
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: 26USC6707]

 
                     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. 6707. Failure to furnish information regarding tax shelters


(a) Failure to register tax shelter

                      (1) Imposition of penalty

        If a person who is required to register a tax shelter under 
    section 6111(a)--
            (A) fails to register such tax shelter on or before the date 
        described in section 6111(a)(1), or
            (B) files false or incomplete information with the Secretary 
        with respect to such registration,

    such person shall pay a penalty with respect to such registration in 
    the amount determined under paragraph (2) or (3), as the case may 
    be. No penalty shall be imposed under the preceding sentence with 
    respect to any failure which is due to reasonable cause.

                        (2) Amount of penalty

        Except as provided in paragraph (3), the penalty imposed under 
    paragraph (1) with respect to any tax shelter shall be an amount 
    equal to the greater of--
            (A) 1 percent of the aggregate amount invested in such tax 
        shelter, or
            (B) $500.

                    (3) Confidential arrangements

        (A) In general

            In the case of a tax shelter (as defined in section 
        6111(d)), the penalty imposed under paragraph (1) shall be an 
        amount equal to the greater of--
                (i) 50 percent of the fees paid to all promoters of the 
            tax shelter with respect to offerings made before the date 
            such shelter is registered under section 6111, or
                (ii) $10,000.

        Clause (i) shall be applied by substituting ``75 percent'' for 
        ``50 percent'' in the case of an intentional failure or act 
        described in paragraph (1).

        (B) Special rule for participants required to register shelter

            In the case of a person required to register such a tax 
        shelter by reason of section 6111(d)(3)--
                (i) such person shall be required to pay the penalty 
            under paragraph (1) only if such person actually 
            participated in such shelter,
                (ii) the amount of such penalty shall be determined by 
            taking into account under subparagraph (A)(i) only the fees 
            paid by such person, and
                (iii) such penalty shall be in addition to the penalty 
            imposed on any other person for failing to register such 
            shelter.

(b) Failure to furnish tax shelter identification number

                          (1) Sellers, etc.

        Any person who fails to furnish the identification number of a 
    tax shelter which such person is required to furnish under section 
    6111(b)(1) shall pay a penalty of $100 for each such failure.

               (2) Failure to include number on return

        Any person who fails to include an identification number on a 
    return on which such number is required to be included under section 
    6111(b)(2) shall pay a penalty of $250 for each such failure, unless 
    such failure is due to reasonable cause.

(Added Pub. L. 98-369, div. A, title I, Sec. 141(b), July 18, 1984, 98 
Stat. 680; amended Pub. L. 99-514, title XV, Secs. 1532(a), 1533(a), 
Oct. 22, 1986, 100 Stat. 2750; Pub. L. 105-34, title X, Sec. 1028(b), 
(d), Aug. 5, 1997, 111 Stat. 927, 928.)


                               Amendments

    1997--Subsec. (a)(1). Pub. L. 105-34, Sec. 1028(d)(2), which 
directed the substitution of ``paragraph (2) or (3), as the case may 
be'' for ``paragraph (2)'' in subpar. (A) of par. (1), was executed by 
making the substitution in the concluding provisions of par. (1) to 
reflect the probable intent of Congress.
    Subsec. (a)(2). Pub. L. 105-34, Sec. 1028(d)(1), substituted 
``Except as provided in paragraph (3), the penalty'' for ``The 
penalty''.
    Subsec. (a)(3). Pub. L. 105-34, Sec. 1028(b), added par. (3).
    1986--Subsec. (a)(2). Pub. L. 99-514, Sec. 1532(a), amended par. (2) 
generally. Prior to amendment, par. (2) read as follows: ``The penalty 
imposed under paragraph (1) with respect to any tax shelter shall be an 
amount equal to the greater of--
        ``(A) $500, or
        ``(B) the lesser of (i) 1 percent of the aggregate amount 
    invested in such tax shelter, or (ii) $10,000.
The $10,000 limitation in subparagraph (B) shall not apply where there 
is an intentional disregard of the requirements of section 6111(a).''
    Subsec. (b)(2). Pub. L. 99-514, Sec. 1533(a), substituted ``$250'' 
for ``$50''.


                    Effective Date of 1997 Amendment

    Amendment by Pub. L. 105-34 applicable to any tax shelter, as 
defined in section 6111(d) of this title, interests in which are offered 
to potential participants after Secretary of the Treasury prescribes 
guidance with respect to meeting requirements added by amendments made 
by Pub. L. 105-34, Sec. 1028, see section 1028(e) of Pub. L. 105-34, set 
out as a note under section 6111 of this title.


                    Effective Date of 1986 Amendment

    Section 1532(b) of Pub. L. 99-514 provided that: ``The amendment 
made by this section [amending this section] shall apply to failures 
with respect to tax shelters interests in which are first offered for 
sale after the date of the enactment of this Act [Oct. 22, 1986].''
    Section 1533(b) of Pub. L. 99-514 provided that: ``The amendment 
made by this section [amending this section] shall apply to returns 
filed after the date of the enactment of this Act [Oct 22, 1986].''


                             Effective Date

    Section applicable to tax shelters (within the meaning of section 
6111 of this title), any interest in which is first sold to any investor 
after Aug. 31, 1984, see section 141(d) of Pub. L. 98-369, set out as a 
note under section 6111 of this title.
