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20.1.2.10
(09-04-2009)
Failure to File S Corporation Return - IRC section 6699
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IRC section 6699 imposes a penalty on a S corporation that fails to file a timely or complete returns as required by IRC
section 6037.
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This penalty is imposed on those S corporations that fail to file a timely or complete S corporation return ( Form 1120-S
.
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Treas. Reg. section 301.6037-2, requires a S corporation with over 250 shareholders to file the return electronically. For
each shareholder over the 250 threshold, the penalty is $50. The penalty is assessed using TC 246 with Reference Number 688
and applies under IRC section 6721(a)(2)(A). See IRM 21.7.4.4.4.15 .
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For S corporations outside the United States, See IRM 20.1.2.1.2.1(8) for the application of the FTF/FTP penalties. See also
IRM 3.22.3.2 .
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