
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 106-554 Section 1(a)(7)]
[Document affected by Public Law 107-16 Section 801]
[CITE: 26USC6655]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
  CHAPTER 68--ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE 
                                PENALTIES
 
        Subchapter A--Additions to the Tax and Additional Amounts
 
                       PART I--GENERAL PROVISIONS
 
Sec. 6655. Failure by corporation to pay estimated income tax


(a) Addition to tax

    Except as otherwise provided in this section, in the case of any 
underpayment of estimated tax by a corporation, there shall be added to 
the tax under chapter 1 for the taxable year an amount determined by 
applying--
        (1) the underpayment rate established under section 6621,
        (2) to the amount of the underpayment,
        (3) for the period of the underpayment.

(b) Amount of underpayment; period of underpayment

    For purposes of subsection (a)--

                             (1) Amount

        The amount of the underpayment shall be the excess of--
            (A) the required installment, over
            (B) the amount (if any) of the installment paid on or before 
        the due date for the installment.

                     (2) Period of underpayment

        The period of the underpayment shall run from the due date for 
    the installment to whichever of the following dates is the earlier--
            (A) the 15th day of the 3rd month following the close of the 
        taxable year, or
            (B) with respect to any portion of the underpayment, the 
        date on which such portion is paid.

                   (3) Order of crediting payments

        For purposes of paragraph (2)(B), a payment of estimated tax 
    shall be credited against unpaid required installments in the order 
    in which such installments are required to be paid.

(c) Number of required installments; due dates

    For purposes of this section--

                    (1) Payable in 4 installments

        There shall be 4 required installments for each taxable year.

                (2) Time for payment of installments


     In the case of the following      required
                   installments:                      The due date is:

      1st.........................................            April 15
      2nd.........................................             June 15
      3rd.........................................        September 15
      4th.........................................          December 15.


(d) Amount of required installments

    For purposes of this section--

                             (1) Amount

        (A) In general

            Except as otherwise provided in this section, the amount of 
        any required installment shall be 25 percent of the required 
        annual payment.

        (B) Required annual payment

            Except as otherwise provided in this subsection, the term 
        ``required annual payment'' means the lesser of--
                (i) 100 percent of the tax shown on the return for the 
            taxable year (or, if no return is filed, 100 percent of the 
            tax for such year), or
                (ii) 100 percent of the tax shown on the return of the 
            corporation for the preceding taxable year.

    Clause (ii) shall not apply if the preceding taxable year was not a 
    taxable year of 12 months, or the corporation did not file a return 
    for such preceding taxable year showing a liability for tax.

       (2) Large corporations required to pay 100 percent of 
                              current year tax

        (A) In general

            Except as provided in subparagraph (B), clause (ii) of 
        paragraph (1)(B) shall not apply in the case of a large 
        corporation.

        (B) May use last year's tax for 1st installment

            Subparagraph (A) shall not apply for purposes of determining 
        the amount of the 1st required installment for any taxable year. 
        Any reduction in such 1st installment by reason of the preceding 
        sentence shall be recaptured by increasing the amount of the 
        next required installment determined under paragraph (1) by the 
        amount of such reduction.

(e) Lower required installment where annualized income installment or 
        adjusted seasonal installment is less than amount determined 
        under subsection (d)

                           (1) In general

        In the case of any required installment, if the corporation 
    establishes that the annualized income installment or the adjusted 
    seasonal installment is less than the amount determined under 
    subsection (d)(1) (as modified by paragraphs (2) and (3) of 
    subsection (d))--
            (A) the amount of such required installment shall be the 
        annualized income installment (or, if lesser, the adjusted 
        seasonal installment), and
            (B) any reduction in a required installment resulting from 
        the application of this paragraph shall be recaptured by 
        increasing the amount of the next required installment 
        determined under subsection (d)(1) (as so modified) by the 
        amount of such reduction (and by increasing subsequent required 
        installments to the extent that the reduction has not previously 
        been recaptured under this subparagraph).

         (2) Determination of annualized income installment

        (A) In general

            In the case of any required installment, the annualized 
        income installment is the excess (if any) of--
                (i) an amount equal to the applicable percentage of the 
            tax for the taxable year computed by placing on an 
            annualized basis the taxable income, alternative minimum 
            taxable income, and modified alternative minimum taxable 
            income--
                    (I) for the first 3 months of the taxable year, in 
                the case of the 1st required installment,
                    (II) for the first 3 months of the taxable year, in 
                the case of the 2nd required installment,
                    (III) for the first 6 months of the taxable year in 
                the case of the 3rd required installment, and
                    (IV) for the first 9 months of the taxable year, in 
                the case of the 4th required installment, over

                (ii) the aggregate amount of any prior required 
            installments for the taxable year.

        (B) Special rules

            For purposes of this paragraph--
            (i) Annualization

                The taxable income, alternative minimum taxable income, 
            and modified alternative minimum taxable income shall be 
            placed on an annualized basis under regulations prescribed 
            by the Secretary.
            (ii) Applicable percentage

  In the case of the following                            The applicable
    required installments:                                percentage is:
      1st........................................................    25  
                                                                        
      2nd........................................................    50  
                                                                        
      3rd........................................................    75  
                                                                        
      4th.....................................................    100.   
                                                                        
            (iii) Modified alternative minimum taxable income

                The term ``modified alternative minimum taxable income'' 
            has the meaning given to such term by section 59A(b).

        (C) Election for different annualization periods

            (i) If the taxpayer makes an election under this clause--
                (I) subclause (I) of subparagraph (A)(i) shall be 
            applied by substituting ``2 months'' for ``3 months'',
                (II) subclause (II) of subparagraph (A)(i) shall be 
            applied by substituting ``4 months'' for ``3 months'',
                (III) subclause (III) of subparagraph (A)(i) shall be 
            applied by substituting ``7 months'' for ``6 months'', and
                (IV) subclause (IV) of subparagraph (A)(i) shall be 
            applied by substituting ``10 months'' for ``9 months''.

