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Title 26 — Internal Revenue CodeRelease 119-73not60

§6706 Original Issue Discount Information Requirements

Title 26 › Subtitle Subtitle F— Procedure and Administration › Chapter 68— ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter B— Assessable Penalties › Part I— GENERAL PROVISIONS › § 6706

Last updated Apr 5, 2026|Official source

Summary

Issuers must pay penalties when they do not put required tax information on debt instruments or do not give required tax information about an issue. If the required information is missing from a single debt instrument, the penalty is $50 for each instrument unless the issuer can show the mistake had a valid reason and was not done on purpose. If an issuer fails to give the required information for a whole issue by the deadline (including any filing extensions), the penalty is 1 percent of the issue’s total price, but it cannot be more than $50,000 for that issue unless the issuer proves a valid, nonintentional reason. The normal IRS deficiency review procedures do not apply to assessing or collecting these penalties.

Full Legal Text

Title 26, §6706

Internal Revenue Code — Source: USLM XML via OLRC

(a)In the case of a failure to set forth on a debt instrument the information required to be set forth on such instrument under section 1275(c)(1), unless it is shown that such failure is due to reasonable cause and not to willful neglect, the issuer shall pay a penalty of $50 for each instrument with respect to which such a failure exists.
(b)Any issuer who fails to furnish information required under section 1275(c)(2) with respect to any issue of debt instruments on the date prescribed therefor (determined with regard to any extension of time for filing) shall pay a penalty equal to 1 percent of the aggregate issue price of such issue, unless it is shown that such failure is due to reasonable cause and not willful neglect. The amount of the penalty imposed under the preceding sentence with respect to any issue of debt instruments shall not exceed $50,000 for such issue.
(c)Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by this section.

Legislative History

Notes & Related Subsidiaries

Statutory Notes and Related Subsidiaries

Effective Date

Section effective on day 30 days after July 18, 1984, see section 44(h) of Pub. L. 98–369, set out as a note under section 1271 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 6706

Title 26 — Internal Revenue Code

Last Updated

Apr 5, 2026

Release point: 119-73not60