§6699 — Failure to file S corporation return
6 cases·1 followed·1 overruled·4 cited—17% support
Statute Text — 26 U.S.C. §6699
In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any S corporation required to file a return under section 6037 for any taxable year—
fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or
files a return which fails to show the information required under section 6037,
such S corporation shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause.
For purposes of subsection (a), the amount determined under this subsection for any month is the product of—
$195, multiplied by
the number of persons who were shareholders in the S corporation during any part of the taxable year.
The penalty imposed by subsection (a) shall be assessed against the S corporation.
Subchapter B of chapter 63 (relating to deficiency procedures 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).
In the case of any return required to be filed in a calendar year beginning after 2014, the $195 dollar amount under subsection (b)(1) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.
6 Citing Cases
485, 493 (2017), supplementing and overruling in part 147 T.C.
Section 6699 provides that an S corporation that does not timely file its annual tax return is liable for a penalty equal to $89 per shareholder for every month the tax return is late (but ot to exceed 12 months).
§ 6699 (imposing penalty for failure to file S corporation return). Section 6501 does not need to, as that is not its function. The principal question section 6501 asks is “By when must the Commissioner assess the taxes the Code imposes?” Its principal question is not “What are the consequences of filing a return?” A simple observation illustrates
- 19 - penalty ofsection 6699,¹° to the assessable penalty ofsection 6701 for aiding and abetting understatement oftax liability," and to the assessable penalty of section 6702(a)(1) for filing a frivolous return.¹² Today we reach the question whether the supervisory approval requirement ofsection 6751(b)(1) applies to the assessable penalty ofsection 6707A, and th
107, 113 (2007); see also sec.
Pursuantto section 6330(d)(1), petitioner seeks review ofthe determination by the IRS Office ofAppeals that it is liable for a penalty under section 6699 for failing to timely file a return under section 6037 for 2010.