            (ii) If the taxpayer makes an election under this clause--
                (I) subclause (II) of subparagraph (A)(i) shall be 
            applied by substituting ``5 months'' for ``3 months'',
                (II) subclause (III) of subparagraph (A)(i) shall be 
            applied by substituting ``8 months'' for ``6 months'', and
                (III) subclause (IV) of subparagraph (A)(i) shall be 
            applied by substituting ``11 months'' for ``9 months''.

            (iii) An election under clause (i) or (ii) shall apply to 
        the taxable year for which made and such an election shall be 
        effective only if made on or before the date required for the 
        payment of the first required installment for such taxable year.

         (3) Determination of adjusted seasonal installment

        (A) In general

            In the case of any required installment, the amount of the 
        adjusted seasonal installment is the excess (if any) of--
                (i) 100 percent of the amount determined under 
            subparagraph (C), over
                (ii) the aggregate amount of all prior required 
            installments for the taxable year.

        (B) Limitation on application of paragraph

            This paragraph shall apply only if the base period 
        percentage for any 6 consecutive months of the taxable year 
        equals or exceeds 70 percent.

        (C) Determination of amount

            The amount determined under this subparagraph for any 
        installment shall be determined in the following manner--
                (i) take the taxable income for all months during the 
            taxable year preceding the filing month,
                (ii) divide such amount by the base period percentage 
            for all months during the taxable year preceding the filing 
            month,
                (iii) determine the tax on the amount determined under 
            clause (ii), and
                (iv) multiply the tax computed under clause (iii) by the 
            base period percentage for the filing month and all months 
            during the taxable year preceding the filing month.

        (D) Definitions and special rules

            For purposes of this paragraph--
            (i) Base period percentage

                The base period percentage for any period of months 
            shall be the average percent which the taxable income for 
            the corresponding months in each of the 3 preceding taxable 
            years bears to the taxable income for the 3 preceding 
            taxable years.
            (ii) Filing month

                The term ``filing month'' means the month in which the 
            installment is required to be paid.
            (iii) Reorganization, etc.

                The Secretary may by regulations provide for the 
            determination of the base period percentage in the case of 
            reorganizations, new corporations, and other similar 
            circumstances.

          (4) Treatment of subpart F and section 936 income

        (A) In general

            Any amounts required to be included in gross income under 
        section 936(h) or 951(a) (and credits properly allocable 
        thereto) shall be taken into account in computing any annualized 
        income installment under paragraph (2) in a manner similar to 
        the manner under which partnership income inclusions (and 
        credits properly allocable thereto) are taken into account.

        (B) Prior year safe harbor

            (i) In general

                If a taxpayer elects to have this subparagraph apply for 
            any taxable year--
                    (I) subparagraph (A) shall not apply, and
                    (II) for purposes of computing any annualized income 
                installment for such taxable year, the taxpayer shall be 
                treated as having received ratably during such taxable 
                year items of income and credit described in 
                subparagraph (A) in an amount equal to 115 percent of 
                the amount of such items shown on the return of the 
                taxpayer for the preceding taxable year (the second 
                preceding taxable year in the case of the first and 
                second required installments for such taxable year).
            (ii) Special rule for noncontrolling shareholder

                (I) In general

                    If a taxpayer making the election under clause (i) 
                is a noncontrolling shareholder of a corporation, clause 
                (i)(II) shall be applied with respect to items of such 
                corporation by substituting ``100 percent'' for ``115 
                percent''.
                (II) Noncontrolling shareholder

                    For purposes of subclause (I), the term 
                ``noncontrolling shareholder'' means, with respect to 
                any corporation, a shareholder which (as of the 
                beginning of the taxable year for which the installment 
                is being made) does not own (within the meaning of 
                section 958(a)), and is not treated as owning (within 
                the meaning of section 958(b)), more than 50 percent (by 
                vote or value) of the stock in the corporation.

               (5) Treatment of certain REIT dividends

        (A) In general

            Any dividend received from a closely held real estate 
        investment trust by any person which owns (after application of 
        subsection (d)(5) of section 856) 10 percent or more (by vote or 
        value) of the stock or beneficial interests in the trust shall 
        be taken into account in computing annualized income 
        installments under paragraph (2) in a manner similar to the 
        manner under which partnership income inclusions are taken into 
        account.

        (B) Closely held REIT

            For purposes of subparagraph (A), the term ``closely held 
        real estate investment trust'' means a real estate investment 
        trust with respect to which 5 or fewer persons own (after 
        application of subsection (d)(5) of section 856) 50 percent or 
        more (by vote or value) of the stock or beneficial interests in 
        the trust.

(f) Exception where tax is small amount

    No addition to tax shall be imposed under subsection (a) for any 
taxable year if the tax shown on the return for such taxable year (or, 
if no return is filed, the tax) is less than $500.

(g) Definitions and special rules

                               (1) Tax

        For purposes of this section, the term ``tax'' means the excess 
    of--
            (A) the sum of--
                (i) the tax imposed by section 11 or 1201(a), or 
            subchapter L of chapter 1, whichever applies,
                (ii) the tax imposed by section 55,
                (iii) the tax imposed by section 59A, plus
                (iv) the tax imposed by section 887, over

            (B) the credits against tax provided by part IV of 
        subchapter A of chapter 1.

    For purposes of the preceding sentence, in the case of a foreign 
    corporation subject to taxation under section 11 or 1201(a), or 
    under subchapter L of chapter 1, the tax imposed by section 881 
    shall be treated as a tax imposed by section 11.

                        (2) Large corporation

        (A) In general

            For purposes of this section, the term ``large corporation'' 
        means any corporation if such corporation (or any predecessor 
        corporation) had taxable income of $1,000,000 or more for any 
        taxable year during the testing period.

        (B) Rules for applying subparagraph (A)

            (i) Testing period

                For purposes of subparagraph (A), the term ``testing 
            period'' means the 3 taxable years immediately preceding the 
            taxable year involved.
            (ii) Members of controlled group

                For purposes of applying subparagraph (A) to any taxable 
            year in the testing period with respect to corporations 
            which are component members of a controlled group of 
            corporations for such taxable year, the $1,000,000 amount 
            specified in subparagraph (A) shall be divided among such 
            members under rules similar to the rules of section 1561.
            (iii) Certain carrybacks and carryovers not taken 
                    into account

                For purposes of subparagraph (A), taxable income shall 
            be determined without regard to any amount carried to the 
            taxable year under section 172 or 1212(a).

