
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC6672]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
  CHAPTER 68--ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE 
                                PENALTIES
 
                   Subchapter B--Assessable Penalties
 
                       PART I--GENERAL PROVISIONS
 
Sec. 6672. Failure to collect and pay over tax, or attempt to 
        evade or defeat tax
        

(a) General rule

    Any person required to collect, truthfully account for, and pay over 
any tax imposed by this title who willfully fails to collect such tax, 
or truthfully account for and pay over such tax, or willfully attempts 
in any manner to evade or defeat any such tax or the payment thereof, 
shall, in addition to other penalties provided by law, be liable to a 
penalty equal to the total amount of the tax evaded, or not collected, 
or not accounted for and paid over. No penalty shall be imposed under 
section 6653 or part II of subchapter A of chapter 68 for any offense to 
which this section is applicable.

(b) Preliminary notice requirement

                           (1) In general

        No penalty shall be imposed under subsection (a) unless the 
    Secretary notifies the taxpayer in writing by mail to an address as 
    determined under section 6212(b) or in person that the taxpayer 
    shall be subject to an assessment of such penalty.

                        (2) Timing of notice

        The mailing of the notice described in paragraph (1) (or, in the 
    case of such a notice delivered in person, such delivery) shall 
    precede any notice and demand of any penalty under subsection (a) by 
    at least 60 days.

                     (3) Statute of limitations

        If a notice described in paragraph (1) with respect to any 
    penalty is mailed or delivered in person before the expiration of 
    the period provided by section 6501 for the assessment of such 
    penalty (determined without regard to this paragraph), the period 
    provided by such section for the assessment of such penalty shall 
    not expire before the later of--
            (A) the date 90 days after the date on which such notice was 
        mailed or delivered in person, or
            (B) if there is a timely protest of the proposed assessment, 
        the date 30 days after the Secretary makes a final 
        administrative determination with respect to such protest.

                     (4) Exception for jeopardy

        This subsection shall not apply if the Secretary finds that the 
    collection of the penalty is in jeopardy.

(c) Extension of period of collection where bond is filed

                           (1) In general

        If, within 30 days after the day on which notice and demand of 
    any penalty under subsection (a) is made against any person, such 
    person--
            (A) pays an amount which is not less than the minimum amount 
        required to commence a proceeding in court with respect to his 
        liability for such penalty,
            (B) files a claim for refund of the amount so paid, and
            (C) furnishes a bond which meets the requirements of 
        paragraph (3),

    no levy or proceeding in court for the collection of the remainder 
    of such penalty shall be made, begun, or prosecuted until a final 
    resolution of a proceeding begun as provided in paragraph (2). 
    Notwithstanding the provisions of section 7421(a), the beginning of 
    such proceeding or levy during the time such prohibition is in force 
    may be enjoined by a proceeding in the proper court. Nothing in this 
    paragraph shall be construed to prohibit any counterclaim for the 
    remainder of such penalty in a proceeding begun as provided in 
    paragraph (2).

     (2) Suit must be brought to determine liability for penalty

        If, within 30 days after the day on which his claim for refund 
    with respect to any penalty under subsection (a) is denied, the 
    person described in paragraph (1) fails to begin a proceeding in the 
    appropriate United States district court (or in the Court of Claims) 
    \1\ for the determination of his liability for such penalty, 
    paragraph (1) shall cease to apply with respect to such penalty, 
    effective on the day following the close of the 30-day period 
    referred to in this paragraph.
---------------------------------------------------------------------------
    \1\ See References in Text note below.
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                              (3) Bond

        The bond referred to in paragraph (1) shall be in such form and 
    with such sureties as the Secretary may by regulations prescribe and 
    shall be in an amount equal to 1\1/2\ times the amount of excess of 
    the penalty assessed over the payment described in paragraph (1).

       (4) Suspension of running of period of limitations on 
                                 collection

        The running of the period of limitations provided in section 
    6502 on the collection by levy or by a proceeding in court in 
    respect of any penalty described in paragraph (1) shall be suspended 
    for the period during which the Secretary is prohibited from 
    collecting by levy or a proceeding in court.

                       (5) Jeopardy collection

        If the Secretary makes a finding that the collection of the 
    penalty is in jeopardy, nothing in this subsection shall prevent the 
    immediate collection of such penalty.

(d) Right of contribution where more than 1 person liable for penalty

    If more than 1 person is liable for the penalty under subsection (a) 
with respect to any tax, each person who paid such penalty shall be 
entitled to recover from other persons who are liable for such penalty 
an amount equal to the excess of the amount paid by such person over 
such person's proportionate share of the penalty. Any claim for such a 
recovery may be made only in a proceeding which is separate from, and is 
not joined or consolidated with--
        (1) an action for collection of such penalty brought by the 
    United States, or
        (2) a proceeding in which the United States files a counterclaim 
    or third-party complaint for the collection of such penalty.

(e) Exception for voluntary board members of tax-exempt organizations

    No penalty shall be imposed by subsection (a) on any unpaid, 
volunteer member of any board of trustees or directors of an 
organization exempt from tax under subtitle A if such member--
        (1) is solely serving in an honorary capacity,
        (2) does not participate in the day-to-day or financial 
    operations of the organization, and
        (3) does not have actual knowledge of the failure on which such 
    penalty is imposed.

The preceding sentence shall not apply if it results in no person being 
liable for the penalty imposed by subsection (a).

