Internal Revenue Code:Sec. 6672. Failure to collect and pay over tax, or attempt to evade or defeat tax
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Location in Internal Revenue Code
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
Statute
Sec. 6672. Failure to collect and pay over tax, or attempt to evade
or defeat tax
(a) General rule
Any person required to collect, truthfully account for, and pay
over any tax imposed by this title who willfully fails to collect
such tax, or truthfully account for and pay over such tax, or
willfully attempts in any manner to evade or defeat any such tax or
the payment thereof, shall, in addition to other penalties provided
by law, be liable to a penalty equal to the total amount of the tax
evaded, or not collected, or not accounted for and paid over. No
penalty shall be imposed under section 6653 or part II of
subchapter A of chapter 68 for any offense to which this section is
applicable.
(b) Preliminary notice requirement
(1) In general
No penalty shall be imposed under subsection (a) unless the
Secretary notifies the taxpayer in writing by mail to an address
as determined under section 6212(b) or in person that the
taxpayer shall be subject to an assessment of such penalty.
(2) Timing of notice
The mailing of the notice described in paragraph (1) (or, in
the case of such a notice delivered in person, such delivery)
shall precede any notice and demand of any penalty under
subsection (a) by at least 60 days.
(3) Statute of limitations
If a notice described in paragraph (1) with respect to any
penalty is mailed or delivered in person before the expiration of
the period provided by section 6501 for the assessment of such
penalty (determined without regard to this paragraph), the period
provided by such section for the assessment of such penalty shall
not expire before the later of -
(A) the date 90 days after the date on which such notice was
mailed or delivered in person, or
(B) if there is a timely protest of the proposed assessment,
the date 30 days after the Secretary makes a final
administrative determination with respect to such protest.
(4) Exception for jeopardy
This subsection shall not apply if the Secretary finds that the
collection of the penalty is in jeopardy.
(c) Extension of period of collection where bond is filed
(1) In general
If, within 30 days after the day on which notice and demand of
any penalty under subsection (a) is made against any person, such
person -
(A) pays an amount which is not less than the minimum amount
required to commence a proceeding in court with respect to his
liability for such penalty,
(B) files a claim for refund of the amount so paid, and
(C) furnishes a bond which meets the requirements of
paragraph (3),
no levy or proceeding in court for the collection of the
remainder of such penalty shall be made, begun, or prosecuted
until a final resolution of a proceeding begun as provided in
paragraph (2). Notwithstanding the provisions of section 7421(a),
the beginning of such proceeding or levy during the time such
prohibition is in force may be enjoined by a proceeding in the
proper court. Nothing in this paragraph shall be construed to
prohibit any counterclaim for the remainder of such penalty in a
proceeding begun as provided in paragraph (2).
(2) Suit must be brought to determine liability for penalty
If, within 30 days after the day on which his claim for refund
with respect to any penalty under subsection (a) is denied, the
person described in paragraph (1) fails to begin a proceeding in
the appropriate United States district court (or in the Court of
Claims) (FOOTNOTE 1) for the determination of his liability for
such penalty, paragraph (1) shall cease to apply with respect to
such penalty, effective on the day following the close of the
30-day period referred to in this paragraph.
(FOOTNOTE 1) See References in Text note below.
(3) Bond
The bond referred to in paragraph (1) shall be in such form and
with such sureties as the Secretary may by regulations prescribe
and shall be in an amount equal to 1 1/2 times the amount of
excess of the penalty assessed over the payment described in
paragraph (1).
(4) Suspension of running of period of limitations on collection
The running of the period of limitations provided in section
6502 on the collection by levy or by a proceeding in court in
respect of any penalty described in paragraph (1) shall be
suspended for the period during which the Secretary is prohibited
from collecting by levy or a proceeding in court.
(5) Jeopardy collection
If the Secretary makes a finding that the collection of the
penalty is in jeopardy, nothing in this subsection shall prevent
the immediate collection of such penalty.
(d) Right of contribution where more than 1 person liable for
penalty
If more than 1 person is liable for the penalty under subsection
(a) with respect to any tax, each person who paid such penalty
shall be entitled to recover from other persons who are liable for
such penalty an amount equal to the excess of the amount paid by
such person over such person's proportionate share of the penalty.
Any claim for such a recovery may be made only in a proceeding
which is separate from, and is not joined or consolidated with -
(1) an action for collection of such penalty brought by the
United States, or
(2) a proceeding in which the United States files a
counterclaim or third-party complaint for the collection of such
penalty.
(e) Exception for voluntary board members of tax-exempt
organizations
No penalty shall be imposed by subsection (a) on any unpaid,
volunteer member of any board of trustees or directors of an
organization exempt from tax under subtitle A if such member -
(1) is solely serving in an honorary capacity,
(2) does not participate in the day-to-day or financial
operations of the organization, and
(3) does not have actual knowledge of the failure on which such
penalty is imposed.
The preceding sentence shall not apply if it results in no person
being liable for the penalty imposed by subsection (a).
Sources
(Aug. 16, 1954, ch. 736, 68A Stat. 828; Pub. L. 95-628, Sec. 9(a),
Nov. 10, 1978, 92 Stat. 3633; Pub. L. 101-239, title VII, Sec.
7721(c)(9), 7737(a), Dec. 19, 1989, 103 Stat. 2400, 2404; Pub. L.