                (3) Certain tax-exempt organizations

        For purposes of this section--
            (A) Any organization subject to the tax imposed by section 
        511, and any private foundation, shall be treated as a 
        corporation subject to tax under section 11.
            (B) Any tax imposed by section 511, and any tax imposed by 
        section 1 or 4940 on a private foundation, shall be treated as a 
        tax imposed by section 11.
            (C) Any reference to taxable income shall be treated as 
        including a reference to unrelated business taxable income or 
        net investment income (as the case may be).

    In the case of any organization described in subparagraph (A), 
    subsection (b)(2)(A) shall be applied by substituting ``5th month'' 
    for ``3rd month'', subsection (e)(2)(A) shall be applied by 
    substituting ``2 months'' for ``3 months'' in clause (i)(I), the 
    election under clause (i) of subsection (e)(2)(C) may be made 
    separately for each installment, and clause (ii) of subsection 
    (e)(2)(C) shall not apply. In the case of a private foundation, 
    subsection (c)(2) shall be applied by substituting ``May 15'' for 
    ``April 15''.

      (4) Application of section to certain taxes imposed on S 
                                corporations

        In the case of an S corporation, for purposes of this section--
            (A) The following taxes shall be treated as imposed by 
        section 11:
                (i) The tax imposed by section 1374(a) (or the 
            corresponding provisions of prior law).
                (ii) The tax imposed by section 1375(a).
                (iii) Any tax for which the S corporation is liable by 
            reason of section 1371(d)(2).

            (B) Paragraph (2) of subsection (d) shall not apply.
            (C) Clause (ii) of subsection (d)(1)(B) shall be applied as 
        if it read as follows:
                ``(ii) the sum of--
                    ``(I) the amount determined under clause (i) by only 
                taking into account the taxes referred to in clauses (i) 
                and (iii) of subsection (g)(4)(A), and
                    ``(II) 100 percent of the tax imposed by section 
                1375(a) which was shown on the return of the corporation 
                for the preceding taxable year.''

            (D) The requirement in the last sentence of subsection 
        (d)(1)(B) that the return for the preceding taxable year show a 
        liability for tax shall not apply.
            (E) Any reference in subsection (e) to taxable income shall 
        be treated as including a reference to the net recognized built-
        in gain or the excess passive income (as the case may be).

(h) Excessive adjustment under section 6425

                         (1) Addition to tax

        If the amount of an adjustment under section 6425 made before 
    the 15th day of the 3rd month following the close of the taxable 
    year is excessive, there shall be added to the tax under chapter 1 
    for the taxable year an amount determined at the underpayment rate 
    established under section 6621 upon the excessive amount from the 
    date on which the credit is allowed or the refund is paid to such 
    15th day.

                        (2) Excessive amount

        For purposes of paragraph (1), the excessive amount is equal to 
    the amount of the adjustment or (if smaller) the amount by which--
            (A) the income tax liability (as defined in section 6425(c)) 
        for the taxable year as shown on the return for the taxable 
        year, exceeds
            (B) the estimated income tax paid during the taxable year, 
        reduced by the amount of the adjustment.

(i) Fiscal years and short years

                          (1) Fiscal years

        In applying this section to a taxable year beginning on any date 
    other than January 1, there shall be substituted, for the months 
    specified in this section, the months which correspond thereto.

                       (2) Short taxable year

        This section shall be applied to taxable years of less than 12 
    months in accordance with regulations prescribed by the Secretary.

(j) Regulations

    The Secretary shall prescribe such regulations as may be necessary 
to carry out the purposes of this section.

(Aug. 16, 1954, ch. 736, 68A Stat. 825; Pub. L. 88-272, title I, 
Sec. 122(c), Feb. 26, 1964, 78 Stat. 28; Pub. L. 90-364, title I, 
Sec. 103(c), (d)(2), (e)(1), June 28, 1968, 82 Stat. 262, 264; Pub. L. 
93-625, Sec. 7(c), Jan. 3, 1975, 88 Stat. 2115; Pub. L. 94-455, title 
XIX, Sec. 1906(b)(3)(A)-(C)(i), (13)(A), Oct. 4, 1976, 90 Stat. 1833, 
1834; Pub. L. 95-600, title III, Sec. 301(b)(20)(B), Nov. 6, 1978, 92 
Stat. 2824; Pub. L. 96-499, title XI, Sec. 1111(a), (b), Dec. 5, 1980, 
94 Stat. 2681, 2682; Pub. L. 97-34, title VI, Sec. 601(a)(6)(B), title 
VII, Sec. 731(a), (b), Aug. 13, 1981, 95 Stat. 336, 346, 347; Pub. L. 
97-248, title II, Sec. 234(a), (c), (d), Sept. 3, 1982, 96 Stat. 503, 
504; Pub. L. 97-448, title II, Sec. 201(j)(4), Jan. 12, 1983, 96 Stat. 
2396; Pub. L. 99-499, title V, Sec. 516(b)(4)(D), Oct. 17, 1986, 100 
Stat. 1771; Pub. L. 99-514, title VII, Sec. 701(d)(3), title XV, 
Sec. 1511(c)(15), Oct. 22, 1986, 100 Stat. 2342, 2745; Pub. L. 100-203, 
title X, Sec. 10301(a), Dec. 22, 1987, 101 Stat. 1330-424; Pub. L. 100-
418, title I, Sec. 1941(b)(6)(B), Aug. 23, 1988, 102 Stat. 1324; Pub. L. 
100-647, title II, Sec. 2004(r), title V, Sec. 5001(a), Nov. 10, 1988, 
102 Stat. 3609, 3660; Pub. L. 101-239, title VII, Secs. 7209(a), 
7822(a), Dec. 19, 1989, 103 Stat. 2338, 2424; Pub. L. 101-508, title XI, 
Sec. 11704(a)(28), Nov. 5, 1990, 104 Stat. 1388-519; Pub. L. 102-227, 
title II, Sec. 201(a), (b), Dec. 11, 1991, 105 Stat. 1689; Pub. L. 102-
244, Sec. 3(a), Feb. 7, 1992, 106 Stat. 4; Pub. L. 102-318, title V, 
Sec. 512(a), (b), July 3, 1992, 106 Stat. 300; Pub. L. 103-66, title 
XIII, Sec. 13225(a), (b), Aug. 10, 1993, 107 Stat. 486; Pub. L. 103-465, 
title VII, Sec. 711(a), Dec. 8, 1994, 108 Stat. 4998; Pub. L. 104-188, 
title I, Sec. 1703(h), Aug. 20, 1996, 110 Stat. 1876; Pub. L. 105-34, 
title XIV, Sec. 1461(a), Aug. 5, 1997, 111 Stat. 1057; Pub. L. 106-170, 
title V, Sec. 571(a), Dec. 17, 1999, 113 Stat. 1950; Pub. L. 106-554, 
Sec. 1(a)(7) [title III, Sec. 319(21)], Dec. 21, 2000, 114 Stat. 2763, 
2763A-647.)


