[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: 26CFR301.6721-0]

[Page 431-432]
 
                       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. 301.6721-0  Table of Contents.

    In order to facilitate the use of Sec. Sec. 301.6721-1 through 
6724-1, this Sec. 301.6721-0 lists the paragraph headings contained in 
these sections.

      Sec. 301.6721-1 Failure to file correct information returns.

    (a) Imposition of penalty.
    (1) General rule.
    (2) Failures subject to the penalty.
    (b) Reduction in the penalty when a correction is made within 
specified periods.
    (1) Correction within 30 days.
    (2) Correction after 30 days but on or before August 1.
    (3) Required filing date defined.
    (4) Penalty amount for return with multiple failures.
    (5) Examples.
    (6) Applications to returns not due on February 28 or March 15.
    (c) Exception for inconsequential errors or omissions.
    (1) In General.
    (2) Errors or omissions that are never inconsequential.
    (3) Examples.
    (d) Exception for a de minimis number of failures.
    (1) Requirements.
    (2) Calculation of the de minimis exception.
    (3) Examples.
    (4) Nonapplication to returns not due on February 28 or March 15.
    (e) Lower limitations on the $250,000 maximum penalty amount with 
respect to persons with gross receipts of not more than $5,000,000.
    (1) In general.
    (2) Gross receipts test.
    (f) Higher penalty for intentional disregard of requirement to file 
timely correct information returns.
    (1) Application of section 6721(e).
    (2) Meaning of ``Intentional disregard.''
    (3) Facts and circumstances considered.
    (4) Amount of the penalty.
    (5) Computation of the penalty; aggregate dollar amount of the items 
required to be reported correctly.
    (6) Examples.
    (g) Definitions.
    (1) Information return.
    (2) Statements.
    (3) Returns.
    (4) Other items.
    (5) Payee.
    (6) Filer.

      Sec. 301.6722-1 Failure to furnish correct payee statements.

    (a) Imposition of penalty.
    (1) General rule.
    (2) Failures subject to the penalty.
    (b) Exception for inconsequential errors or omissions.
    (1) In general.
    (2) Errors or omissions that are never inconsequential.
    (3) Examples.
    (c) Higher penalty for intentional disregard of requirement to 
furnish timely correct payee statements.
    (1) Application of section 6722(c).
    (2) Amount of the penalty.
    (3) Computation of the penalty; aggregate dollar amount of items 
required to be shown correctly.
    (d) Definitions.
    (1) Payee.
    (2) Payee statement.
    (3) Other items.

[[Page 432]]

  Sec. 301.6723-1 Failure to comply with other information reporting 
                              requirements.

    (a) Imposition of penalty.
    (1) General rule.
    (2) Failures subject to the penalty.
    (3) Exception for inconsequential errors or omissions.
    (4) Specified information reporting requirement defined.
    (b) Examples.

                   Sec. 301.6724-1 Reasonable cause.

    (a) Waiver of the penalty.
    (1) General rule.
    (2) Reasonable cause defined.
    (b) Significant mitigating factors.
    (c) Events beyond the filer's control.
    (1) In general.
    (2) Unavailability of the relevant business records.
    (3) Undue economic hardship relating to filing on magnetic media.
    (4) Actions of the Internal Revenue Service.
    (5) Actions of agent--imputed reasonable cause.
    (6) Actions of the payee or any other person.
    (d) Responsible manner.
    (1) In general.
    (2) Special rule for filers seeking a waiver pursuant to paragraph 
(c)(6) of this section.
    (e) Acting in a responsible manner--special rules for missing TINs.
    (1) In general.
    (i) Initial solicitation.
    (ii) First annual solicitation.
    (iii) Second annual solicitation.
    (iv) Additional requirements.
    (v) Failures to which a solicitation relates.
    (vi) Exceptions and limitations.
    (2) Manner of making annual solicitations--by mail or telephone.
    (i) By mail.
    (ii) By telephone.
    (f) Acting in a responsible manner--special rules for incorrect 
TINs.
    (1) In general.
    (i) Initial solicitation.
    (ii) First annual solicitation.
    (iii) Second annual solicitation.
    (iv) Additional requirements.
    (2) Manner of making annual solicitation if notified pursuant to 
section 3406(a)(1)(B) and the regulations thereunder.
    (3) Manner of making annual solicitation if notified pursuant to 
section 6721.
    (4) Failures to which a solicitation relates.
    (5) Exceptions and limitations.
    (g) Due diligence safe harbor.
    (1) In general.
    (2) Special rules relating to TINs.
    (3) Effective dates.
    (h) Transitional rules for information returns required to be filed 
(or payee statements required to be furnished) after December 31, 1989 
(without regard to extensions), and on or before April 22, 1991.
    (1) In general.
    (2) Special rule on TINs.
    (i) [Reserved]
    (j) Failures to which this section relates.
    (k) Examples.
    (l) [Reserved]
    (m) Procedure for seeking a waiver.
    (n) Manner of payment.

[T.D. 8386, 56 FR 67182, Dec. 30, 1991, as amended by T.D. 8734, 62 FR 
53496, Oct. 14, 1997]