
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: 26USC6673]

 
                     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. 6673. Sanctions and costs awarded by courts


(a) Tax court proceedings

         (1) Procedures instituted primarily for delay, etc.

        Whenever it appears to the Tax Court that--
            (A) proceedings before it have been instituted or maintained 
        by the taxpayer primarily for delay,
            (B) the taxpayer's position in such proceeding is frivolous 
        or groundless, or
            (C) the taxpayer unreasonably failed to pursue available 
        administrative remedies,

    the Tax Court, in its decision, may require the taxpayer to pay to 
    the United States a penalty not in excess of $25,000.

             (2) Counsel's liability for excessive costs

        Whenever it appears to the Tax Court that any attorney or other 
    person admitted to practice before the Tax Court has multiplied the 
    proceedings in any case unreasonably and vexatiously, the Tax Court 
    may require--
            (A) that such attorney or other person pay personally the 
        excess costs, expenses, and attorneys' fees reasonably incurred 
        because of such conduct, or
            (B) if such attorney is appearing on behalf of the 
        Commissioner of Internal Revenue, that the United States pay 
        such excess costs, expenses, and attorneys' fees in the same 
        manner as such an award by a district court.

(b) Proceedings in other courts

                    (1) Claims under section 7433

        Whenever it appears to the court that the taxpayer's position in 
    the proceedings before the court instituted or maintained by such 
    taxpayer under section 7433 is frivolous or groundless, the court 
    may require the taxpayer to pay to the United States a penalty not 
    in excess of $10,000.

                (2) Collection of sanctions and costs

        In any civil proceeding before any court (other than the Tax 
    Court) which is brought by or against the United States in 
    connection with the determination, collection, or refund of any tax, 
    interest, or penalty under this title, any monetary sanctions, 
    penalties, or costs awarded by the court to the United States may be 
    assessed by the Secretary and, upon notice and demand, may be 
    collected in the same manner as a tax.

        (3) Sanctions and costs awarded by a court of appeals

        In connection with any appeal from a proceeding in the Tax Court 
    or a civil proceeding described in paragraph (2), an order of a 
    United States Court of Appeals or the Supreme Court awarding 
    monetary sanctions, penalties or court costs to the United States 
    may be registered in a district court upon filing a certified copy 
    of such order and shall be enforceable as other district court 
    judgments. Any such sanctions, penalties, or costs may be assessed 
    by the Secretary and, upon notice and demand, may be collected in 
    the same manner as a tax.

(Aug. 16, 1954, ch. 736, 68A Stat. 828; Pub. L. 94-455, title XIX, 
Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97-248, title 
II, Sec. 292(b), (d)(2)(A), Sept. 3, 1982, 96 Stat. 574; Pub. L. 99-514, 
title XV, Sec. 1552(a), Oct. 22, 1986, 100 Stat. 2753; Pub. L. 100-647, 
title VI, Sec. 6241(b), Nov. 10, 1988, 102 Stat. 3748; Pub. L. 101-239, 
title VII, Sec. 7731(a), Dec. 19, 1989, 103 Stat. 2400.)


                               Amendments

    1989--Pub. L. 101-239 substituted ``Sanctions and costs awarded by 
courts'' for ``Damages assessable for instituting proceedings before the 
Court primarily for delay, etc.'' in section catchline and amended text 
generally, making changes in substance and structure of subsecs. (a) and 
(b).
    1988--Pub. L. 100-647 struck out ``Tax'' after ``before the'' in 
section catchline, designated existing provisions as subsec. (a), and 
added subsec. (b).
    1986--Pub. L. 99-514 substituted ``, that the taxpayer's position in 
such proceeding is frivolous or groundless, or that the taxpayer 
unreasonably failed to pursue available administrative remedies'' for 
``or that the taxpayer's position in such proceedings is frivolous or 
groundless''.
    1982--Pub. L. 97-248, Sec. 292(d)(2)(A), substituted ``primarily for 
delay, etc.'' for ``merely for delay'' after ``Tax Court'' in section 
catchline.
    Subsec. (a). Pub. L. 97-248, Sec. 292(b), substituted ``or 
maintained by the taxpayer primarily for delay or that the taxpayer's 
position in such proceedings is frivolous or groundless, damages in an 
amount not in excess of $5,000'' for ``by the taxpayer merely for delay, 
damages in an amount not in excess of $500'' in first sentence.
    1976--Pub. L. 94-455 struck out ``or his delegate'' after 
``Secretary''.


                    Effective Date of 1989 Amendment

    Section 7731(d) of Pub. L. 101-239 provided that: ``The amendments 
made by this section [amending this section and section 7482 of this 
title] shall apply to positions taken after December 31, 1989, in 
proceedings which are pending on, or commenced after such date.''


                    Effective Date of 1988 Amendment

    Section 6241(d) of Pub. L. 100-647 provided that: ``The amendments 
made by this section [enacting section 7433 of this title and amending 
this section] shall apply to actions by officers or employees of the 
Internal Revenue Service after the date of the enactment of this Act 
[Nov. 10, 1988].''


                    Effective Date of 1986 Amendment

    Section 1552(b) of Pub. L. 99-514 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to 
proceedings commenced after the date of the enactment of this Act [Oct. 
22, 1986].''


                    Effective Date of 1982 Amendment

    Amendment by Pub. L. 97-248 applicable to any action or proceeding 
in the Tax Court commenced after Dec. 31, 1982, or pending in the Tax 
Court on the day 120 days after July 18, 1984, see section 292(e)(2) of 
Pub. L. 97-248, as amended, set out as an Effective Date note under 
section 7430 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 6215, 7459 of this title.