                               Amendments

    2000--Subsec. (e)(5)(A), (B). Pub. L. 106-554 substituted 
``subsection (d)(5)'' for ``subsections (d)(5) and (l)(3)(B)''.
    1999--Subsec. (e)(5). Pub. L. 106-170 added par. (5).
    1997--Subsec. (g)(3). Pub. L. 105-34 inserted at end ``In the case 
of a private foundation, subsection (c)(2) shall be applied by 
substituting `May 15' for `April 15'.''
    1996--Subsec. (g)(3). Pub. L. 104-188, Sec. 1703(h), in closing 
provisions, substituted ``, subsection (e)(2)(A) shall be applied by 
substituting `2 months' for `3 months' in clause (i)(I), the election 
under clause (i) of subsection (e)(2)(C) may be made separately for each 
installment, and clause (ii) of subsection (e)(2)(C) shall not apply.'' 
for ``, and, except in the case of an election under subsection 
(e)(2)(C), subsection (e)(2)(A) shall be applied by substituting `2 
months' for `3 months' and in clause (i)(I), by substituting `4 months' 
for `5 months' in clause (i)(II), by substituting `7 months' for `8 
months' in clause (i)(III), and by substituting `10 months' for `11 
months' in clause (i)(IV).''
    1994--Subsec. (e)(4). Pub. L. 103-465 added par. (4).
    1993--Subsec. (d)(1)(B)(i). Pub. L. 103-66, Sec. 13225(a)(1), 
substituted ``100 percent'' for ``91 percent'' in two places.
    Subsec. (d)(2). Pub. L. 103-66, Sec. 13225(a)(2)(A)(ii), substituted 
``100 percent'' for ``91 percent'' in heading.
    Subsec. (d)(3). Pub. L. 103-66, Sec. 13225(a)(2)(A)(i), struck out 
heading and text of par. (3). Text read as follows: ``In the case of any 
taxable year beginning after June 30, 1992, and before 1997--
        ``(A) paragraph (1)(B)(i) and subsection (e)(3)(A)(i) shall be 
    applied by substituting `97 percent' for `91 percent' each place it 
    appears, and
        ``(B) the table contained in subsection (e)(2)(B)(ii) shall be 
    applied by substituting `24.25', `48.50', `72.75', and `97' for 
    `22.75', `45.50', `68.25', and `91.00', respectively.''
    Subsec. (e)(2)(A)(i)(II). Pub. L. 103-66, Sec. 13225(b)(1)(A), 
struck out ``or for the first 5 months'' after ``3 months''.
    Subsec. (e)(2)(A)(i)(III). Pub. L. 103-66, Sec. 13225(b)(1)(B), 
struck out ``or for the first 8 months'' after ``6 months''.
    Subsec. (e)(2)(A)(i)(IV). Pub. L. 103-66, Sec. 13225(b)(1)(C), 
struck out ``or for the first 11 months'' after ``9 months''.
    Subsec. (e)(2)(B)(ii). Pub. L. 103-66, Sec. 13225(a)(2)(B), in 
table, substituted applicable percentages of 25, 50, 75, and 100 for 
22.75, 45.50, 68.25, and 91.00, respectively, in 1st, 2nd, 3rd, and 4th 
installments.
    Subsec. (e)(2)(C). Pub. L. 103-66, Sec. 13225(b)(2), added subpar. 
(C).
    Subsec. (e)(3)(A)(i). Pub. L. 103-66, Sec. 13225(a)(2)(C), 
substituted ``100 percent'' for ``91 percent''.
    Subsec. (g)(3). Pub. L. 103-66, Sec. 13225(b)(3), substituted ``and, 
except in the case of an election under subsection (e)(2)(C), subsection 
(e)(2)(A)'' for ``and subsection (e)(2)(A)'' in last sentence.
    1992--Subsec. (d)(1)(B)(i). Pub. L. 102-318, Sec. 512(a)(1), 
substituted ``91 percent'' for ``90 percent'' in two places.
    Subsec. (d)(2). Pub. L. 102-318, Sec. 512(a)(2), substituted ``91 
percent'' for ``90 percent'' in heading.
    Subsec. (d)(3). Pub. L. 102-318, Sec. 512(a)(3), added par. (3) and 
struck out former par. (3) which related to temporary increase in amount 
of installment method based on current tax year for taxable years 
beginning after 1991 and before 1997.
    Subsec. (d)(3)(A). Pub. L. 102-244, amended table generally, 
substituting a single entry ``1993 through 1996 . . . . . 95'' for 
former arrangement under which years after 1992 were covered by two 
table entries: ``1993 or 1994 . . . . . 94'' and ``1995 or 1996 . . . . 
. 95''.
    Subsec. (e)(2)(B)(ii). Pub. L. 102-318, Sec. 512(b)(1), in table, 
substituted applicable percentages of 22.75, 45.50, 68.25, and 91.00 for 
22.5, 45, 67.5, and 90, respectively, in 1st, 2nd, 3rd and 4th 
installments.
    Subsec. (e)(3)(A)(i). Pub. L. 102-318, Sec. 512(b)(2), substituted 
``91 percent'' for ``90 percent''.
    1991--Subsec. (d)(3). Pub. L. 102-227, Sec. 201(a), added par. (3).
    Subsec. (e)(1). Pub. L. 102-227, Sec. 201(b), substituted 
``paragraphs (2) and (3) of subsection (d)'' for ``subsection (d)(2)''.
    1990--Subsec. (g)(3). Pub. L. 101-508 inserted a period at end of 
last sentence.
    1989--Subsec. (e)(1). Pub. L. 101-239, Sec. 7822(a), substituted 
``under subsection (d)(1)'' for ``under section (d)(1)''.
    Subsec. (g)(4). Pub. L. 101-239, Sec. 7209(a), added par. (4).
    1988--Subsec. (e)(1). Pub. L. 100-647, Sec. 5001(a), struck out at 
end ``A reduction shall be treated as recaptured for purposes of 
subparagraph (B) if 90 percent of the reduction is recaptured.''
    Subsec. (g)(1)(B). Pub. L. 100-418 amended subpar. (B) generally. 
Prior to amendment, subpar. (B) read as follows: ``the sum of--
        ``(i) the credits against tax provided by part IV of subchapter 
    A of chapter 1, plus
        ``(ii) to the extent allowed under regulations prescribed by the 
    Secretary, any overpayment of the tax imposed by section 4986 
    (determined without regard to section 4995(a)(4)(B)).''
    Subsec. (g)(3). Pub. L. 100-647, Sec. 2004(r), inserted last 
sentence, and struck out former last sentence which read as follows: 
``In the case of any organization described in subparagraph (A), 
subsection (b)(2)(A) shall be applied by substituting `5th month' for 
`3rd month'.''
    1987--Pub. L. 100-203 amended section generally, revising and 
restating as subsecs. (a) to (j) provisions of former subsecs. (a) to 
(i).
    1986--Subsec. (a)(1). Pub. L. 99-514, Sec. 1511(c)(15), substituted 
``the underpayment rate established under section 6621'' for ``the rate 
