26 U.S.C. § 6662
Imposition of accuracy-related penalty on underpayments
If this section applies to any portion of an underpayment of tax required to be shown on a return, there shall be added to the tax an amount equal to 20 percent of the portion of the underpayment to which this section applies.
For purposes of this section, the term “negligence” includes any failure to make a reasonable attempt to comply with the provisions of this title, and the term “disregard” includes any careless, reckless, or intentional disregard.
In the case of any taxpayer who claims any deduction allowed under section 199A for the taxable year, subparagraph (A) shall be applied by substituting “5 percent” for “10 percent”.
Subparagraph (B) shall not apply to any item attributable to a tax shelter.
The Secretary may prescribe a list of positions which the Secretary believes do not meet 1 or more of the standards specified in paragraph (2)(B)(i), section 6664(d)(3), and section 6694(a)(1). Such list (and any revisions thereof) shall be published in the Federal Register or the Internal Revenue Bulletin.
No penalty shall be imposed by reason of subsection (b)(3) unless the portion of the underpayment for the taxable year attributable to substantial valuation misstatements under chapter 1 exceeds $5,000 ($10,000 in the case of a corporation other than an S corporation or a personal holding company (as defined in section 542)).
The term “net section 482 transfer price adjustment” means, with respect to any taxable year, the net increase in taxable income for the taxable year (determined without regard to any amount carried to such taxable year from another taxable year) resulting from adjustments under section 482 in the price for any property or services (or for the use of property).
If the regular tax (as defined in section 55(c)) imposed by chapter 1 on the taxpayer is determined by reference to an amount other than taxable income, such amount shall be treated as the taxable income of such taxpayer for purposes of this paragraph.
For purposes of section 6664(c) the taxpayer shall not be treated as having reasonable cause for any portion of an underpayment attributable to a net section 482 transfer price adjustment unless such taxpayer meets the requirements of clause (i), (ii), or (iii) of subparagraph (B) with respect to such portion.
For purposes of this section, there is a substantial overstatement of pension liabilities if the actuarial determination of the liabilities taken into account for purposes of computing the deduction under paragraph (1) or (2) of section 404(a) is 200 percent or more of the amount determined to be the correct amount of such liabilities.
No penalty shall be imposed by reason of subsection (b)(4) unless the portion of the underpayment for the taxable year attributable to substantial overstatements of pension liabilities exceeds $1,000.
For purposes of this section, there is a substantial estate or gift tax valuation understatement if the value of any property claimed on any return of tax imposed by subtitle B is 65 percent or less of the amount determined to be the correct amount of such valuation.
No penalty shall be imposed by reason of subsection (b)(5) unless the portion of the underpayment attributable to substantial estate or gift tax valuation understatements for the taxable period (or, in the case of the tax imposed by chapter 11, with respect to the estate of the decedent) exceeds $5,000.
To the extent that a portion of the underpayment to which this section applies is attributable to one or more gross valuation misstatements, subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”.
In the case of any portion of an underpayment which is attributable to one or more nondisclosed noneconomic substance transactions, subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”.
For purposes of this subsection, the term “nondisclosed noneconomic substance transaction” means any portion of a transaction described in subsection (b)(6) with respect to which the relevant facts affecting the tax treatment are not adequately disclosed in the return nor in a statement attached to the return.
In no event shall any amendment or supplement to a return of tax be taken into account for purposes of this subsection if the amendment or supplement is filed after the earlier of the date the taxpayer is first contacted by the Secretary regarding the examination of the return or such other date as is specified by the Secretary.
For purposes of this section, the term “undisclosed foreign financial asset understatement” means, for any taxable year, the portion of the understatement for such taxable year which is attributable to any transaction involving an undisclosed foreign financial asset.
For purposes of this subsection, the term “undisclosed foreign financial asset” means, with respect to any taxable year, any asset with respect to which information was required to be provided under section 6038, 6038B, 6038D, 6046A, or 6048 for such taxable year but was not provided by the taxpayer as required under the provisions of those sections.
