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Title 26, Internal Revenue CodeRelease 119-110

§6706 Original Issue Discount Information Requirements

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 › § 6706

Last updated Sep 22, 2026|Official source

Summary

Makes people or companies that issue debt pay fines if they don't put required information on the debt or don't give that information to the IRS. If the needed info is missing on a debt paper, the issuer pays $50 for each one unless they can show a reasonable cause and not willful neglect. If the issuer misses the filing deadline to give the IRS the info, the fine is 1% of the total issue price for that issue, up to $50,000, unless the failure was for reasonable cause and not on purpose. The normal tax dispute rules do not apply when these fines are assessed or collected.

Full Legal Text

Title 26, §6706

Internal Revenue Code, Source: USLM XML via OLRC

(a)Failure to show information on debt instrument
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)Failure to furnish information to Secretary
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)Deficiency procedures not to apply
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

Sep 22, 2026

Release point: 119-110