# § 6699. Failure to file S corporation return
**(a)** **General rule** In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any S corporation required to file a return under section 6037 for any taxable year—
such S corporation shall be liable for a penalty determined under subsection (b) for each month (or fraction thereof) during which such failure continues (but not to exceed 12 months), unless it is shown that such failure is due to reasonable cause.
**(1)** fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or
**(2)** files a return which fails to show the information required under section 6037,
**(b)** **Amount per month** For purposes of subsection (a), the amount determined under this subsection for any month is the product of—
**(1)** $195, multiplied by
**(2)** the number of persons who were shareholders in the S corporation during any part of the taxable year.
**(c)** **Assessment of penalty** The penalty imposed by subsection (a) shall be assessed against the S corporation.
**(d)** **Deficiency procedures not to apply** 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).
**(e)** **Adjustment for inflation**
**(1)** **In general** In the case of any return required to be filed in a calendar year beginning after 2014, the $195 dollar amount under subsection (b)(1) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof.
**(2)** **Rounding** If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.
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**Source Credit**: (Added Pub. L. 110–142, § 9(a), Dec. 20, 2007, 121 Stat. 1807; amended Pub. L. 110–458, title I, § 128(a), Dec. 23, 2008, 122 Stat. 5116; Pub. L. 111–92, § 16(a), Nov. 6, 2009, 123 Stat. 2996; Pub. L. 113–295, div. B, title II, § 208(e), Dec. 19, 2014, 128 Stat. 4073; Pub. L. 115–97, title I, § 11002(d)(1)(OO), Dec. 22, 2017, 131 Stat. 2061; Pub. L. 115–141, div. U, title IV, § 401(a)(299)(E), Mar. 23, 2018, 132 Stat. 1198.)
### Inflation Adjusted Items for Certain Years
For inflation adjustment of certain items in this section, see Revenue Procedures listed in a table under .
## Editorial Notes
### Codification
, which directed amendment of this part by adding this section at the end, was executed by inserting this section after section 6698, to reflect the probable intent of Congress.
### Prior Provisions
A prior section 6699, added , , ; amended , (v)(IX), , ; , (4), , , 294; –(D), , ; , , ; , , , related to assessable penalties applicable to tax credit employee stock ownership plans, prior to repeal by , , . For effective date of repeal, see , set out as an Effective Date of 1986 Amendment note under .
### Amendments
2018—Subsec. (e)(1). inserted “an amount equal to” after “increased by” and “for the calendar year” after “section 1(f)(3)”.
2017—Subsec. (e)(1). substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.
2014—Subsec. (e). added subsec. (e).
2009—Subsec. (b)(1). substituted “$195” for “$89”.
2008—Subsec. (b)(1). substituted “$89” for “$85”.
## Statutory Notes and Related Subsidiaries
### Effective Date of 2017 Amendment
Amendment by applicable to taxable years beginning after , see , set out as a note under .
### Effective Date of 2014 Amendment
Amendment by applicable to returns required to be filed, and statements required to be furnished, after , see , set out as a note under .
### Effective Date of 2009 Amendment
Amendment by applicable to returns for taxable years beginning after , see , set out as a note under .
### Effective Date of 2008 Amendment
> “The amendment made by subsection (a) [amending this section] shall apply to returns required to be filed after
>
> .”
, , , provided that:
### Effective Date
> “The amendments made by this section [enacting this section] shall apply to returns required to be filed after the date of the enactment of this Act [
>
> ].”
, , , provided that: