26 USC 6656 - Failure to make deposit of taxes

U.S Code last checked for updates: Jan 18, 2025

§ 6656.

Failure to make deposit of taxes

(a)

Underpayment of deposits

(b)

Definitions

For purposes of subsection (a)—

(1)

Applicable percentage

(A)

In general

Except as provided in subparagraph (B), the term “applicable percentage” means—

(i)

2 percent if the failure is for not more than 5 days,

(ii)

5 percent if the failure is for more than 5 days but not more than 15 days, and

(iii)

10 percent if the failure is for more than 15 days.

(B)

Special rule

In any case where the tax is not deposited on or before the earlier of—

(i)

the day 10 days after the date of the first delinquency notice to the taxpayer under section 6303, or

(ii)

the day on which notice and demand for immediate payment is given under section 6861 or 6862 or the last sentence of section 6331(a),

the applicable percentage shall be 15 percent.

(2)

Underpayment

(c)

Exception for first-time depositors of employment taxes

The Secretary may waive the penalty imposed by subsection (a) on a person’s inadvertent failure to deposit any employment tax if—

(1)

such person meets the requirements referred to in section 7430(c)(4)(A)(ii),

(2)

such failure—

(A)

occurs during the first quarter that such person was required to deposit any employment tax; or

(B)

if such person is required to change the frequency of deposits of any employment tax, relates to the first deposit to which such change applies, and

(3)

the return of such tax was filed on or before the due date.

For purposes of this subsection, the term “employment taxes” means the taxes imposed by subtitle C.

(d)

Authority to abate penalty where deposit sent to Secretary

(e)

Designation of periods to which deposits apply

(1)

In general

(2)

Time for making designation

(Aug. 16, 1954, ch. 736, 68A Stat. 826; Pub. L. 91–172, title IX, § 943(b), Dec. 30, 1969, 83 Stat. 728; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97–34, title VII, § 724(a), (b)(1), (3), Aug. 13, 1981, 95 Stat. 344, 345; Pub. L. 99–509, title VIII, § 8001(a), Oct. 21, 1986, 100 Stat. 1951; Pub. L. 101–239, title VII, § 7742(a), Dec. 19, 1989, 103 Stat. 2405; Pub. L. 104–168, title III, § 304(a), title VII, § 701(c)(3), July 30, 1996, 110 Stat. 1458, 1464; Pub. L. 105–206, title III, § 3304(a)–(c), July 22, 1998, 112 Stat. 742.)

cite as: 26 USC 6656