26 U.S.C. § 6672 — Failure to collect and pay over tax, or at-

Page 3785 TITLE 26—INTERNAL REVENUE CODE § 6672 Pub. L. 94–455, title XII, § 1203(i)(3), title XVI, § 1601(b)(2), title XIX, § 1904(b)(10)(A)(vi)(II), (D)(ii), (E)(ii), Oct. 4, 1976, 90 Stat. 1694, 1746, 1817, struck out item 6680 ‘‘Failure to file interest equalization tax re- turns’’, item 6681 ‘‘False equalization tax certificates’’ and item 6689 ‘‘Failure by certain foreign issuers and obligors to comply with United States investment equalization tax requirements’’ and added item 6694 ‘‘Understatement of taxpayer’s liability by income tax return preparer’’ and items 6695 to 6697. 1974—Pub. L. 93–406, title II, §§ 1016(b)(3), 1031(b)(2)(B), 1033(d), 2002(h)(4), Sept. 2, 1974, 88 Stat. 932, 946, 948, 971, substituted ‘‘6688’’ for ‘‘6687’’ as section number in item relating to assessable penalties with respect to infor- mation required to be furnished under section 7654, and added items 6690, 6692, and 6693. 1973—Pub. L. 93–17, § 3(d)(3)(B), Apr. 10, 1973, 87 Stat. 17, added item 6689. 1972—Pub. L. 92–606, § 1(f)(7), Oct. 31, 1972, 86 Stat. 1497, added item 6687 relating to assessable penalties with re- spect to information required to be furnished under sec- tion 7654. Pub. L. 92–512, title I, § 144(b)(2), Oct. 20, 1972, 86 Stat. 936, added item 6687 relating to failure to supply infor- mation with respect to place of residence. 1970—Pub. L. 91–258, title II, § 207(d)(13), May 21, 1970, 84 Stat. 249, substituted ‘‘fuels’’ for ‘‘gasoline’’ in item 6675. 1969—Pub. L. 91–172, title I, § 101(j)(60), Dec. 30, 1969, 83 Stat. 532, added items 6684 and 6685. 1966—Pub. L. 89–809, title I, § 104(h)(4)(B), Nov. 13, 1966, 80 Stat. 1560, added item 6683. Pub. L. 89–368, title I, § 101(e)(4)(B), Mar. 15, 1966, 80 Stat. 62, added item 6682. 1965—Pub. L. 89–44, title II, § 202(c)(3)(B), June 21, 1965, 79 Stat. 139, inserted ‘‘or lubricating oil’’ after ‘‘certain gasoline’’ in item 6675. 1964—Pub. L. 88–563, § 6(c)(1), Sept. 2, 1964, 78 Stat. 847, added items 6680 and 6681. 1962—Pub. L. 87–834, §§ 7(i)(3), 19(g)(2), 20(d)(3), Oct. 16, 1962, 76 Stat. 989, 1058, 1063, added items 6677 to 6679. 1961—Pub. L. 87–397, § 1(c)(2), Oct. 5, 1961, 75 Stat. 829, added item 6676. 1956—Act June 29, 1956, ch. 462, title II, § 208(e)(8), 70 Stat. 397, substituted ‘‘Excessive claims with respect to the use of certain gasoline’’ for ‘‘Excessive claims for gasoline used on farms’’ in item 6675. Act Apr. 2, 1956, ch. 160, § 4(g), 70 Stat. 91, added item 6675. § 6671. Rules for application of assessable pen- alties (a) Penalty assessed as tax The penalties and liabilities provided by this subchapter shall be paid upon notice and de- mand by the Secretary, and shall be assessed and collected in the same manner as taxes. Ex- cept as otherwise provided, any reference in this title to ‘‘tax’’ imposed by this title shall be deemed also to refer to the penalties and liabil- ities provided by this subchapter. (b) Person defined The term ‘‘person’’, as used in this subchapter, includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs. (Aug. 16, 1954, ch. 736, 68A Stat. 828; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes AMENDMENTS 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’. § 6672. Failure to collect and pay over tax, or at- tempt to evade or defeat tax (a) General rule Any person required to collect, truthfully ac- count 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 de- feat 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 ac- counted for and paid over. No penalty shall be imposed under section 6653 or part II of sub- chapter 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 sub- section (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 assess- ment of such penalty. (2) Timing of notice The mailing of the notice described in para- graph (1) (or, in the case of such a notice deliv- ered 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 pro- posed assessment, the date 30 days after the Secretary makes a final administrative de- termination with respect to such protest. (4) Exception for jeopardy This subsection shall not apply if the Sec- retary 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 no- tice and demand of any penalty under sub- section (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 