U.S. Code » Title 26 » Subtitle Subtitle F— Procedure and Administration › Chapter CHAPTER 68— ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES › Subchapter Subchapter B— Assessable Penalties › Part PART I— GENERAL PROVISIONS

26 U.S.C. § 6707A

Penalty for failure to include reportable transaction information with return

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(a) Imposition of penalty

Any person who fails to include on any return or statement any information with respect to a reportable transaction which is required under section 6011 to be included with such return or statement shall pay a penalty in the amount determined under subsection (b).

(b) Amount of penalty(1) In general

Except as otherwise provided in this subsection, the amount of the penalty under subsection (a) with respect to any reportable transaction shall be 75 percent of the decrease in tax shown on the return as a result of such transaction (or which would have resulted from such transaction if such transaction were respected for Federal tax purposes).

(2) Maximum penaltyThe amount of the penalty under subsection (a) with respect to any reportable transaction shall not exceed—(A) in the case of a listed transaction, $200,000 ($100,000 in the case of a natural person), or(B) in the case of any other reportable transaction, $50,000 ($10,000 in the case of a natural person).(3) Minimum penalty

The amount of the penalty under subsection (a) with respect to any transaction shall not be less than $10,000 ($5,000 in the case of a natural person).

(c) DefinitionsFor purposes of this section:(1) Reportable transaction

The term “reportable transaction” means any transaction with respect to which information is required to be included with a return or statement because, as determined under regulations prescribed under section 6011, such transaction is of a type which the Secretary determines as having a potential for tax avoidance or evasion.

(2) Listed transaction

The term “listed transaction” means a reportable transaction which is the same as, or substantially similar to, a transaction specifically identified by the Secretary as a tax avoidance transaction for purposes of section 6011.

(d) Authority to rescind penalty(1) In generalThe Commissioner of Internal Revenue may rescind all or any portion of any penalty imposed by this section with respect to any violation if—(A) the violation is with respect to a reportable transaction other than a listed transaction, and(B) rescinding the penalty would promote compliance with the requirements of this title and effective tax administration.(2) No judicial appeal

Notwithstanding any other provision of law, any determination under this subsection may not be reviewed in any judicial proceeding.

(3) RecordsIf a penalty is rescinded under paragraph (1), the Commissioner shall place in the file in the Office of the Commissioner the opinion of the Commissioner with respect to the determination, including—(A) a statement of the facts and circumstances relating to the violation,(B) the reasons for the rescission, and(C) the amount of the penalty rescinded.(e) Penalty reported to SECIn the case of a person—(1) which is required to file periodic reports under section 13 or 15(d) of the Securities Exchange Act of 1934 or is required to be consolidated with another person for purposes of such reports, and(2) which—(A) is required to pay a penalty under this section with respect to a listed transaction,(B) is required to pay a penalty under section 6662A with respect to any reportable transaction at a rate prescribed under section 6662A(c), or(C) is required to pay a penalty under section 6662(h) with respect to any reportable transaction and would (but for section 6662A(e)(2)(B)) have been subject to penalty under section 6662A at a rate prescribed under section 6662A(c),the requirement to pay such penalty shall be disclosed in such reports filed by such person for such periods as the Secretary shall specify. Failure to make a disclosure in accordance with the preceding sentence shall be treated as a failure to which the penalty under subsection (b)(2) applies.(f) Coordination with other penalties

The penalty imposed by this section shall be in addition to any other penalty imposed by this title.

(Added Pub. L. 108–357, title VIII, § 811(a), Oct. 22, 2004, 118 Stat. 1575; amended Pub. L. 110–172, § 11(a)(41), Dec. 29, 2007, 121 Stat. 2488; Pub. L. 111–240, title II, § 2041(a), Sept. 27, 2010, 124 Stat. 2560.)Editorial NotesReferences in Text

Sections 13 and 15(d) of the Securities Exchange Act of 1934, referred to in subsec. (e)(1), are classified to sections 78m and 78o(d), respectively, of Title 15, Commerce and Trade.

Amendments

2010—Subsec. (b). Pub. L. 111–240 amended subsec. (b) generally. Prior to amendment, subsec. (b) specified the amount of the penalty under subsec. (a), both in general and with respect to a listed transaction, in the case of a natural person or in any other case.

2007—Subsec. (e)(2)(C). Pub. L. 110–172 substituted “section 6662A(e)(2)(B)” for “section 6662A(e)(2)(C)”.

Statutory Notes and Related SubsidiariesEffective Date of 2010 Amendment

Pub. L. 111–240, title II, § 2041(b), Sept. 27, 2010, 124 Stat. 2560, provided that: “The amendment made by this section [amending this section] shall apply to penalties assessed after December 31, 2006.”

Effective Date

Pub. L. 108–357, title VIII, § 811(c), Oct. 22, 2004, 118 Stat. 1577, as amended by Pub. L. 109–135, title IV, § 403(w), Dec. 21, 2005, 119 Stat. 2629, provided that: “The amendments made by this section [enacting this section] shall apply to returns and statements the due date for which is after the date of the enactment of this Act [Oct. 22, 2004] and which were not filed before such date.”

Report

Pub. L. 108–357, title VIII, § 811(d), Oct. 22, 2004, 118 Stat. 1577, provided that: “The Commissioner of Internal Revenue shall annually report to the Committee on Ways and Means of the House of Representatives and the Committee on Finance of the Senate—“(1) a summary of the total number and aggregate amount of penalties imposed, and rescinded, under section 6707A of the Internal Revenue Code of 1986, and“(2) a description of each penalty rescinded under section 6707(c) of such Code and the reasons therefor.”

Notes of Decisions
Cited in 33 cases (15 in the last 5 years), 2007–2026 · leading case: Keller Tank Servs. II, Inc. v. Comm'r, 854 F.3d 1178 (10th Cir. 2017).
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Keller Tank Servs. II, Inc. v. Comm'r, 854 F.3d 1178 (10th Cir. 2017). · cites it 5× “26 U.S.C. § 6707A: Penalty for failure to include reportable transaction information with return (a) Imposition of penalty Any person who fails to include on any return or statement any information with respect to a reportable transaction which is required under section 6011 to…”
Mann Constr., Inc. v. United States, 27 F.4th 1138 (6th Cir. 2022). · cites it 5× “In 2004, Congress added 26 U.S.C. § 6707A to the IRS’s arsenal of tools for identifying tax avoidance schemes.”
Interior Glass Sys., Inc. v. United States, 927 F.3d 1081 (9th Cir. 2019). · cites it 6× “Although the term “substantially similar” appears in the penalty-imposing statute, 26 U.S.C. § 6707A, the statute does not define the term.”
Cic Servs., LLC v. Internal Revenue Serv., 925 F.3d 247 (6th Cir. 2019). · cites it 2× “See 26 U.S.C. § 6707A. In exercising that authority, the IRS requires taxpayers and certain third parties to maintain and submit records pertaining to any “reportable transaction[s].”
United States v. BDO Seidman, LLP, 492 F.3d 806 (7th Cir. 2007). “” 26 U.S.C. § 6707A. All reportable transactions must be reported to the IRS, see id.”
Diversified Grp. Inc. v. United States, 841 F.3d 975 (Fed. Cir. 2016). “424, 430 (2009) (noting that “this Court has never exercised jurisdiction over an assessable penalty that was not related to a deficiency, even absent Congress’ explicitly circumscribing our jurisdiction” and finding that the Tax Court did not have jurisdiction over penalties…”
Mann Constr., Inc. v. United States, 86 F.4th 1159 (6th Cir. 2023). “26 U.S.C. §§ 6707A(a), (c)(2). Three years later, the IRS issued Notice 2007-83, which labeled employee-benefit plans with cash-value life insurance policies as listed transactions.”
Stephen May v. United States, 691 F. App'x 334 (9th Cir. 2017). · cites it 2× “” 26 U.S.C. § 6707A(c)(2). 2 Section 6501(c)(10) provides in full: (10) Listed transactions.”
Turnham v. United States, 383 F. Supp. 3d 1288 (M.D. Ala. 2019). · cites it 2× “Turnham was required to file a Form 8886 and assessed him a $ 10,000 penalty for each of the tax years at issue under 26 U.S.C. § 6707A. That statute imposes penalties on persons who fail to include information on their returns "with respect to a reportable transaction.”
Vee's Mktg., Inc. v. United States, 816 F.3d 499 (7th Cir. 2016). “See 26 U.S.C. § 6707A; 26 C.F.R. §§ 1.6011-4 (a), (b)(2), (c)(3)(i)(A), (d); IRS Notice 2000-15, 2000- 1 C.”
Barzillai v. United States (Fed. Cl. 2018). · cites it 26× “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
Millennium Mktg. Grp., LLC v. United States, 253 F.R.D. 407 (S.D. Tex. 2008). “A Thirty-Day Letter notifies the participant that he will be assessed penalties under 26 U.S.C. § 6707A for failure to disclose the Plan transaction on his return.”
Show all 33 citing cases →
— 26 U.S.C. § 6707A(a) — 8 cases
Interior Glass Sys., Inc. v. United States, 927 F.3d 1081 (9th Cir. 2019). “Although the term “substantially similar” appears in the penalty-imposing statute, 26 U.S.C. § 6707A, the statute does not define the term.”