In the case of any portion of an underpayment which is attributable to any undisclosed foreign financial asset understatement, subsection (a) shall be applied with respect to such portion by substituting “40 percent” for “20 percent”.
For purposes of this section, the term “inconsistent estate basis” means any portion of an underpayment attributable to the failure to comply with section 1014(f).
In the case of any portion of an underpayment which is attributable to one or more overstatements of the deduction provided in section 170(p), subsection (a) shall be applied with respect to such portion by substituting “50 percent” for “20 percent”.
For purposes of this subsection, the term “disallowance of an applicable energy credit” means the disallowance of a credit under section 45X, 45Y, or 48E by reason of overstating the material assistance cost ratio (as determined under section 7701(a)(52)) with respect to any qualified facility, energy storage technology, or facility which produces eligible components.
Another section 212(b) of div. EE of Pub. L. 116–260 amended section 63 of this title.
Section 1409(b)(1), (2) of Pub. L. 111–152, which directed the amendment of section 6662 without specifying the act to be amended, was executed to this section, which is section 6662 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2010 Amendment notes below.
Section 1219(a)(1), (2) of Pub. L. 109–280, which directed the amendment of section 6662 without specifying the act to be amended, was executed to this section, which is section 6662 of the Internal Revenue Code of 1986, to reflect the probable intent of Congress. See 2006 Amendment notes below.
A prior section 6662, acts Aug. 16, 1954, ch. 736, 68A Stat. 827, § 6659;
2025—Subsec. (m). Pub. L. 119–21 added subsec. (m).
2022—Subsec. (b)(10). Pub. L. 117–328, § 605(a)(2)(A), added par. (10).
Subsec. (h)(2)(D). Pub. L. 117–328, § 605(a)(2)(B), added subpar. (D).
2020—Subsec. (b)(9). Pub. L. 116–260, § 212(b)(1), added par. (9).
Subsec. (l). Pub. L. 116–260, § 212(b)(2), added subsec. (l).
2018—Subsec. (d)(1)(C). Pub. L. 115–141, § 101(a)(2)(A), substituted “any deduction” for “the deduction”.
Subsec. (d)(3). Pub. L. 115–141, § 401(a)(303), substituted “section 6664(d)(3)” for “section 6664(d)(2)”.
Subsecs. (i), (j). Pub. L. 115–141, § 401(a)(304), transferred subsec. (i) to appear before subsec. (j).
Subsec. (k). Pub. L. 115–141, § 104(a), amended subsec. (k) generally. Prior to amendment, text read as follows: “For purposes of this section, there is an ‘inconsistent estate basis’ if the basis of property claimed on a return exceeds the basis as determined under section 1014(f).”
2017—Subsec. (d)(1)(C). Pub. L. 115–97 added subpar. (C).
2015—Subsec. (b)(8). Pub. L. 114–41, § 2004(c)(1), added par. (8).
Subsec. (k). Pub. L. 114–41, § 2004(c)(2), added subsec. (k).
2014—Subsec. (b)(7). Pub. L. 113–295, § 208(a), amended directory language of Pub. L. 111–147, § 512(a)(1). See 2010 Amendment note below.
2010—Subsec. (b)(6). Pub. L. 111–152, § 1409(b)(1), added par. (6). See Codification note above.
Subsec. (b)(7). Pub. L. 111–147, § 512(a)(1), as amended by Pub. L. 113–295, § 208(a), added par. (7).
Subsec. (i). Pub. L. 111–152, § 1409(b)(2), added subsec. (i). See Codification note above.
Subsec. (j). Pub. L. 111–147, § 512(a)(2), added subsec. (j).
2006—Subsec. (e)(1)(A). Pub. L. 109–280, § 1219(a)(1)(A), substituted “150 percent” for “200 percent”. See Codification note above.
