
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: 26USC6697]

 
                     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. 6697. Assessable penalties with respect to liability for 
        tax of regulated investment companies
        

(a) Civil penalty

    In addition to any other penalty provided by law, any regulated 
investment company whose tax liability for any taxable year is deemed to 
be increased pursuant to section 860(c)(1)(A) shall pay a penalty in an 
amount equal to the amount of the interest (for which such company is 
liable) which is attributable solely to such increase.

(b) 50-percent limitation

    The penalty payable under this section with respect to any 
determination shall not exceed one-half of the amount of the deduction 
allowed by section 860(a) for such taxable year.

(c) Deficiency procedures not to apply

    Subchapter B of chapter 63 (relating to deficiency procedure for 
income, estate, gift, and certain excise taxes) shall not apply in 
respect of the assessment or collection of any penalty imposed by 
subsection (a).

(Added Pub. L. 94-455, title XVI, Sec. 1601(b)(1), Oct. 4, 1976, 90 
Stat. 1745; amended Pub. L. 95-600, title III, Sec. 362(b), Nov. 6, 
1978, 92 Stat. 2851; Pub. L. 99-514, title VI, Sec. 667(a), Oct. 22, 
1986, 100 Stat. 2305.)


                               Amendments

    1986--Pub. L. 99-514 substituted ``regulated investment companies'' 
for ``real estate investment entities'' in section catchline.
    Subsec. (a). Pub. L. 99-514 amended subsec. (a) generally. Prior to 
amendment, subsec. (a) read as follows: ``In addition to any other 
penalty provided by law, any qualified investment entity (as defined in 
section 860(b)) whose tax liability for any taxable year is deemed to be 
increased pursuant to section 860(c)(1)(A) (relating to interest and 
additions to tax determined with respect to the amount of the deduction 
for deficiency dividends allowed) shall pay a penalty in an amount equal 
to the amount of interest (for which such entity is liable) which is 
attributable solely to such increase.''
    1978--Pub. L. 95-600 substituted ``qualified investment entities'' 
for ``real estate investment trusts'' in section catchline.
    Subsec. (a). Pub. L. 95-600 substituted ``qualified investment 
entity (as defined in section 860(b))'' for ``real estate investment 
trust'', ``section 860(c)(1)(A)'' for ``section 859(b)(2)(A)'', and 
``(for which such entity is liable) which'' for ``for which such trust 
is liable that''.
    Subsec. (b). Pub. L. 95-600 substituted ``section 860(a)'' for 
``section 859(a)''.
    Subsec. (c). Pub. L. 95-600 reenacted subsec. (c) without change.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-514 applicable to taxable years beginning 
after Dec. 31, 1986, see section 669 of Pub. L. 99-514, set out as a 
note under section 856 of this title.


                    Effective Date of 1978 Amendment

    Amendment by Pub. L. 95-600 applicable with respect to 
determinations (as defined in section 860(e) of this title) after Nov. 
6, 1978, see section 362(e) of Pub. L. 95-600, set out as an Effective 
Date note under section 860 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 860 of this title.
