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penalties in sections 6663 and 6651 are computed. Prior to the
enactment of section 6663 in 1989, section 6653(b) imposed a
penalty for fraud, regardless of whether or not a return was
filed. When Congress enacted section 6663 imposing a fraud
penalty for fraudulent returns, it added section 6651(f) imposing
a separate penalty for any fraudulent failure to file a return.
The penalty for fraudulent failure to file is imposed by using
the following statutory language:
SEC. 6651(a) Addition to the Tax.--In case of failure--
(1) to file any return required under authority of
subchapter A of chapter 61 * * * there shall be added
to the amount required to be shown as tax on such
return * * * [15] percent of the amount of such tax if
the failure is for not more than 1 month, with an
additional * * * [15] percent for each additional month
or fraction thereof during which such failure
continues, not exceeding * * * [75] percent in the
aggregate; [Sec. 6651(a), (f); emphasis added.5]
The above-quoted language makes it clear that the section 6651
fraud penalty applies to the tax that was required to be shown on
a specific return on the specific date that such return was
required to be filed. This statutory language literally
precludes any allowance for expenses incurred after the return
due date in computing the fraud penalty. In 1989, when Congress
enacted separate fraud penalties for fraudulent returns and
fraudulent failures to file, there was nothing to indicate that
5The bracketed percentages are substituted into sec. 6651(a)
pursuant to sec. 6651(f) in cases where the failure to file is
fraudulent.
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