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tax under section 6651(a)(3) is in an amount of 0.5 percent of
the amount of such tax if the failure to pay the tax is for not
more than one month, with an additional 0.5 percent for each
additional month or fraction thereof during which such failure to
pay continues, not to exceed 25 percent in the aggregate. The
failure to pay penalty thus may continue to accrue for up to 50
months, until payment. The addition to tax under section
6651(a)(3) is imposed unless the taxpayer establishes that the
failure was due to reasonable cause and not willful neglect.
Since petitioner has failed to pay any of the net assessed
balance of tax and section 6651(a)(1) penalties (after
withholding credits), the section 6651(a)(3) failure to pay
penalty in this case equals 25 percent of the net assessed
amounts after withholding credits. Respondent asserts that he is
not required to make a separate assessment of the accruals of the
section 6651(a)(3) additions to tax to collect the accruals. We
agree with respondent for the following reasons:
Section 6665(a) provides, in paragraph (1), that additions
to tax, additional amounts, and penalties are to be paid upon
notice and demand and are to be assessed, collected, and paid in
the same manner as taxes, and paragraph (2) provides that any
reference to “tax” is to be deemed also to refer to the foregoing
items.
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