established under section 6621''.
    Subsec. (f)(1). Pub. L. 99-514, Sec. 701(d)(3), amended par. (1) 
generally, restating existing provisions in subpar. (A) and adding 
subpar. (B).
    Pub. L. 99-499 amended subsec. (f)(1), as amended by the Tax Reform 
Act of 1986 (Pub. L. 99-514), by striking out ``plus'' at end of subpar. 
(A), substituting ``plus'' for ``over'' at end of subpar. (B), and 
adding subpar. (C).
    1983--Subsec. (f)(2)(B). Pub. L. 97-448 amended subpar. (B) 
generally. Prior to amendment, subpar. (B) read as follows: ``to the 
extent allowed under regulations prescribed by the Secretary, any amount 
which is treated under section 6429 as an overpayment of the tax imposed 
by section 4986''. Notwithstanding directory language that amendment be 
made to subsec. (e)(2)(B), the amendment was executed to subsec. 
(f)(2)(B) to reflect the probable intent of Congress, the intervening 
redesignation of subsec. (e) as (f) by Pub. L. 97-248, and the 
retrospective effect of the amendment as provided by section 203(a), (b) 
of Pub. L. 97-448, set out as an Effective Date of 1983 Amendment note 
under section 4988 of this title.
    1982--Subsec. (a). Pub. L. 97-248, Sec. 234(c), in heading 
substituted ``Addition to tax'' for ``Addition to the tax'', in 
provisions preceding par. (1) inserted reference to subsec. (e) as an 
exception and struck out ``estimated'' before ``tax'', designated 
existing provisions as par. (1), and in par. (1) as so designated struck 
out parenthetical reference to subsecs. (b) and (c) for determination of 
the amount of the underpayment and the period of the underpayment, 
respectively, and added par. (2).
    Subsec. (b)(1). Pub. L. 97-248, Sec. 234(a)(1), substituted ``90'' 
for ``80'' wherever appearing.
    Subsec. (d)(3)(A). Pub. L. 97-248, Sec. 234(a)(2), substituted 
``90'' for ``80''.
    Subsec. (e). Pub. L. 97-248, Sec. 234(d)(1), added subsec. (e). 
Former subsec. (e) redesignated (f).
    Subsec. (f). Pub. L. 97-248, Sec. 234(d), redesignated former 
subsec. (e) as (f) and substituted references to subsecs. (e) and (i) 
for references to subsec. (h). Former subsec. (f) redesignated (g).
    Subsecs. (g) to (i). Pub. L. 97-248, Sec. 234(d)(1), redesignated 
former subsecs. (f) to (h) as (g) to (i), respectively.
    1981--Subsec. (e)(2). Pub. L. 97-34, Sec. 601(a)(6)(B), inserted 
``the sum of--'', designated existing provisions as subpar. (A), 
inserted at end of subpar. (A) ``, plus'', and added subpar. (B).
    Subsec. (h). Pub. L. 97-34, Sec. 731(a), (b), substituted in heading 
``minimum percentage'' for ``at least 60 percent'' and provisions of 
par. (1) respecting minimum percentage, for provisions respecting in the 
case of a large corporation, the amount treated as the estimated tax for 
the taxable year under paragraphs (1) and (2) of subsection (d) shall in 
no event be less than 60 percent of the tax shown on the return for the 
taxable year, or if no return was filed, the tax for such year.
    1980--Subsec. (e). Pub. L. 96-499, Sec. 1111(b), substituted 
``subsections (b), (d), and (h)'' for ``subsections (b) and (d)''.
    Subsec. (h). Pub. L. 96-499, Sec. 1111(a), added subsec. (h).
    1978--Subsec. (e). Pub. L. 95-600 struck out provisions relating to 
the corporation's temporary estimated tax exemption.
    1976--Subsec. (e)(1)(B). Pub. L. 94-455, Sec. 1906(b)(3)(A), struck 
out in cl. (ii) ``after December 31, 1967, and'' after ``taxable year 
beginning'' and struck out cl. (iii) which related to the case of a 
taxable year beginning after Dec. 31, 1967, and before Jan. 1, 1972, the 
amount of the corporation's transitional exemption for such year.
    Subsec. (e)(2)(B). Pub. L. 94-455, Sec. 1906(b)(3)(B), substituted 
``clause (ii)'' for ``clauses (ii) and (iii)''.
    Subsec. (e)(3), (4). Pub. L. 94-455, Sec. 1906(b)(3)(C)(i), 
redesignated par. (4) as (3). Former par. (3), which related to the 
computation of a corporation's transitional exemption, was struck out.
    Subsec. (f). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ``or 
his delegate'' after ``Secretary''.
    1975--Subsecs. (a), (g)(1). Pub. L. 93-625 substituted ``an annual 
rate established under section 6621'' for ``the rate of 6 percent per 
annum''.
    1968--Subsec. (b)(1). Pub. L. 90-364, Sec. 103(c)(1), substituted 
``80 percent'' for ``70 percent''.
    Subsec. (d)(1). Pub. L. 90-364, Sec. 103(e)(1), struck out ``reduced 
by $100,000'' after ``The tax shown on the return of the corporation for 
the preceding taxable year''.
    Subsec. (d)(3)(A). Pub. L. 90-364, Sec. 103(c)(1), substituted ``80 
percent'' for ``70 percent''.
    Subsec. (e). Pub. L. 90-364, Sec. 103(c)(2), designated existing 
provisions as par. (1) under a heading ``In general'', in such 
redesignated par. (1) substituted ``For purposes of subsections (b) and 
(d)'' for ``For purposes of subsections (b), (d)(2), and (d)(3)'' in 
introductory text, redesignated as subpar. (A) former par. (1) and as 
subpar. (B) former par. (2), struck out reference to $100,000 as one 
factor in the sum required for redesignated subpar. (B) and added cls. 
(ii) and (iii), and added pars. (2), (3), and (4) under headings 
``Temporary estimated tax exemption'', ``Transitional exemption'', and 
``Special rule for subsection (d)(1) and (2)'' respectively.
    Subsec. (g). Pub. L. 90-364, Sec. 103(d)(2), added subsec. (g).
    1964--Subsec. (c)(2). Pub. L. 88-272, Sec. 122(c)(1), substituted 
``any installment date'' and ``such installment date'' for ``the 15th 
day of the 12th month''.
    Subsec. (d)(3). Pub. L. 88-272, Sec. 122(c)(2), redesignated cls. 
(A)(i) and (ii) as (A)(iii) and (iv), respectively, added cls. (A)(i) 
and (ii), and substituted ``(3, 5, 6, 8, 9,)'' for ``(6 or 8, or 9)'' in 
subpar. (B)(ii).