Mann Constr., Inc. v. United States, 86 F.4th 1159 (6th Cir. 2023). “26 U.S.C. §§ 6707A(a), (c)(2). Three years later, the IRS issued Notice 2007-83, which labeled employee-benefit plans with cash-value life insurance policies as listed transactions.”
Turnham v. United States, 383 F. Supp. 3d 1288 (M.D. Ala. 2019). “Turnham was required to file a Form 8886 and assessed him a $ 10,000 penalty for each of the tax years at issue under 26 U.S.C. § 6707A. That statute imposes penalties on persons who fail to include information on their returns "with respect to a reportable transaction.”
Yari v. Comm'r, 669 F. App'x 489 (9th Cir. 2016).
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
— 26 U.S.C. § 6707A(b) — 5 cases
Keller Tank Servs. II, Inc. v. Comm'r, 854 F.3d 1178 (10th Cir. 2017). “26 U.S.C. § 6707A: Penalty for failure to include reportable transaction information with return (a) Imposition of penalty Any person who fails to include on any return or statement any information with respect to a reportable transaction which is required under section 6011 to…”
Govig & Assocs. Inc. v. United States Internal Revenue Serv. (D. Ariz. 2020).
Keller Tank Servs. v. CIR (10th Cir. 2017).
Mann Constr., Inc. v. United States of Am. (E.D. Mich. 2020).
Mann Constr., Inc. v. United States of Am. (E.D. Mich. 2021).
— 26 U.S.C. § 6707A(b)(1) — 1 case
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
— 26 U.S.C. § 6707A(b)(2) — 3 cases
Keller Tank Servs. II, Inc. v. Comm'r, 854 F.3d 1178 (10th Cir. 2017). “26 U.S.C. § 6707A: Penalty for failure to include reportable transaction information with return (a) Imposition of penalty Any person who fails to include on any return or statement any information with respect to a reportable transaction which is required under section 6011 to…”
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
Keller Tank Servs. v. CIR (10th Cir. 2017).
— 26 U.S.C. § 6707A(b)(2)(A) — 1 case
GBX Assocs. LLC v. United States of Am. (N.D. Ohio 2022).
— 26 U.S.C. § 6707A(c)(1) — 6 cases
Mann Constr., Inc. v. United States, 27 F.4th 1138 (6th Cir. 2022). “In 2004, Congress added 26 U.S.C. § 6707A to the IRS’s arsenal of tools for identifying tax avoidance schemes.”
Green Rock LLC v. Internal Revenue Serv., 104 F.4th 220 (11th Cir. 2024).
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
CIC Servs., LLC v. Internal Revenue Serv. (E.D. Tenn. 2023).
United States of Am. v. Brandon Ross Williams & Refund HQ, LLC (E.D. Ky. 2026).
— 26 U.S.C. § 6707A(c)(2) — 7 cases
Interior Glass Sys., Inc. v. United States, 927 F.3d 1081 (9th Cir. 2019). “Although the term “substantially similar” appears in the penalty-imposing statute, 26 U.S.C. § 6707A, the statute does not define the term.”
Stephen May v. United States, 691 F. App'x 334 (9th Cir. 2017). “” 26 U.S.C. § 6707A(c)(2). 2 Section 6501(c)(10) provides in full: (10) Listed transactions.”
Green Rock LLC v. Internal Revenue Serv., 104 F.4th 220 (11th Cir. 2024).
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
Govig & Assocs. Inc. v. United States of Am. (D. Ariz. 2023).
— 26 U.S.C. § 6707A(d) — 1 case
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
— 26 U.S.C. § 6707A(d)(1) — 1 case
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
— 26 U.S.C. § 6707A(d)(1)(A) — 2 cases
Interior Glass Sys., Inc. v. United States, 927 F.3d 1081 (9th Cir. 2019). “Although the term “substantially similar” appears in the penalty-imposing statute, 26 U.S.C. § 6707A, the statute does not define the term.”
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
— 26 U.S.C. § 6707A(d)(2) — 3 cases
Keller Tank Servs. II, Inc. v. Comm'r, 854 F.3d 1178 (10th Cir. 2017). “26 U.S.C. § 6707A: Penalty for failure to include reportable transaction information with return (a) Imposition of penalty Any person who fails to include on any return or statement any information with respect to a reportable transaction which is required under section 6011 to…”
Barzillai v. United States (Fed. Cl. 2018). “2016), the United States Court of Appeals for the Federal Circuit referenced Section 6707A of the Internal Revenue Code (“IRC”), 26 U.S.C. § 6707A, concerning the United States Tax Court’s jurisdiction thereunder.”
Keller Tank Servs. v. CIR (10th Cir. 2017).
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