[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6656-1]

[Page 418-419]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
   Additions to the Tax, Additional Amounts, and Assessable Penalties
 
Sec. 301.6656-1  Abatement of penalty.

    (a) Exception for first time depositors of employment taxes--(1) 
Waiver. The Secretary will generally waive the penalty imposed by 
section 6656(a) on a person's

[[Page 419]]

failure to deposit any employment tax under subtitle C of the Internal 
Revenue Code if--
    (i) The failure is inadvertent;
    (ii) The person meets the requirements referred to in section 
7430(c)(4)(A)(ii) (relating to the net worth requirements applicable for 
awards of attorney's fees);
    (iii) The failure occurs during the first quarter that the person is 
required to deposit any employment tax; and
    (iv) The return of the tax is filed on or before the due date.
    (2) Inadvertent failure. For purposes of paragraph (a)(1)(i) of this 
section, the Secretary will determine if a failure to deposit is 
inadvertent based on all the facts and circumstances.
    (b) Deposit sent to Secretary. The Secretary may abate the penalty 
imposed by section 6656(a) if the first time a depositor is required to 
make a deposit, the amount required to be deposited is inadvertently 
sent to the Secretary instead of to the appropriate government 
depository.
    (c) Effective date. This section applies to deposits required to be 
made after July 30, 1996.

[T.D. 8725, 62 FR 39118, July 22, 1997. Redesignated by T.D. 8947, 66 FR 
32542, June 15, 2001]