                    Effective Date of 1999 Amendment

    Pub. L. 106-170, title V, Sec. 571(b), Dec. 17, 1999, 113 Stat. 
1951, provided that: ``The amendment made by subsection (a) [amending 
this section] shall apply to estimated tax payments due on or after 
December 15, 1999.''


                    Effective Date of 1997 Amendment

    Section 1461(b) of Pub. L. 105-34 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply for purposes 
of determining underpayments of estimated tax for taxable years 
beginning after the date of the enactment of this Act [Aug. 5, 1997].''


                    Effective Date of 1996 Amendment

    Amendment by Pub. L. 104-188 effective as if included in the 
provision of the Revenue Reconciliation Act of 1993, Pub. L. 103-66, 
Secs. 13001-13444, to which such amendment relates, see section 1703(o) 
of Pub. L. 104-188, set out as a note under section 39 of this title.


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-465 applicable for purposes of determining 
underpayments of estimated tax for taxable years beginning after Dec. 
31, 1994, see section 711(c) of Pub. L. 103-465, set out as a note under 
section 6654 of this title.


                    Effective Date of 1993 Amendment

    Section 13225(c) of Pub. L. 103-66 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1993.''


                    Effective Date of 1992 Amendments

    Section 512(c) of Pub. L. 102-318 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years beginning after June 30, 1992.''
    Section 3(b) of Pub. L. 102-244 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to taxable years 
beginning after December 31, 1992.''


                    Effective Date of 1991 Amendment

    Section 201(c) of Pub. L. 102-227 provided that: ``The amendments 
made by subsection (a) [amending this section] shall apply to taxable 
years beginning after December 31, 1991.''


                    Effective Date of 1989 Amendment

    Section 7209(b) of Pub. L. 101-239 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to taxable 
years beginning after December 31, 1989.''
    Amendment by section 7822(a) of Pub. L. 101-239 effective as if 
included in the provision of the Revenue Act of 1987, Pub. L. 100-203, 
title X, to which such amendment relates, see section 7823 of Pub. L. 
101-239, set out as a note under section 26 of this title.


                    Effective Date of 1988 Amendments

    Amendment by section 2004(r) of Pub. L. 100-647 effective, except as 
otherwise provided, as if included in the provision of the Revenue Act 
of 1987, Pub. L. 100-203, title X, to which such amendment relates, see 
section 2004(u) of Pub. L. 100-647, set out as a note under section 56 
of this title.
    Section 5001(b) of Pub. L. 100-647 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to 
installments required to be made after December 31, 1988.''
    Amendment by Pub. L. 100-418 applicable to crude oil removed from 
the premises on or after Aug. 23, 1988, see section 1941(c) of Pub. L. 
100-418, set out as a note under section 164 of this title.


                    Effective Date of 1987 Amendment

    Amendment by Pub. L. 100-203 applicable to taxable years beginning 
after Dec. 31, 1987, see section 10301(c) of Pub. L. 100-203, set out as 
a note under section 585 of this title.


                    Effective Date of 1986 Amendments

    Amendment by section 701(d)(3) of Pub. L. 99-514 applicable to 
taxable years beginning after Dec. 31, 1986, with certain exceptions and 
qualifications, see section 701(f) of Pub. L. 99-514, set out as an 
Effective Date note under section 55 of this title.
    Amendment by section 1511(c)(15) of Pub. L. 99-514 applicable for 
purposes of determining interest for periods after Dec. 31, 1986, see 
section 1511(d) of Pub. L. 99-514, set out as a note under section 47 of 
this title.
    Amendment by Pub. L. 99-499 applicable to taxable years beginning 
after Dec. 31, 1986, see section 516(c) of Pub. L. 99-499, set out as a 
note under section 26 of this title.


