II 

110TH CONGRESS 

2D SESSION S. 3121 

To amend the Internal Revenue Code of 1986 to allow the Secretary of 

the Treasury to waive the penalties for failure to disclose reportable 

transactions, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 12, 2008 

Mr. NELSON of Nebraska (for himself, Mr. ROBERTS, Mr. CRAPO, Mr. BAYH, 

and Mr. LUGAR) introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to allow the 

Secretary of the Treasury to waive the penalties for 

failure to disclose reportable transactions, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. WAIVER AND MODIFICATION OF PENALTIES 

4 FOR FAILURE TO DISCLOSE REPORTABLE 

5 TRANSACTIONS. 

6 (a) IN GENERAL.—Subsection (d) of section 6707A 

7 of the Internal Revenue Code of 1986 (relating to author8 ity to rescind penalty) is amended to read as follows: 


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1 ‘‘(d) AUTHORITY TO RESCIND OR WAIVE PEN2 ALTY.— 

3 ‘‘(1) IN GENERAL.—The Secretary may rescind 

4 or waive all or any portion of any penalty imposed 

5 by this section with respect to any violation if— 

6 ‘‘(A) there was reasonable cause for the 

7 violation and the taxpayer acted in good faith, 

8 or 

9 ‘‘(B) rescinding or waiving the penalty 

10 would promote compliance with the require11 ments of this title and effective tax administra12 tion. 

13 ‘‘(2) NO JUDICIAL APPEAL.—Notwithstanding 

14 any other provision of law, any determination under 

15 this subsection may not be reviewed in any judicial 

16 proceeding. 

17 ‘‘(3) RECORDS.—If a penalty is rescinded or 

18 waived under paragraph (1), the Secretary shall set 

19 forth in writing the opinion of the Secretary with re20 spect to the determination, including— 

21 ‘‘(A) a statement of the facts and cir22 cumstances relating to the violation, 

23 ‘‘(B) the reasons for the rescission or waiv24 er, and 


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1 ‘‘(C) the amount of the penalty rescinded 

2 or waived.’’. 

3 (b) CONFORMING AMENDMENT.—Subsection (c) of 

4 section 6707 of the Internal Revenue Code of 1986 (relat5 ing to rescission authority) is amended to read as follows: 

6 ‘‘(c) RESCISSION AUTHORITY.— 

7 ‘‘(1) IN GENERAL.—The Commissioner of In8 ternal Revenue may rescind all or any portion of any 

9 penalty imposed by this section with respect to any 

10 violation if— 

11 ‘‘(A) the violation is with respect to a re12 portable transaction other than a listed trans13 action, and 

14 ‘‘(B) rescinding the penalty would promote 

15 compliance with the requirements of this title 

16 and effective tax administration. 

17 ‘‘(2) NO JUDICIAL APPEAL.—Notwithstanding 

18 any other provision of law, any determination under 

19 this subsection may not be reviewed in any judicial 

20 proceeding. 

21 ‘‘(3) RECORDS.—If a penalty is rescinded under 

22 paragraph (1), the Commissioner shall place in the 

23 file in the Office of the Commissioner the opinion of 

24 the Commissioner with respect to the determination, 

25 including— 


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1 ‘‘(A) a statement of the facts and cir2 cumstances relating to the violation, 

3 ‘‘(B) the reasons for the rescission, and 

4 ‘‘(C) the amount of the penalty re5 scinded.’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to penalties assessed after January 

8 1, 2008. 

Æ 


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