(Aug. 16, 1954, ch. 736, 68A Stat. 828; Pub. L. 95-628, Sec. 9(a), Nov. 
10, 1978, 92 Stat. 3633; Pub. L. 101-239, title VII, Secs. 7721(c)(9), 
7737(a), Dec. 19, 1989, 103 Stat. 2400, 2404; Pub. L. 104-168, title IX, 
Secs. 901(a), 903(a), 904(a), July 30, 1996, 110 Stat. 1465-1467; Pub. 
L. 105-206, title III, Sec. 3307(a), (b), July 22, 1998, 112 Stat. 744.)

                       References in Text

    The Court of Claims, referred to in subsec. (c)(2), and the United 
States Court of Customs and Patent Appeals were merged effective Oct. 1, 
1982, into a new United States Court of Appeals for the Federal Circuit 
by Pub. L. 97-164, Apr. 2, 1982, 96 Stat. 25, which also created a 
United States Claims Court [now United States Court of Federal Claims] 
that inherited the trial jurisdiction of the Court of Claims. See 
sections 48, 171 et seq., 791 et seq., and 1491 et seq. of Title 28, 
Judiciary and Judicial Procedure.


                               Amendments

    1998--Subsec. (b)(1). Pub. L. 105-206, Sec. 3307(a), inserted ``or 
in person'' after ``section 6212(b)''.
    Subsec. (b)(2). Pub. L. 105-206, Sec. 3307(b)(1), inserted ``(or, in 
the case of such a notice delivered in person, such delivery)'' after 
``paragraph (1)''.
    Subsec. (b)(3). Pub. L. 105-206, Sec. 3307(b)(2), inserted ``or 
delivered in person'' after ``mailed'' in introductory provisions and in 
subpar. (A).
    1996--Subsecs. (b), (c). Pub. L. 104-168, Sec. 901(a), added subsec. 
(b) and redesignated former subsec. (b) as (c).
    Subsec. (d). Pub. L. 104-168, Sec. 903(a), added subsec. (d).
    Subsec. (e). Pub. L. 104-168, Sec. 904(a), added subsec. (e).
    1989--Subsec. (a). Pub. L. 101-239, Sec. 7721(c)(9), inserted ``or 
part II of subchapter A of chapter 68'' after ``under section 6653''.
    Subsec. (b)(1). Pub. L. 101-239, Sec. 7737(a), inserted at end 
``Nothing in this paragraph shall be construed to prohibit any 
counterclaim for the remainder of such penalty in a proceeding begun as 
provided in paragraph (2).''
    1978--Pub. L. 95-628 designated existing provisions as subsec. (a), 
added subsec. (a) heading, and added subsec. (b).


                    Effective Date of 1998 Amendment

    Pub. L. 105-206, title III, Sec. 3307(c), July 22, 1998, 112 Stat. 
744, provided that: ``The amendments made by this section [amending this 
section] shall take effect on the date of the enactment of this Act 
[July 22, 1998].''


                    Effective Date of 1996 Amendment

    Section 901(b) of Pub. L. 104-168 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to proposed 
assessments made after June 30, 1996.''
    Section 903(b) of Pub. L. 104-168 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to penalties 
assessed after the date of the enactment of this Act [July 30, 1996].''


                    Effective Date of 1989 Amendment

    Amendment by section 7721(c)(9) of Pub. L. 101-239 applicable to 
returns the due date for which (determined without regard to extensions) 
is after Dec. 31, 1989, see section 7721(d) of Pub. L. 101-239, set out 
as a note under section 461 of this title.
    Section 7737(b) of Pub. L. 101-239 provided that: ``The amendment 
made by subsection (a) [amending this section and sections 6694 and 6703 
of this title] shall take effect on the date of the enactment of this 
Act [Dec. 19, 1989].''


                    Effective Date of 1978 Amendment

    Section 9(c) of Pub. L. 95-628 provided that: ``The amendments made 
by this section [amending this section and sections 7103 and 7421 of 
this title] shall apply with respect to penalties assessed more than 60 
days after the date of the enactment of this Act [Nov. 10, 1978].''


Public Information To Ensure Employee Awareness of Responsibilities and 
                 Liabilities Under Tax Depository System

    Section 904(b) of Pub. L. 104-168 provided that:
    ``(1) In general.--The Secretary of the Treasury or the Secretary's 
delegate (hereafter in this subsection referred to as the `Secretary') 
shall take such actions as may be appropriate to ensure that employees 
are aware of their responsibilities under the Federal tax depository 
system, the circumstances under which employees may be liable for the 
penalty imposed by section 6672 of the Internal Revenue Code of 1986, 
and the responsibility to promptly report to the Internal Revenue 
Service any failure referred to in subsection (a) of such section 6672. 
Such actions shall include--
        ``(A) printing of a warning on deposit coupon booklets and the 
    appropriate tax returns that certain employees may be liable for the 
    penalty imposed by such section 6672, and
        ``(B) the development of a special information packet.
    ``(2) Development of explanatory materials.--The Secretary shall 
develop materials explaining the circumstances under which board members 
of tax-exempt organizations (including voluntary and honorary members) 
may be subject to penalty under section 6672 of such Code. Such 
materials shall be made available to tax-exempt organizations.
    ``(3) IRS instructions.--The Secretary shall clarify the 
instructions to Internal Revenue Service employees on the application of 
the penalty under section 6672 of such Code with regard to voluntary 
members of boards of trustees or directors of tax-exempt 
organizations.''

                  Section Referred to in Other Sections

    This section is referred to in sections 6050C, 6103, 6331, 7103, 
7421, 7501 of this title; title 20 section 1099c.