                    Effective Date of 1983 Amendment

    Amendment by Pub. L. 97-448 effective, except as otherwise provided, 
as if it had been included in the provision of the Crude Oil Windfall 
Profit Tax Act of 1980, Pub. L. 96-223, to which such amendment relates, 
see section 203(a), (b) of Pub. L. 97-448, set out as a note under 
section 6652 of this title.


                    Effective Date of 1982 Amendment

    Section 234(e) of Pub. L. 97-248 provided that: ``The amendments 
made by this section [amending this section and sections 832, 6081, 
6152, and 6164 of this title] shall apply to taxable years beginning 
after December 31, 1982.''


                    Effective Date of 1981 Amendment

    Amendment by section 601(a)(6)(B) of Pub. L. 97-34 effective Jan. 1, 
1980, see section 601(c)(2) of Pub. L. 97-34, set out as a note under 
section 6654 of this title.
    Section 731(c) of Pub. L. 97-34 provided that: ``The amendments made 
by this section [amending this section] shall apply to taxable years 
beginning after December 31, 1981.''


                    Effective Date of 1980 Amendment

    Section 1111(c) of Pub. L. 96-499 provided that: ``The amendments 
made by this section [amending this section] shall apply to taxable 
years beginning after December 31, 1980.''


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-600 applicable to taxable years beginning 
after Dec. 31, 1978, see section 301(c) of Pub. L. 95-600, set out as a 
note under section 11 of this title.


                    Effective Date of 1976 Amendment

    Amendment by section 1906(b)(3)(A)-(C)(i) of Pub. L. 94-455 
effective with respect to taxable years after Dec. 31, 1976, see section 
1906(d)(2) of Pub. L. 94-455, set out as a note under section 6013 of 
this title.


                    Effective Date of 1975 Amendment

    Amendment by Pub. L. 93-625 effective July 1, 1975, and applicable 
to amounts outstanding on such date or arising thereafter, see section 
7(e) of Pub. L. 93-625, set out as an Effective Date note under section 
6621 of this title.


                    Effective Date of 1968 Amendment

    Amendment by Pub. L. 90-364 applicable with respect to taxable years 
beginning after Dec. 31, 1967, except as provided by section 104 of Pub. 
L. 90-364, see section 103(f) of Pub. L. 90-364, set out as a note under 
section 243 of this title.


                    Effective Date of 1964 Amendment

    Amendment by Pub. L. 88-272 effective, except for purposes of 
section 21 of this title, with respect to taxable years beginning after 
Dec. 31, 1963, see section 131 of Pub. L. 88-272, set out as a note 
under section 1 of this title.


        Waiver of Estimated Tax Penalties for 1998 Underpayments

    No addition to tax to be made under this section with respect to any 
underpayment of an installment required to be paid on or before the 30th 
day after July 22, 1998, to the extent such underpayment was created or 
increased by any provision of Pub. L. 105-206, see section 1(c) of Pub. 
L. 105-206, set out as a note under section 6654 of this title.
    No addition to tax to be made under this section for any period 
before Jan. 1, 1998, for any payment the due date of which is before 
Jan. 16, 1998, with respect to any underpayment attributable to such 
period to the extent such underpayment was created or increased by any 
provision of Pub. L. 105-34, see section 1(d) of Pub. L. 105-34, set out 
as a note under section 6654 of this title.


                 Underpayments of Estimated Tax for 1996

    No addition to tax to be made under this section with respect to any 
underpayment of an installment required to be paid before Aug. 20, 1996, 
to the extent such underpayment was created or increased by any 
provision of title I (Secs. 1101-1954) of Pub. L. 104-188, see section 
1102 of Pub. L. 104-188, set out as a note under section 6654 of this 
title.


  Waiver of Estimated Penalties for 1993 Underpayments Attributable to 
                   Revenue Reconciliation Act of 1993

    No addition to tax to be made under this section for any period 
before Apr. 16, 1994 (Mar. 16, 1994, in the case of a corporation), with 
respect to any underpayment to the extent such underpayment was created 
or increased by any provision of chapter 1 (Secs. 13001-13444) of title 
XIII of Pub. L. 103-66, see section 13001(d) of Pub. L. 103-66, set out 
as a note under section 6654 of this title.


  Waiver of Estimated Tax Penalties for Underpayments Attributable to 
                   Section 420(b)(4)(B) of This Title

    No addition to tax to be made under this section for taxable year 
preceding taxpayer's first taxable year beginning after Dec. 31, 1990, 
with respect to any underpayment to the extent such underpayment was 
created or increased by reason of section 420(b)(4)(B) of this title, 
see section 12011(c)(2) of Pub. L. 101-508, set out as an Effective Date 
note under section 420 of this title.


  Waiver of Estimated Penalties for 1990 Underpayments Attributable to 
                   Revenue Reconciliation Act of 1990

    Section 11307 of Pub. L. 101-508 provided that: ``No addition to tax 
shall be made under section 6655 of the Internal Revenue Code of 1986 
for any period before March 16, 1991, with respect to any underpayment 
to the extent such underpayment was created or increased by any 
provision of this part [part I (Secs. 11301-11307) of subtitle C of 
title XI of Pub. L. 101-508, see Tables for classification].''


  Applicability of Certain Amendments by Pub. L. 99-514 in Relation to 
                   Treaty Obligations of United States

    For applicability of amendment by section 701(d)(3) of Pub. L. 99-
514 notwithstanding any treaty obligation of the United States in effect 
on Oct. 22, 1986, see section 1012(aa)(2) of Pub. L. 100-647, set out as 
a note under section 861 of this title.


  Waiver of Estimated Penalties for 1988 Underpayments Attributable to 
             Technical and Miscellaneous Revenue Act of 1988

    No addition to tax to be made under this section for any period 
before Mar. 16, 1989, with respect to any underpayment to the extent 
such underpayment was created or increased by any provision of title I 
(Secs. 1001 to 1019) or II (Secs. 2001 to 2006) of Pub. L. 100-647, see 
section 1019(b) of Pub. L. 100-647, set out as an Effective Date of 1988 
Amendment note under section 1 of this title.