li- ability for such penalty, (B) files a claim for refund of the amount so paid, and (C) furnishes a bond which meets the re- quirements of paragraph (3), no levy or proceeding in court for the collec- tion of the remainder of such penalty shall be Page 3786 TITLE 26—INTERNAL REVENUE CODE § 6672 made, begun, or prosecuted until a final reso- lution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421(a), the beginning of such pro- ceeding or levy during the time such prohibi- tion is in force may be enjoined by a pro- ceeding in the proper court. Nothing in this paragraph shall be construed to prohibit any counterclaim for the remainder of such pen- alty in a proceeding begun as provided in para- graph (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 de- scribed in paragraph (1) fails to begin a pro- ceeding in the appropriate United States dis- trict court (or in the Court of Federal Claims) 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 re- ferred to in this paragraph. (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 11⁄2 times the amount of excess of the penalty assessed over the payment described in paragraph (1). (4) Suspension of running of period of limita- tions on collection The running of the period of limitations pro- vided 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 sus- pended for the period during which the Sec- retary 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, noth- ing in this subsection shall prevent the imme- diate collection of such penalty. (d) Right of contribution where more than 1 per- son 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 enti- tled 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 ex- empt from tax under subtitle A if such mem- ber— (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 re- sults in no person being liable for the penalty imposed by subsection (a). (Aug. 16, 1954, ch. 736, 68A Stat. 828; Pub. L. 95–628, § 9(a), Nov. 10, 1978, 92 Stat. 3633; Pub. L. 101–239, title VII, §§ 7721(c)(9), 7737(a), Dec. 19, 1989, 103 Stat. 2400, 2404; Pub. L. 104–168, title IX, §§ 901(a), 903(a), 904(a), July 30, 1996, 110 Stat. 1465–1467; Pub. L. 105–206, title III, § 3307(a), (b), July 22, 1998, 112 Stat. 744; Pub. L. 115–141, div. U, title IV, § 401(a)(325)(D), Mar. 23, 2018, 132 Stat. 1200.) Editorial Notes AMENDMENTS 2018—Subsec. (c)(2). Pub. L. 115–141 substituted ‘‘Court of Federal Claims’’ for ‘‘Court of Claims’’. 1998—Subsec. (b)(1). Pub. L. 105–206, § 3307(a), inserted ‘‘or in person’’ after ‘‘section 6212(b)’’. Subsec. (b)(2). Pub. L. 105–206, § 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, § 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, § 901(a), added subsec. (b) and redesignated former subsec. (b) as (c). Subsec. (d). Pub. L. 104–168, § 903(a), added subsec. (d). Subsec. (e). Pub. L. 104–168, § 904(a), added subsec. (e). 1989—Subsec. (a). Pub. L. 101–239, § 7721(c)(9), inserted ‘‘or part II of subchapter A of chapter 68’’ after ‘‘under section 6653’’. Subsec. (b)(1). Pub. L. 101–239, § 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). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–206, title III, § 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 Pub. L. 104–168, title IX, § 901(b), July 30, 1996, 110 Stat. 1466, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to proposed assessments made after June 30, 1996.’’ Pub. L. 104–168, title IX, § 903(b), July 30, 1996, 110 Stat. 1466, 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 ap- plicable 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. Pub. L. 101–239, title VII, § 7737(b), Dec. 19, 1989, 103 Stat. 2404, provided that: ‘‘The amendment made by Page 3787 TITLE 26—INTERNAL REVENUE CODE § 6673 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 Pub. L. 95–628, § 9(c), Nov. 10, 1978, 92 Stat. 3633, pro- vided 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 AWARE- NESS OF RESPONSIBILITIES AND LIABILITIES UNDER TAX DEPOSITORY SYSTEM Pub. L. 104–168, title IX, § 904(b), July 30, 1996, 110 Stat. 1467, 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 em- ployees may be liable for the penalty imposed by sec- tion 6672 of the Internal Revenue Code of 1986, and the responsibility to promptly report to the Internal Rev- enue Service any failure referred to in subsection (a) of such section 6672. Such actions shall include— ‘‘(A) printing of a warning on deposit coupon book- lets and the appropriate tax returns that certain em- ployees 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 cir- cumstances under which board members of tax-exempt organizations (including voluntary and honorary mem- bers) 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.’’ § 6673. Sanctions and costs awarded by courts (a) Tax court proceedings (1) Procedures instituted primarily for delay, etc. Whenever it appears to the Tax Court that— (A) proceedings before it have been insti- tuted or maintained by the taxpayer pri- marily for delay, (B) the taxpayer’s position in such pro- ceeding is frivolous or groundless, or (C) the taxpayer unreasonably failed to pursue available administrative remedies, the Tax Court, in its decision, may require the taxpayer to pay to the United States a penalty not in excess of $25,000. (2) Counsel’s liability for excessive costs Whenever it appears to the Tax Court that any attorney or other person admitted to practice before the Tax Court has multiplied the proceedings in any case unreasonably and vexatiously, the Tax Court may require— (A) that such attorney or other person pay personally the excess costs, expenses, and attorneys’ fees reasonably incurred because of such conduct, or (B) if such attorney is appearing on behalf of the Commissioner of Internal Revenue, that the United States pay such excess costs, expenses, and attorneys’ fees in the same manner as such an award by a district court. (b) Proceedings in other courts (1) Claims under section 7433 Whenever it appears to the court that the taxpayer’s position in the proceedings before the court instituted or maintained by such taxpayer under section 7433 is frivolous or groundless, the court may require the tax- payer to pay to the United States a penalty not in excess of $10,000. (2) Collection of sanctions and costs In any civil proceeding before any court (other than the Tax Court) which is brought by or against the United States in connection with the determination, collection, or refund of any tax, interest, or penalty under this title, any monetary sanctions, penalties, or costs awarded by the court to the United States may be assessed by the Secretary and, upon notice and demand, may be collected in the same manner as a tax. (3) Sanctions and costs awarded by a court of appeals In connection with any appeal from a pro- ceeding in the Tax Court or a civil proceeding described in paragraph (2), an order of a United States Court of Appeals or the Su- preme Court awarding monetary sanctions, penalties or court costs to the United States may be registered in a district court upon fil- ing a certified copy of such order and shall be enforceable as other district court judgments. Any such sanctions, penalties, or costs may be assessed by the Secretary and, upon notice and demand, may be collected in the same manner as a tax. (Aug. 16, 1954, ch. 736, 68A Stat. 828; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97–248, title II, § 292(b), (d)(2)(A), Sept. 3, 1982, 96 Stat. 574; Pub. L. 99–514, title XV, § 1552(a), Oct. 22, 1986, 100 Stat. 2753; Pub. L. 100–647, title VI, § 6241(b), Nov. 10, 1988, 102 Stat. 3748; Pub. L. 101–239, title VII, § 7731(a), Dec. 19, 1989, 103 Stat. 2400.) Editorial Notes AMENDMENTS 1989—Pub. L. 101–239 substituted ‘‘Sanctions and costs awarded by courts’’ for ‘‘Damages assessable for insti- tuting proceedings before the Court primarily for delay, etc.’’ in section catchline and amended text gen- erally, making changes in substance and structure of subsecs. (a) and (b). 1988—Pub. L. 100–647 struck out ‘‘Tax’’ after ‘‘before the’’ in section catchline, designated existing provi- sions as subsec. (a), and added subsec. (b). 1986—Pub. L. 99–514 substituted ‘‘, that the taxpayer’s position in such proceeding is frivolous or groundless, or that the taxpayer unreasonably failed to pursue available administrative remedies’’ for ‘‘or that the taxpayer’s position in such proceedings is frivolous or groundless’’. 1982—Pub. L. 97–248, § 292(d)(2)(A), substituted ‘‘pri- marily for delay, etc.’’ for ‘‘merely for delay’’ after ‘‘Tax Court’’ in section catchline. Subsec. (a). Pub. L. 97–248, § 292(b), substituted ‘‘or maintained by the taxpayer primarily for delay or that