[Code of Federal Regulations]
[Title 26, Volume 13]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR]

[Page 482]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
Procedure and Administration--Table of Contents
 
Sec.  1.6662-1  Overview of the accuracy-related penalty.

    Section 6662 imposes an accuracy-related penalty on any portion of 
an underpayment of tax required to be shown on a return that is 
attributable to one or more of the following:
    (a) Negligence or disregard of rules or regulations;
    (b) Any substantial understatement of income tax;
    (c) Any substantial valuation misstatement under chapter 1;
    (d) Any substantial overstatement of pension liabilities; or
    (e) Any substantial estate or gift tax valuation understatement.

Sections 1.6662-1 through 1.6662-5 address only the first three 
components of the accuracy-related penalty, i.e., the penalties for 
negligence or disregard of rules or regulations, substantial 
understatements of income tax, and substantial (or gross) valuation 
misstatements under chapter 1. The penalties for disregard of rules or 
regulations and for a substantial understatement of income tax may be 
avoided by adequately disclosing certain information as provided in 
Sec.  1.6662-3(c) and Sec. Sec.  1.6662-4(e) and (f), respectively. The 
penalties for negligence and for a substantial (or gross) valuation 
misstatement under chapter 1 may not be avoided by disclosure. No 
accuracy-related penalty may be imposed on any portion of an 
underpayment if there was reasonable cause for, and the taxpayer acted 
in good faith with respect to, such portion. The reasonable cause and 
good faith exception to the accuracy-related penalty is set forth in 
Sec.  1.6664-4.

[T.D. 8381, 56 FR 67498, Dec. 31, 1991, as amended by T.D. 8617, 60 FR 
45664, Sept. 1, 1995]

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