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26 U.S.C. § 6677 — Failure to file information with respect to certain foreign trusts
Federal law — U.S. Code and appendices · legal_authorities
**(a) Civil penalty** In addition to any criminal penalty provided by law, if any notice or return required to be filed by section 6048—
(1) is not filed on or before the time provided in such section, or
(2) does not include all the information required pursuant to such section or includes incorrect information,
the person required to file such notice or return shall pay a penalty equal to the greater of $10,000 or 35 percent of the gross reportable amount. If any failure described in the preceding sentence continues for more than 90 days after the day on which the Secretary mails notice of such failure to the person required to pay such penalty, such person shall pay a penalty (in addition to the amount determined under the preceding sentence) of $10,000 for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. At such time as the gross reportable amount with respect to any failure can be determined by the Secretary, any subsequent penalty imposed under this subsection with respect to such failure shall be reduced as necessary to assure that the aggregate amount of such penalties do not exceed the gross reportable amount (and to the extent that such aggregate amount already exceeds the gross reportable amount the Secretary shall refund such excess to the taxpayer).
**(b) Special rules for returns under section 6048(b)** In the case of a return required under section 6048(b)—
(1) the United States person referred to in such section shall be liable for the penalty imposed by subsection (a), and
(2) subsection (a) shall be applied by substituting “5 percent” for “35 percent”.
**(c) Gross reportable amount** For purposes of subsection (a), the term “gross reportable amount” means—
(1) the gross valu
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Source file: Laws/federal/codes/united-states-code/title-26/section-6677-failure-to-file-information-with-respect-to-certain-foreign-trusts--1b88a2190c.md
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Source location: Title 26, Chapter 68, § 6677; chapter-068-additions-to-the-tax-additional-amounts-and-assessable-penalties.md
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**(a) Civil penalty** In addition to any criminal penalty provided by law, if any notice or return required to be filed by section 6048—
(1) is not filed on or before the time provided in such section, or
(2) does not include all the information required pursuant to such section or includes incorrect information,
the person required to file such notice or return shall pay a penalty equal to the greater of $10,000 or 35 percent of the gross reportable amount. If any failure described in the preceding sentence continues for more than 90 days after the day on which the Secretary mails notice of such failure to the person required to pay such penalty, such person shall pay a penalty (in addition to the amount determined under the preceding sentence) of $10,000 for each 30-day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. At such time as the gross reportable amount with respect to any failure can be determined by the Secretary, any subsequent penalty imposed under this subsection with respect to such failure shall be reduced as necessary to assure that the aggregate amount of such penalties do not exceed the gross reportable amount (and to the extent that such aggregate amount already exceeds the gross reportable amount the Secretary shall refund such excess to the taxpayer).
**(b) Special rules for returns under section 6048(b)** In the case of a return required under section 6048(b)—
(1) the United States person referred to in such section shall be liable for the penalty imposed by subsection (a), and
(2) subsection (a) shall be applied by substituting “5 percent” for “35 percent”.
**(c) Gross reportable amount** For purposes of subsection (a), the term “gross reportable amount” means—
(1) the gross value of the property involved in the event (determined as of the date of the event) in the case of a failure relating to section 6048(a),
(2) the gross value of the portion of the trust’s assets at the close of the year treated as owned by the United States person in the case of a failure relating to section 6048(b)(1), and
(3) the gross amount of the distributions in the case of a failure relating to section 6048(c).
**(d) Reasonable cause exception** No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. The fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause.
**(e) Deficiency procedures not to apply** 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).
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Transferor treated as owner**
(1) **In general** — A United States person who directly or indirectly transfers property to a foreign trust (other than a trust described in section 6048(a)(3)(B)(ii)) shall be treated as the owner for his taxable year of the portion of such trust attributable to such property if for such year there is a United States beneficiary of any portion of such trust.
(2) **Exceptions** — Paragraph (1) shall not apply—
(A) *Transfers by reason of death* — To any transfer by reason of the death of the transferor.
(B) *Transfers at fair market value* — To any transfer of property to a trust in exchange for consideration of at least the fair market value of the transferred property. For purposes of the preceding sentence, consideration other than cash shall be taken into account at its fair market value.
(3) **Certain obligations not taken into account under fair market value exception**
(A) *In general* — In determining whether paragraph (2)(B) applies to any transfer by a person described in clause (ii) or (iii) of subparagraph (C), there shall not be taken into account—
(i) except as provided in regulations, any obligation of a person described in subparagraph (C), and
(ii) to the extent provided in regulations, any obligation which is guaranteed by a person described in subparagraph (C).
(B) *Treatment of principal payments on obligation* — Principal payments by the trust on any obligation referred to in subparagraph (A) shall be taken into account on and after the date of the payment in determining the portion of the trust attributable to the property transferred.
(C) *Persons described* — The persons described in this subparagraph are—
(i) the trust,
(ii) any grantor, owner, or beneficiary of the trust
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Tax-exempt foundations** There is hereby imposed on each private foundation which is exempt from taxation under section 501(a) for the taxable year, with respect to the carrying on of its activities, a tax equal to 1.39 percent of the net investment income of such foundation for the taxable year.
**(b) Taxable foundations** There is hereby imposed on each private foundation which is not exempt from taxation under section 501(a) for the taxable year, with respect to the carrying on of its activities, a tax equal to—
(1) the amount (if any) by which the sum of (A) the tax imposed under subsection (a) (computed as if such subsection applied to such private foundation for the taxable year), plus (B) the amount of the tax which would have been imposed under section 511 for the taxable year if such private foundation had been exempt from taxation under section 501(a), exceeds
(2) the tax imposed under subtitle A on such private foundation for the taxable year.
