26 U.S.C. § 6695B — Penalty for substantial misstatements on certification provided by supplier

FEDERAL · 26 U.S.C. · Chapter 68

Penalty for substantial misstatements on certification provided by supplier

Current through Pub. L. 119-102

Title 26 — Internal Revenue Code·Ch. 68 — ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE PENALTIES·Subch. B·Pt. I

(a)Imposition of penalty If—

(1)a person—

(A)provides a certification described in clause (iii)(II)(bb) of section 7701(a)(52)(D) with respect to any manufactured product, eligible component, or constituent element, material, or subcomponent of an eligible component, and

(B)knows, or reasonably should have known, that the certification would be used in connection with a determination under such section,

(2)such person knows, or reasonably should have known, that such certification is inaccurate or false with respect to—

(A)whether such property was produced or manufactured by a prohibited foreign entity, or

(B)the total direct costs or total direct material costs of such property that was not produced or manufactured by a prohibited foreign entity that were provided on such certific

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(a) Imposition of penalty
If—
(1) a person—
(A) provides a certification described in clause (iii)(II)(bb) of section 7701(a)(52)(D) with respect to any manufactured product, eligible component, or constituent element, material, or subcomponent of an eligible component, and
(B) knows, or reasonably should have known, that the certification would be used in connection with a determination under such section,
(2) such person knows, or reasonably should have known, that such certification is inaccurate or false with respect to—
(A) whether such property was produced or manufactured by a prohibited foreign entity, or
(B) the total direct costs or total direct material costs of such property that was not produced or manufactured by a prohibited foreign entity that were provided on such certification, and
(3) the inaccuracy or falsity described in paragraph (2) resulted in the disallowance of an applicable energy credit (as defined in section 6662(m)(2)) and an understatement of income tax (within the meaning of section 6662(d)(2)) for the taxable year in an amount which exceeds the lesser of—
(A) 5 percent of the tax required to be shown on the return for the taxable year, or
(B) $100,000,
then such person shall pay a penalty in the amount determined under subsection (b).
(b) Amount of penalty
The amount of the penalty imposed under subsection (a) on any person with respect to a certification shall be equal to the greater of—
(1) 10 percent of the amount of the underpayment (as defined in section 6664(a)) solely attributable to the inaccuracy or falsity described in subsection (a)(2), or
(2) $5,000.
(c) Exception
No penalty shall be imposed under subsection (a) if the person establishes to the satisfaction of the Secretary that any inaccuracy or falsity described in subsection (a)(2) is due to a reasonable cause and not willful neglect.
(d) Definitions
Any term used in this section which is also used in section 7701(a)(52) shall have the meaning given such term in such section.

26 U.S.C. § 6695B (Penalty for substantial misstatements on certification provided by supplier) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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History

(Added Pub. L. 119–21, title VII, §70512(k)(1), July 4, 2025, 139 Stat. 268.)

Editorial Notes

Statutory Notes and Related Subsidiaries

Effective Date
Section applicable to certifications provided after Dec. 31, 2025, see section 70512(l)(3) of Pub. L. 119–21, set out in an Effective Date of 2025 Amendment note under section 45 of this title.