104-168, title IX, Sec. 901(a), 903(a), 904(a), July 30, 1996, 110
Stat. 1465-1467; Pub. L. 105-206, title III, Sec. 3307(a), (b),
July 22, 1998, 112 Stat. 744.)
References in Text
REFERENCES IN TEXT
The Court of Claims, referred to in subsec. (c)(2), and the
United States Court of Customs and Patent Appeals were merged
effective Oct. 1, 1982, into a new United States Court of Appeals
for the Federal Circuit by Pub. L. 97-164, Apr. 2, 1982, 96 Stat.
25, which also created a United States Claims Court (now United
States Court of Federal Claims) that inherited the trial
jurisdiction of the Court of Claims. See sections 48, 171 et seq.,
791 et seq., and 1491 et seq. of Title 28, Judiciary and Judicial
Procedure.
Miscellaneous
AMENDMENTS
1998 - Subsec. (b)(1). Pub. L. 105-206, Sec. 3307(a), inserted
''or in person'' after ''section 6212(b)''.
Subsec. (b)(2). Pub. L. 105-206, Sec. 3307(b)(1), inserted ''(or,
in the case of such a notice delivered in person, such delivery)''
after ''paragraph (1)''.
Subsec. (b)(3). Pub. L. 105-206, Sec. 3307(b)(2), inserted ''or
delivered in person'' after ''mailed'' in introductory provisions
and in subpar. (A).
1996 - Subsecs. (b), (c). Pub. L. 104-168, Sec. 901(a), added
subsec. (b) and redesignated former subsec. (b) as (c).
Subsec. (d). Pub. L. 104-168, Sec. 903(a), added subsec. (d).
Subsec. (e). Pub. L. 104-168, Sec. 904(a), added subsec. (e).
1989 - Subsec. (a). Pub. L. 101-239, Sec. 7721(c)(9), inserted
''or part II of subchapter A of chapter 68'' after ''under section
6653''.
Subsec. (b)(1). Pub. L. 101-239, Sec. 7737(a), inserted at end
''Nothing in this paragraph shall be construed to prohibit any
counterclaim for the remainder of such penalty in a proceeding
begun as provided in paragraph (2).''
1978 - Pub. L. 95-628 designated existing provisions as subsec.
(a), added subsec. (a) heading, and added subsec. (b).
EFFECTIVE DATE OF 1998 AMENDMENT
Pub. L. 105-206, title III, Sec. 3307(c), July 22, 1998, 112
Stat. 744, provided that: ''The amendments made by this section
(amending this section) shall take effect on the date of the
enactment of this Act (July 22, 1998).''
EFFECTIVE DATE OF 1996 AMENDMENT
Section 901(b) of Pub. L. 104-168 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
proposed assessments made after June 30, 1996.''
Section 903(b) of Pub. L. 104-168 provided that: ''The amendment
made by subsection (a) (amending this section) shall apply to
penalties assessed after the date of the enactment of this Act
(July 30, 1996).''
EFFECTIVE DATE OF 1989 AMENDMENT
Amendment by section 7721(c)(9) of Pub. L. 101-239 applicable to
returns the due date for which (determined without regard to
extensions) is after Dec. 31, 1989, see section 7721(d) of Pub. L.
101-239, set out as a note under section 461 of this title.
Section 7737(b) of Pub. L. 101-239 provided that: ''The amendment
made by subsection (a) (amending this section and sections 6694 and
6703 of this title) shall take effect on the date of the enactment
of this Act (Dec. 19, 1989).''
EFFECTIVE DATE OF 1978 AMENDMENT
Section 9(c) of Pub. L. 95-628 provided that: ''The amendments
made by this section (amending this section and sections 7103 and
7421 of this title) shall apply with respect to penalties assessed
more than 60 days after the date of the enactment of this Act (Nov.
10, 1978).''
PUBLIC INFORMATION TO ENSURE EMPLOYEE AWARENESS OF RESPONSIBILITIES
AND LIABILITIES UNDER TAX DEPOSITORY SYSTEM
Section 904(b) of Pub. L. 104-168 provided that:
''(1) In general. - The Secretary of the Treasury or the
Secretary's delegate (hereafter in this subsection referred to as
the 'Secretary') shall take such actions as may be appropriate to
ensure that employees are aware of their responsibilities under the
Federal tax depository system, the circumstances under which
employees may be liable for the penalty imposed by section 6672 of
the Internal Revenue Code of 1986, and the responsibility to
promptly report to the Internal Revenue Service any failure
referred to in subsection (a) of such section 6672. Such actions
shall include -
''(A) printing of a warning on deposit coupon booklets and the
appropriate tax returns that certain employees may be liable for
the penalty imposed by such section 6672, and
''(B) the development of a special information packet.
''(2) Development of explanatory materials. - The Secretary shall
develop materials explaining the circumstances under which board
members of tax-exempt organizations (including voluntary and
honorary members) may be subject to penalty under section 6672 of
such Code. Such materials shall be made available to tax-exempt
organizations.
''(3) IRS instructions. - The Secretary shall clarify the
instructions to Internal Revenue Service employees on the
application of the penalty under section 6672 of such Code with
regard to voluntary members of boards of trustees or directors of
tax-exempt organizations.''
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 6050C, 6103, 6331, 7103,
7421, 7501 of this title; title 20 section 1099c.
