Federal · Title 26 — Internal Revenue Code

26 U.S.C. § 6677: Failure to file information with respect to certain foreign trusts

Civil

What this law says, in plain English

A U.S. person who fails to file required information about foreign trusts or files incomplete or incorrect information is subject to a penalty calculated as a percentage of the trust property value, unless the failure was due to reasonable cause and not willful neglect.

Read the full statutory text

is not filed on or before the time provided in such section, or does not include all the information required pursuant to such section or includes incorrect information, the United States person referred to in such section shall be liable for the penalty imposed by subsection (a), and subsection (a) shall be applied by substituting “5 percent” for “35 percent”. the gross value of the property involved in the event (determined as of the date of the event) in the case of a failure relating to section 6048(a), the gross value of the portion of the trust’s assets at the close of the year treated as owned by the United States person in the case of a failure relating to section 6048(b)(1), and the gross amount of the distributions in the case of a failure relating to section 6048(c). No penalty shall be imposed by this section on any failure which is shown to be due to reasonable cause and not due to willful neglect. The fact that a foreign jurisdiction would impose a civil or criminal penalty on the taxpayer (or any other person) for disclosing the required information is not reasonable cause. Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).

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