26 U.S.C. § 6707
Section 6707 · Failure to furnish information regarding reportable transactions
Amended 4 times on record
Applied in 20 court decisions — leading case United States v. BDO Seidman, LLP (2007)
Most recently applied in BCP Trading and Investments, LLC v. Cmsnr. IRS (March 2021)
How often courts cite this section
Court decisions citing this, by year.Markers show enactment, consequential amendments, and circuit splits over this section — watch for a citation surge after a change or a disagreement. The dip in the last several years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the most recent years, so recent citations are undercounted.
If a person who is required to file a return under section 6111(a) with respect to any reportable transaction—
(1) fails to file such return on or before the date prescribed therefor, or
(2) files false or incomplete information with the Secretary with respect to such transaction,
such person shall pay a penalty with respect to such return in the amount determined under subsection (b).
(1) In general
Except as provided in paragraph (2), the penalty imposed under subsection (a) with respect to any failure shall be $50,000.
(2) Listed transactions
The penalty imposed under subsection (a) with respect to any listed transaction shall be an amount equal to the greater of—
(A) $200,000, or
(B) 50 percent of the gross income derived by such person with respect to aid, assistance, or advice which is provided with respect to the listed transaction before the date the return is filed under section 6111.
Subparagraph (B) shall be applied by substituting “75 percent” for “50 percent” in the case of an intentional failure or act described in subsection (a).
The provisions of section 6707A(d) (relating to authority of Commissioner to rescind penalty) shall apply to any penalty imposed under this section.
For purposes of this section, the terms “reportable transaction” and “listed transaction” have the respective meanings given to such terms by section 6707A(c).
Editorial notes U.S. Code · Office of the Law Revision Counsel
Amendments
2004—Pub. L. 108–357 amended section catchline and text generally, substituting provisions relating to penalty for failure to furnish information regarding reportable transactions for provisions relating to penalty for failure to furnish information regarding tax shelters.
1997—Subsec. (a)(1). Pub. L. 105–34, §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, §1028(d)(1), substituted “Except as provided in paragraph (3), the penalty” for “The penalty”.
Subsec. (a)(3). Pub. L. 105–34, §1028(b), added par. (3).
1986—Subsec. (a)(2). Pub. L. 99–514, §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, §1533(a), substituted “$250” for “$50”.
Effective Date of 2004 Amendment
Pub. L. 108–357, title VIII, §816(c), Oct. 22, 2004, 118 Stat. 1584, provided that: “The amendments made by this section [amending this section] shall apply to returns the due date for which is after the date of the enactment of this Act [Oct. 22, 2004].”
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, §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.