26 C.F.R. § 301.6688-1T Assessable penalties with respect to information required to be furnished with respect to possessions (temporary).
Title 26 - Internal Revenue
(a) In general. Each individual who is subject to an information reporting requirement promulgated under the authority of section 937(c) or 7654 and who fails to fully satisfy such requirement within the time prescribed for reporting such information shall, in addition to any criminal penalty provided by law, pay a penalty of $1000 for each such failure. Information reporting requirements promulgated under the authority of sections 937(c) and 7654(e) include the following: (1) The requirement to file Form 8689, “Allocation of Individual Income Tax to the Virgin Islands,” under §1.932–1T(b)(1) of this chapter, for certain individuals with income from sources within the United States Virgin Islands. (2) [Reserved] (3) [Reserved] (4) The requirement for individuals to report that they became or ceased to be a bona fide resident of a possession under §1.937–1T(g) of this chapter. (b) Manner of payment. The penalty set forth in paragraph (a) of this section shall be paid in the same manner as tax upon the issuance of a notice and demand therefor. (c) Reasonable cause—(1) In general. The penalty set forth in paragraph (a) of this section shall not apply if it is established to the satisfaction of the appropriate tax authority (as defined in paragraph (c)(2) of this section) that the failure to file the information return or furnish the information within the prescribed time was due to reasonable cause and not to willful neglect. An individual who wishes to avoid the penalty must make an affirmative showing of all facts alleged as a reasonable cause for failure to file the information return on time, or furnish the information on time, in the form of a written statement containing a declaration that it is made under penalties of perjury. Such statement must be filed with the appropriate tax authority. In determining whether there was reasonable cause for failure to furnish the required information, account will be taken of the fact that the individual was unable to furnish the required information in spite of the exercise of ordinary business care and prudence in his effort to furnish the information. An individual will be considered to have exercised ordinary business care and prudence in his effort to furnish the required information if he made reasonable efforts to furnish the information but was unable to do so because of a lack of sufficient facts on which to make a proper determination. (2) Appropriate tax authority. For purposes of this section, the appropriate tax authority is the person responsible for tax administration in the jurisdiction to which the information is required to be provided. Thus, in the case of information required under section 937(c) or under section 7654 to be provided to the Internal Revenue Service, the appropriate tax authority is the Commissioner. In the case of information required under section 7654 (as in effect with respect to section 935 possessions (as defined in §1.935–1T(a)(3)(i) of this chapter) to be provided to the tax authorities of a section 935 possession, the appropriate tax authority is the person responsible for tax administration in such possession or his delegate. See §1.935–1(b) of this chapter for the rules that specify where returns of income tax must be filed for the taxable year by individuals to whom section 935 applies. (d) Effective date. This section shall apply for taxable years ending after October 22, 2004. [T.D. 9194, 70 FR 18947, Apr. 11, 2005]
Title 26: Internal Revenue
PART 301—PROCEDURE AND ADMINISTRATION
Additions to the Tax, Additional Amounts, and Assessable Penalties
Additions to the Tax and Additional Amounts
§ 301.6688-1T Assessable penalties with respect to information required to be furnished with respect to possessions (temporary).