Subsec. (g)(1). Pub. L. 109–280, § 1219(a)(1)(B), substituted “65 percent” for “50 percent”. See Codification note above.
Subsec. (h)(2)(A)(i), (ii). Pub. L. 109–280, § 1219(a)(2)(A), amended cls. (i) and (ii) generally. Prior to amendment, cls. (i) and (ii) read as follows:
“(i) ‘400 percent’ for ‘200 percent’ each place it appears,
“(ii) ‘25 percent’ for ‘50 percent’, and”.
See Codification note above.
Subsec. (h)(2)(C). Pub. L. 109–280, § 1219(a)(2)(B), substituted “ ‘40 percent’ for ‘65 percent’ ” for “ ‘25 percent’ for ‘50 percent’ ”. See Codification note above.
2005—Subsec. (b). Pub. L. 109–135, § 403(x)(1), inserted at end “Except as provided in paragraph (1) or (2)(B) of section 6662A(e), this section shall not apply to the portion of any underpayment which is attributable to a reportable transaction understatement on which a penalty is imposed under section 6662A.”
Subsec. (d)(3). Pub. L. 109–135, § 412(aaa), struck out “the” before “1 or more”.
2004—Pub. L. 108–357, § 812(e)(1), inserted “on underpayments” after “penalty” in section catchline.
Subsec. (d)(1)(B). Pub. L. 108–357, § 819(a), reenacted heading without change and amended text of subpar. (B) generally. Prior to amendment, text read as follows: “In the case of a corporation other than an S corporation or a personal holding company (as defined in section 542), paragraph (1) shall be applied by substituting ‘$10,000’ for ‘$5,000’.”
Subsec. (d)(2)(A). Pub. L. 108–357, § 812(b), inserted concluding provisions.
Subsec. (d)(2)(C). Pub. L. 108–357, § 812(d), amended subpar. (C) generally, substituting provisions relating to inapplicability of subpar. (B) to any item attributable to a tax shelter and defining the term “tax shelter” for provisions relating to, in the case of any item of a taxpayer other than a corporation which is attributable to a tax shelter, inapplicability of subpar. (B)(ii) and inapplicability of subpar. (B)(i), unless the taxpayer reasonably believed that the tax treatment of such item by the taxpayer was more likely than not the proper treatment, inapplicability of subpar. (B) to any item of a corporation which is attributable to a tax shelter, and provisions defining the term “tax shelter”.
Subsec. (d)(2)(D). Pub. L. 108–357, § 819(b)(2), struck out heading and text of subpar. (D). Text read as follows: “The Secretary shall prescribe (and revise not less frequently than annually) a list of positions—
“(i) for which the Secretary believes there is not substantial authority, and
“(ii) which affect a significant number of taxpayers.
Such list (and any revision thereof) shall be published in the Federal Register.”
Subsec. (d)(3). Pub. L. 108–357, § 819(b)(1), added par. (3).
1997—Subsec. (d)(2)(B). Pub. L. 105–34, § 1028(c)(1), inserted concluding provisions.
Subsec. (d)(2)(C)(iii). Pub. L. 105–34, § 1028(c)(2), substituted “a significant purpose” for “the principal purpose” in concluding provisions.
1994—Subsec. (d)(2)(C)(i). Pub. L. 103–465, § 744(b)(1), substituted “In the case of any item of a taxpayer other than a corporation which is” for “In the case of any item” in introductory provisions.
Subsec. (d)(2)(C)(ii). Pub. L. 103–465, § 744(a), added cl. (ii). Former cl. (ii) redesignated (iii).
Subsec. (d)(2)(C)(iii). Pub. L. 103–465, § 744(a), (b)(2), redesignated cl. (ii) as (iii) and substituted “this subparagraph” for “clause (i)” in introductory provisions.
