Treaty-Based Position Penalty Waiver

IRC §6712

Taxpayers can request a waiver of the $1,000 (or $10,000 for C-corps) penalty for failing to disclose treaty-based return positions by demonstrating reasonable cause and good faith.

Eligibility

Applies to taxpayers who failed to file Form 8833 but can show their failure was not due to willful neglect.

Frequently Asked Questions

Who is eligible for the Treaty-Based Position Penalty Waiver?

Applies to taxpayers who failed to file Form 8833 but can show their failure was not due to willful neglect.

How does the Treaty-Based Position Penalty Waiver work?

Taxpayers can request a waiver of the $1,000 (or $10,000 for C-corps) penalty for failing to disclose treaty-based return positions by demonstrating reasonable cause and good faith.

What law authorizes the Treaty-Based Position Penalty Waiver?

The Treaty-Based Position Penalty Waiver is authorized under IRC §6712 of the Internal Revenue Code (Title 26, United States Code).

Statutory Text — IRC §6712

Source: Internal Revenue Code, Title 26, United States Code

§ 6712. Failure to disclose treaty-based return positions(a) General ruleIf a taxpayer fails to meet the requirements of section 6114, there is hereby imposed a penalty equal to $1,000 ($10,000 in the case of a C corporation) on each such failure. (b) Authority to waiveThe Secretary may waive all or any part of the penalty provided by this section on a showing by the taxpayer that there was reasonable cause for the failure and that the taxpayer acted in good faith. (c) Penalty in addition to other penaltiesThe penalty imposed by this section shall be in addition to any other penalty imposed by law. (Added Pub. L. 100–647, title I, § 1012(aa)(5)(B), Nov. 10, 1988, 102 Stat. 3532.) Editorial Notes Codification Another section 6712 was renumbered section 6713 of this title. Statutory Notes and Related Subsidiaries Effective DateSection applicable to taxable periods the due date for filing returns for which (without extension) occurs after Dec. 31, 1988, see section 1012(aa)(5)(D) of Pub. L. 100–647, set out as a note under section 6114 of this title.

Legal Sources

US Code (Official) — 26 USC §6712 → Cornell Law Institute — 26 USC §6712 → Search IRS.gov for IRC §6712 → Treasury Regulations (26 CFR) →

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