989For provisions directing that if any

Amendments

made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 6704

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110