Penalty Code

Internal Revenue Code Section 6652. Failure to file certain information returns, registration statements, etc.

Read the entire code section here (clicking the link takes you to another web site)

(c) Returns by exempt organizations and by certain trusts
(1) Annual returns under section 6033 (a)(1) or 6012 (a)(6)
(A) Penalty on organization
In the case of—
(i) a failure to file a return required under section 6033 (a)(1)(relating to returns by exempt organizations) or section 6012(a)(6)(relating to returns by political organizations) on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing), or
(ii) a failure to include any of the information required to be shown on a return filed under section 6033(a)(1) or section 6012(a)(6) or to show the correct information,
there shall be paid by the exempt organization $20 for each day during which such failure continues. The maximum penalty under this subparagraph on failures with respect to any 1 return shall not exceed the lesser of $10,000 or 5 percent of the gross receipts of the organization for the year. In the case of an organization having gross receipts exceeding $1,000,000 for any year, with respect to the return required under section 6033(a)(1) or section 6012(a)(6) for such year, the first sentence of this subparagraph shall be applied by substituting “$100” for “$20” and, in lieu of applying the second sentence of this subparagraph, the maximum penalty under this subparagraph shall not exceed $50,000.

(B) Managers
(i) In general The Secretary may make a written demand on any organization subject to penalty under subparagraph (A) specifying therein a reasonable future date by which the return shall be filed (or the information furnished) for purposes of this subparagraph.
(ii) Failure to comply with demand If any person fails to comply with any demand under clause (i) on or before the date specified in such demand, there shall be paid by the person failing to so comply $10 for each day after the expiration of the time specified in such demand during which such failure continues. The maximum penalty imposed under this subparagraph on all persons for failures with respect to any 1 return shall not exceed $5,000.

(C) Public inspection of annual returns and reports
In the case of a failure to comply with the requirements of section 6104(d) with respect to any annual return on the date and in the manner prescribed therefor (determined with regard to any extension of time for filing) or report required under section 527(j), there shall be paid by the person failing to meet such requirements $20 for each day during which such failure continues. The maximum penalty imposed under this subparagraph on all persons for failures with respect to any 1 return or report shall not exceed $10,000.

(D) Public inspection of applications for exemption and notice of status [This refers to Form 1023, Form 1024, and the organization’s determination letter]
In the case of a failure to comply with the requirements of section 6104(d) with respect to any exempt status application materials (as defined in such section) or notice materials (as defined in such section) on the date and in the manner prescribed therefor, there shall be paid by the person failing to meet such requirements $20 for each day during which such failure continues.

(E) No penalty for certain annual notices
This paragraph shall not apply with respect to any notice required under section 6033(i). [This means that there is no monetary penalty for late filing of the electronic postcard, Form 990-N]

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