   Corporations Also May Use 1986 Tax To Determine Amount of Certain 
        Estimated Tax Installments Due On or Before June 15, 1987

    Section 10303(b)(2) of Pub. L. 100-203 provided that:
    ``(A) In general.--In the case of a large corporation, no addition 
to tax shall be imposed by section 6655 of the Internal Revenue Code of 
1986 with respect to any underpayment of an estimated tax installment to 
which this subsection applies if no addition would be imposed with 
respect to such underpayment by reason of section 6655(d)(1) of such 
Code if such corporation were not a large corporation. The preceding 
sentence shall apply only to the extent the underpayment is paid on or 
before the last date prescribed for payment of the most recent 
installment of estimated tax due on or before September 15, 1987.
    ``(B) Installment to which subsection applies.--This subsection 
applies to any installment of estimated tax for a taxable year beginning 
after December 31, 1986, which is due on or before June 15, 1987.
    ``(C) Large corporation.--For purposes of this subsection, the term 
`large corporation' has the meaning given such term by section 
6655(i)(2) of such Code (as in effect on the day before the date of the 
enactment of this Act [Dec. 22, 1987]).''


Waiver of Estimated Penalties for 1986 Underpayments Attributable to Tax 
                           Reform Act of 1986

    No addition to tax to be made under this section for any period 
before Mar. 16, 1987, with respect to any underpayment, to the extent 
such underpayment was created or increased by any provision of Pub. L. 
99-514, see section 1543 of Pub. L. 99-514, set out as a note under 
section 6654 of this title.


                    Waiver of Estimated Tax Penalties

    Section 1879(a) of Pub. L. 99-514 provided that: ``No addition to 
tax shall be made under section 6654 or 6655 of the Internal Revenue 
Code of 1954 [now 1986] (relating to failure to pay estimated income 
tax) for any period before April 16, 1985 (March 16, 1985 in the case of 
a taxpayer subject to section 6655 of such Code), with respect to any 
underpayment, to the extent that such underpayment was created or 
increased by any provision of the Tax Reform Act of 1984 [Pub. L. 98-
369, div. A].''


                 Underpayments of Estimated Tax for 1984

    Pub. L. 98-369, div. A, title II, subtitle A, Sec. 218, July 18, 
1984, 98 Stat. 766, which provided that no addition to the tax shall be 
made under section 6655 of this title with respect to any underpayment 
of an installment required to be paid before July 18, 1984, to the 
extent such underpayment was created or increased by any provision of 
this subtitle, and such underpayment was paid in full on or before the 
last date prescribed for payment of the first installment of estimated 
tax required to be paid after July 18, 1984, was repealed by Pub. L. 99-
514, title XVIII, Sec. 1824, Oct. 22, 1986, 100 Stat. 2846.


           Waiver of Penalty for Underpayment of Estimated Tax

    Section 803(g) of Pub. L. 94-455, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``If--
        ``(1) a corporation made underpayments of estimated tax for a 
    taxable year of the corporation which includes August 1, 1975, 
    because the corporation intended to elect to have the provisions of 
    subparagraph (B) of section 46(a)(1) of the Internal Revenue Code of 
    1986 [formerly I.R.C. 1954] (as it existed before the date of 
    enactment of this Act [Oct. 4, 1976]) apply for such taxable year, 
    and
        ``(2) the corporation does not elect to have the provisions of 
    such subparagraph apply for such taxable year because this Act does 
    not contain the amendments made by section 804(a)(2) (relating to 
    flowthrough of investment credit), or the provisions of subsection 
    (f) of such section (relating to grace period for certain plan 
    transfers), of the bill H.R. 10612 (94th Congress, 2d Session), as 
    amended by the Senate,
then the provisions of section 6655 of such Code (relating to failure by 
corporation to pay estimated income tax) shall not apply to so much of 
any such underpayment as the corporation can establish, to the 
satisfaction of the Secretary of the Treasury, is properly attributable 
to the inapplicability of such subparagraph (B) for such taxable year.''


                      Declaration of Estimated Tax

    With respect to taxable years beginning before Dec. 30, 1969, if a 
taxpayer is required to make a declaration, or to pay any amount of 
estimated tax by reason of amendments made by Pub. L. 91-172, such 
amount shall be paid ratably on each of the remaining installment dates 
for the taxable year beginning with the first installment date on or 
after Dec. 30, 1969; as to any declaration or payment of estimated tax 
before the first installment date, this section, and sections 6015, 
6154, and 6654 of this title shall be applied without regard to 
amendments made by Pub. L. 91-172, see section 946(b) of Pub. L. 91-172, 
set out as a note under section 6153 of this title.


         Tax Surcharge Extension; Declarations of Estimated Tax

    Requirement of making a declaration or amended declaration of 
estimated tax or of payment of any amount or additional amount of 
estimated tax by reason of amendment of sections 51(a)(1)(A), (B), 
(2)(A) and 963(b) of this title as calling for payment of such amount or 
additional amount ratably on or before each of remaining installment 
dates for taxable year beginning with installment date on or after the 
30th day after Aug. 7, 1969; application of this section without regard 
to such amendment with respect to any declaration or payment of 
estimated tax before such first installment date; and definition of 
``installment date'', see Pub. L. 93-53, Sec. 5(c), Aug. 7, 1969, 83 
Stat. 95.


           Estimated Tax of Life Insurance Companies for 1958

    Pub. L. 86-69, June 25, 1959, Sec. 3(h), 73 Stat. 140, provided that 
in the case of a taxpayer subject to tax under section 811 of this 
title, as in effect before June 25, 1959, no additional tax was to be 
payable under this section with respect to estimated tax for a taxable 
year beginning in 1958.

                  Section Referred to in Other Sections

    This section is referred to in sections 167, 338, 460, 585, 809, 
847, 1446, 6201, 6425, 6601, 6622, 6651, 6658, 6665, 6751, 7203, 7704 of 
this title.