1993—Subsec. (d)(2)(B)(ii). Pub. L. 103–66, § 13251(a), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “any item with respect to which the relevant facts affecting the item’s tax treatment are adequately disclosed in the return or in a statement attached to the return.”
Subsec. (e)(1)(B)(ii). Pub. L. 103–66, § 13236(a), amended cl. (ii) generally. Prior to amendment, cl. (ii) read as follows: “the net section 482 transfer price adjustment for the taxable year exceeds $10,000,000.”
Subsec. (e)(3)(B). Pub. L. 103–66, § 13236(b), amended heading and text of subpar. (B) generally. Prior to amendment, text read as follows: “For purposes of determining whether the $10,000,000 threshold requirement of paragraph (1)(B)(ii) is met, there shall be excluded—
“(i) any portion of the net increase in taxable income referred to in subparagraph (A) which is attributable to any redetermination of a price if it is shown that there was a reasonable cause for the taxpayer’s determination of such price and that the taxpayer acted in good faith with respect to such price, and
“(ii) any portion of such net increase which is attributable to any transaction solely between foreign corporations unless, in the case of any of such corporations, the treatment of such transaction affects the determination of income from sources within the United States or taxable income effectively connected with the conduct of a trade or business within the United States.”
Subsec. (e)(3)(D). Pub. L. 103–66, § 13236(c), added subpar. (D).
Subsec. (h)(2)(A)(iii). Pub. L. 103–66, § 13236(d), amended cl. (iii) generally. Prior to amendment, cl. (iii) read as follows: “ ‘$20,000,000’ for ‘$10,000,000’,”.
1990—Subsec. (b)(3). Pub. L. 101–508, § 11312(b)(1), amended par. (3) generally, substituting “misstatement” for “overstatement”.
Subsec. (e). Pub. L. 101–508, § 11312(a), substituted “misstatement” for “overstatement” in heading and amended text generally. Prior to amendment, text read as follows:
“(1)
“(2)
Subsec. (h)(2)(A). Pub. L. 101–508, § 11312(b)(2), amended subpar. (A) generally. Prior to amendment, subpar. (A) read as follows: “any substantial valuation overstatement under chapter 1 as determined under subsection (e) by substituting ‘400 percent’ for ‘200 percent’,”.
Amendment by Pub. L. 119–21 applicable to taxable years beginning after
Amendment by Pub. L. 117–328 applicable to contributions made after
Amendment by Pub. L. 116–260 applicable to taxable years beginning after
Amendment by section 101(a)(2)(A) of Pub. L. 115–141 effective as if included in section 11011 of Pub. L. 115–97, see section 101(d) of Pub. L. 115–141, set out as a note under section 62 of this title.
Pub. L. 115–141, div. U, title I, § 104(c),
Amendment by Pub. L. 115–97 applicable to taxable years beginning after
Amendment by Pub. L. 114–41 applicable to property with respect to which an estate tax return is filed after
Pub. L. 113–295, div. A, title II, § 208(b),
Pub. L. 111–152, title I, § 1409(e),
Pub. L. 111–147, title V, § 512(b),
Amendment by Pub. L. 109–280 applicable to returns filed after
Amendment by section 403(x)(1) of Pub. L. 109–135 effective as if included in the provision of the American Jobs Creation Act of 2004, Pub. L. 108–357, to which such amendment relates, see section 403(nn) of Pub. L. 109–135, set out as a note under section 26 of this title.
Pub. L. 108–357, title VIII, § 812(f),
Pub. L. 108–357, title VIII, § 819(c),
Amendment by Pub. L. 105–34 applicable to items with respect to transactions entered into after
Pub. L. 103–465, title VII, § 744(c),
Pub. L. 103–66, title XIII, § 13236(e),
Pub. L. 103–66, title XIII, § 13251(b),
Pub. L. 101–508, title XI, § 11312(c),
Section applicable to returns the due date for which (determined without regard to extensions) is after