§6697. Assessable penalties with respect to liability for tax of regulated investment companies

(a) Civil penalty

In addition to any other penalty provided by law, any regulated investment company whose tax liability for any taxable year is deemed to be increased pursuant to section 860(c)(1)(A) shall pay a penalty in an amount equal to the amount of the interest (for which such company is liable) which is attributable solely to such increase.

(b) 50-percent limitation

The penalty payable under this section with respect to any determination shall not exceed one-half of the amount of the deduction allowed by section 860(a) for such taxable year.

(c) Deficiency procedures not to apply

Subchapter B of chapter 63 (relating to deficiency procedure 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).

(Added Pub. L. 94–455, title XVI, §1601(b)(1), Oct. 4, 1976, 90 Stat. 1745 ; amended Pub. L. 95–600, title III, §362(b), Nov. 6, 1978, 92 Stat. 2851 ; Pub. L. 99–514, title VI, §667(a), Oct. 22, 1986, 100 Stat. 2305 .)

Amendments

1986-Pub. L. 99–514 substituted "regulated investment companies" for "real estate investment entities" in section catchline.

Subsec. (a). Pub. L. 99–514 amended subsec. (a) generally. Prior to amendment, subsec. (a) read as follows: "In addition to any other penalty provided by law, any qualified investment entity (as defined in section 860(b)) whose tax liability for any taxable year is deemed to be increased pursuant to section 860(c)(1)(A) (relating to interest and additions to tax determined with respect to the amount of the deduction for deficiency dividends allowed) shall pay a penalty in an amount equal to the amount of interest (for which such entity is liable) which is attributable solely to such increase."

1978-Pub. L. 95–600 substituted "qualified investment entities" for "real estate investment trusts" in section catchline.

Subsec. (a). Pub. L. 95–600 substituted "qualified investment entity (as defined in section 860(b))" for "real estate investment trust", "section 860(c)(1)(A)" for "section 859(b)(2)(A)", and "(for which such entity is liable) which" for "for which such trust is liable that".

Subsec. (b). Pub. L. 95–600 substituted "section 860(a)" for "section 859(a)".

Subsec. (c). Pub. L. 95–600 reenacted subsec. (c) without change.

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–514 applicable to taxable years beginning after Dec. 31, 1986, see section 669 of Pub. L. 99–514, set out as a note under section 856 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–600 applicable with respect to determinations (as defined in section 860(e) of this title) after Nov. 6, 1978, see section 362(e) of Pub. L. 95–600, set out as an Effective Date note under section 860 of this title.

Section Referred to in Other Sections

This section is referred to in section 860 of this title.