Ill STAT. 984 PUBLIC LAW 105-34—AUG. 5, 1997 26 USC 6046A note. Applicability. "(1) IN GENERAL.—In addition to any criminal penalty provided by law, any person required to file a return under section 6035, 6046, or 6046A who fails to file such return at the time provided in such section, or who files a return which does not show the information required pursuant to such section, shall pay a penalty of $10,000, unless it is shown that such failure is due to reasonable cause. " (2) INCREASE IN PENALTY WHERE FAILURE CONTINUES AFTER NOTIFICATION. —I f any failure described in paragraph (1) continues for more than 90 days after the day on which the Secretary mails notice of such failure to the United States person, such person shall pay a penalty (in addition to the amount required under paragraph (1)) of $10,000 for each 30- day period (or fraction thereof) during which such failure continues after the expiration of such 90-day period. The increase in any penalty under this paragraph shall not exceed $50,000. " (3) REDUCED PENALTY FOR RETURNS RELATING TO FOREIGN PERSONAL HOLDING COMPANIES. —In the case of a return required under section 6035, paragraph (1) shall be applied by substituting '$1,000' for '$10,000', and paragraph (2) shall not apply.". (c) EFFECTIVE DATE.—The amendments made by this section shall apply to transfers and changes after the date of the enactment of this Act. SEC. 1144. TRANSFERS OF PROPERTY TO FOREIGN PARTNERSHIPS SUBJECT TO INFORMATION REPORTING COMPARABLE TO INFORMATION REPORTING FOR SUCH TRANSFERS TO FOREIGN CORPORATIONS. (a) IN GENERAL. — Paragraph (1) of section 6038B(a) (relating to notice of certain transfers to foreign corporations) is amended to read as follows: "(1) transfers property to— "(A) a foreign corporation in an exchange described in section 332, 351, 354, 355, 356, or 361, or "(B) a foreign partnership in a contribution described in section 721 or in any other contribution described in regulations prescribed by the Secretary,". (b) EXCEPTIONS.— Section 6038B is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection: " (b) EXCEPTIONS FOR CERTAIN TRANSFERS TO FOREIGN PARTNER- SHIPS; SPECIAL RULE. — "(1) EXCEPTIONS.— Subsection (a)(1)(B) shall apply to a transfer by a United States person to a foreign partnership only if— "(A) the United States person holds (immediately after the transfer) directly or indirectly at least a 10-percent interest (as defined in section 6046A(d)) in the partnership, or "(B) the value of the property transferred (when added to the value of the property transferred by such person or any related person to such partnership or a related partnership during the 12-month period ending on the date of the transfer) exceeds $100,000.
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