**(c) Net investment income defined**
(1) **In general** — For purposes of subsection (a), the net investment income is the amount by which (A) the sum of the gross investment income and the capital gain net income exceeds (B) the deductions allowed by paragraph (3). Except to the extent inconsistent with the provisions of this section, net investment income shall be determined under the principles of subtitle A.
(2) **Gross investment income** — For purposes of paragraph (1), the term “gross investment income” means the gross amount of income from interest, dividends, rents, payments with respect to securities loans (as defined in section 512(a)(5)), and royalties, but not including any such income to the extent included in computing the tax imposed by section 511. Such term shall also include income from s
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Participation**
(1) **Minimum age and service conditions**
(A) *General rule* — A trust shall not constitute a qualified trust under section 401(a) if the plan of which it is a part requires, as a condition of participation in the plan, that an employee complete a period of service with the employer or employers maintaining the plan extending beyond the later of the following dates—
(i) the date on which the employee attains the age of 21; or
(ii) the date on which he completes 1 year of service.
(B) *Special rules for certain plans*
(i) In the case of any plan which provides that after not more than 2 years of service each participant has a right to 100 percent of his accrued benefit under the plan which is nonforfeitable (within the meaning of section 411) at the time such benefit accrues, clause (ii) of subparagraph (A) shall be applied by substituting “2 years of service” for “1 year of service”.
(ii) In the case of any plan maintained exclusively for employees of an educational institution (as defined in section 170(b)(1)(A)(ii)) by an employer which is exempt from tax under section 501(a) which provides that each participant having at least 1 year of service has a right to 100 percent of his accrued benefit under the plan which is nonforfeitable (within the meaning of section 411) at the time such benefit accrues, clause (i) of subparagraph (A) shall be applied by substituting “26” for “21”. This clause shall not apply to any plan to which clause (i) applies.
(2) **Maximum age conditions** — A trust shall not constitute a qualified trust under section 401(a) if the plan of which it is a part excludes from participation (on the basis of age) employees who have attained a specified age.
(3) **Definition of year of service**
(A)
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Notice of certain events**
(1) **General rule** — On or before the 90th day (or such later day as the Secretary may prescribe) after any reportable event, the responsible party shall provide written notice of such event to the Secretary in accordance with paragraph (2).
(2) **Contents of notice** — The notice required by paragraph (1) shall contain such information as the Secretary may prescribe, including—
(A) the amount of money or other property (if any) transferred to the trust in connection with the reportable event, and
(B) the identity of the trust and of each trustee and beneficiary (or class of beneficiaries) of the trust.
(3) **Reportable event** — For purposes of this subsection—
(A) *In general* — The term “reportable event” means—
(i) the creation of any foreign trust by a United States person,
(ii) the transfer of any money or property (directly or indirectly) to a foreign trust by a United States person, including a transfer by reason of death, and
(iii) the death of a citizen or resident of the United States if—
(I) the decedent was treated as the owner of any portion of a foreign trust under the rules of subpart E of part I of subchapter J of chapter 1, or
(II) any portion of a foreign trust was included in the gross estate of the decedent.
(B) *Exceptions*
(i) *Fair market value sales* — Subparagraph (A)(ii) shall not apply to any transfer of property to a trust in exchange for consideration of at least the fair market value of the transferred property. For purposes of the preceding sentence, consideration other than cash shall be taken into account at its fair market value and the rules of section 679(a)(3) shall apply.
(ii) *Deferred compensation and charitable trusts* — Subparagraph (A) sha
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Federal law — U.S. Code and appendices · legal_authorities
Page 3789
TITLE 26—INTERNAL REVENUE CODE
§ 6677
Subsec. (a). Act June 29, 1956, § 208(d)(2)(B), inserted
reference to claims made under section 6421.
Subsec. (b). Act June 29, 1956, § 208(d)(2)(C), inserted
reference to amounts claimed under section 6421.
Statutory Notes and Related Subsidiaries
EFFECTIVE DATE OF 2005 AMENDMENT
Amendment by Pub. L. 109–59 applicable to sales after
Dec. 31, 2005, see section 11163(e) of Pub. L. 109–59, set
out as a note under section 4101 of this title.
EFFECTIVE DATE OF 1983 AMENDMENT
Amendment by Pub. L. 97–424 applicable with respect
to articles sold after Jan. 6, 1983, see section 515(c) of
Pub. L. 97–424, set out as a note under section 34 of this
title.
EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by Pub. L. 95–618 effective on first day of
first calendar month which begins more than 10 days
after Nov. 9, 1978, see section 233(d) of Pub. L. 95–618, set
out as a note under section 34 of this title.
EFFECTIVE DATE OF 1970 AMENDMENT
Amendment by Pub. L. 91–258 effective July 1, 1970,
see section 211(a) of Pub. L. 91–258, set out as a note
under section 4041 of this title.
EFFECTIVE DATE OF 1965 AMENDMENT
Amendment by Pub. L. 89–44 effective Jan. 1, 1966, see
section 701(a)(1), (2) of Pub. L. 89–44, set out as a note
under section 4161 of this title.
EFFECTIVE DATE OF 1956 AMENDMENT
Amendment by act June 29, 1956, effective June 29,
1956, see section 211 of act June 29, 1956, set out as a
note under section 4041 of this title.
§ 6676. Erroneous claim for refund or credit
(a) Civil penalty
If a claim for refund or credit with respect to
income tax is made for an excessive amount, un-
less it is shown that the claim for such excessive
amount is due to reasonable cause, the person
making such claim shall b
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