(c) Extension of period of collection where bond is filed
(1) In general
If, within 30 days after the day on which notice and demand of any penalty under subsection (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 liability for such penalty,
(B) files a claim for refund of the amount so paid, and
(C) furnishes a bond which meets the requirements of paragraph (3),
no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until a final resolution of a proceeding begun as provided in paragraph (2). Notwithstanding the provisions of section 7421(a), the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court. 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).
(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 described in paragraph (1) fails to begin a proceeding in the appropriate United States district court (or in the Court of 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 referred to in this paragraph.
See References in Text note below.
(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 1½ times the amount of excess of the penalty assessed over the payment described in paragraph (1).
(4) Suspension of running of period of limitations on collection
The running of the period of limitations provided 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 suspended for the period during which the Secretary 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, nothing in this subsection shall prevent the immediate collection of such penalty.
References in Text
The Court of Claims, referred to in subsec. (c)(2), and the United States Court of Customs and Patent Appeals were merged effective Oct. 1, 1982, into a new United States Court of Appeals for the Federal Circuit by Pub. L. 97–164, Apr. 2, 1982, 96 Stat. 25, which also created a United States Claims Court [now United States Court of Federal Claims] that inherited the trial jurisdiction of the Court of Claims. See sections 48, 171 et seq., 791 et seq., and 1491 et seq. of Title 28, Judiciary and Judicial Procedure.
Amendments
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).
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 applicable 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 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, provided 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 Awareness 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 employees may be liable for the penalty imposed by section 6672 of the Internal Revenue Code of 1986, and the responsibility to promptly report to the Internal Revenue Service any failure referred to in subsection (a) of such section 6672. Such actions shall include—
“(A) printing of a warning on deposit coupon booklets and the appropriate tax returns that certain employees 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 circumstances under which board members of tax-exempt organizations (including voluntary and honorary members) 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.”