26 U.S.C. § 6703

Rules applicable to penalties under sections 6700, 6701, and 6702

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(a) Burden of proof

In any proceeding involving the issue of whether or not any person is liable for a penalty under section 6700, 6701, or 6702, the burden of proof with respect to such issue shall be on the Secretary.

(b) Deficiency procedures not to apply

Subchapter B of chapter 63 (relating to deficiency procedures) shall not apply with respect to the assessment or collection of the penalties provided by sections 6700, 6701, and 6702.

If, within 30 days after the day on which notice and demand of any penalty under section 6700 or 6701 is made against any person, such person pays an amount which is not less than 15 percent of the amount of such penalty and files a claim for refund of the amount so paid, no levy or proceeding in court for the collection of the remainder of such penalty shall be made, begun, or prosecuted until the 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) Person must bring suit in district court to determine his liability for penalty

If, within 30 days after the day on which his claim for refund of any partial payment of any penalty under section 6700 or 6701 is denied (or, if earlier, within 30 days after the expiration of 6 months after the day on which he filed the claim for refund), the person fails to begin a proceeding in the appropriate United States district court 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 applicable 30-day period referred to in this paragraph.

(3) 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.

(Added Pub. L. 97–248, title III, § 322(a), Sept. 3, 1982, 96 Stat. 612; amended Pub. L. 101–239, title VII, §§ 7736(a), 7737(a), Dec. 19, 1989, 103 Stat. 2404.)Editorial NotesAmendments

1989—Subsec. (c)(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).”

Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”.

Subsec. (c)(2). Pub. L. 101–239, § 7736(a), substituted “section 6700 or 6701” for “section 6700, 6701, or 6702”.

Statutory Notes and Related SubsidiariesEffective Date of 1989 Amendment

Pub. L. 101–239, title VII, § 7736(b), Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendment made by subsection (a) [amending this section] shall apply to returns filed after December 31, 1989.”

Effective Date

Pub. L. 97–248, title III, § 322(c), Sept. 3, 1982, 96 Stat. 613, provided that: “The amendments made by this section [enacting this section] shall take effect on the day after the date of the enactment of this Act [Sept. 3, 1982].”

Notes of Decisions

Cited in 125 cases (4 in the last 5 years), 1983–2025 · leading case: James M. Thomas v. United States, 755 F.2d 728 (9th Cir. 1985).

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James M. Thomas v. United States, 755 F.2d 728 (9th Cir. 1985). · cites it 5× “To contest the penalty assessment, Thomas filed on July 11, 1983 a 15% partial payment of the penalty and a claim for refund as required by 26 U.S.C. § 6703 (c)(1). After the IRS denied the refund, Thomas filed suit for a refund in district court.”

Kahn, Emily v. United States, 753 F.2d 1208 (3rd Cir. 1985). · cites it 3× “26 U.S.C. § 6703 (1982). For the reasons that follow, we will affirm the decision of the district court.”

Neal v. Regan, 587 F. Supp. 1558 (N.D. Ind. 1984). · cites it 6× “Finally, petitioner had an alternate remedy: 26 U.S.C. § 6703 (c) permits a taxpayer against whom a penalty has been assessed to bring an action for refund in the appropriate federal district court.”

James M. Mullikin v. United States, 952 F.2d 920 (6th Cir. 1992). · cites it 4× “Pursuant to the assessment challenge procedure set forth in 26 U.S.C. § 6703 (c)(1), Mullikin paid fifteen percent of the assessed penalties within thirty days of the notices of assessment and filed claims for refund of the amounts paid.”

Scull v. United States, 585 F. Supp. 956 (E.D. Va. 1984). · cites it 6× “00) of the penalty they made pursuant to 26 U.S.C. § 6703 (c)(1), plus interest, attorney’s fees and costs.”

Humphrey v. United States, 854 F. Supp. 2d 1301 (N.D. Ga. 2011). · cites it 6× “The first exception: under 26 U.S.C. § 6703 , if the taxpayer (1) files for a refund within 30 days of receiving notice of a section 6700 penalty and (2) pays 15% of that penalty, the taxpayer can file an action in the district court without having to pay the full balance of the…”

Marvin D. Miller v. United States of Am. & Internal Revenue Serv., 868 F.2d 236 (7th Cir. 1989). · cites it 3× “He then relied on the judicial review provisions of 26 U.S.C. § 6703 2 to challenge his assessment and the constitutionality of the sixteenth amendment in district court.”

Planned Investments, Inc., Michigan Corp. v. United States, 881 F.2d 340 (6th Cir. 1989). · cites it 3× “26 U.S.C. § 6703 (b). Section 6700 penalties, therefore, must be assessed under the procedures set forth in Subchapter A.”

Allen W. Jolly v. United States, 764 F.2d 642 (9th Cir. 1985). · cites it 3× “Jolly raises three contentions on appeal: (1) that the Form 1040 he filed was not *644 “frivolous” under § 6702, because he validly withheld his personal and financial information based upon his fifth amendment privilege against self-incrimination; (2) that section 6702 is…”

Norman E. Coleman v. Comm'r of Internal Revenue, Gary Holder v. Sec'y of the Treasury & United States of Am., 791 F.2d 68 (7th Cir. 1986). “26 U.S.C. § 6703 . There he argued not only that wages are untaxable but also that § 6702 is unconstitutional.”

In Re Robert J. Burns, Debtor. Robert J. Burns v. United States, 974 F.2d 1064 (9th Cir. 1992). · cites it 3× “He begins from the premise that 26 U.S.C. § 6703 (c)(1) 2 requires a taxpayer to pay fifteen percent of the penalty within thirty days of the notice and demand of the assessment in order to challenge the assessment before collection.”

Sharon D. Welch v. United States, 750 F.2d 1101 (1st Cir. 1985). · cites it 2× “Each of the taxpayers thereafter paid 15 percent of the penalty ($75) and filed a request for a refund of this money and abatement of the remainder of the penalty with the IRS pur *1104 suant to 26 U.S.C. § 6703 (c)(1). 4 When the IRS denied the taxpayers’ claims, they brought…”

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