98 STAT. 718 26 USC 274.
PUBLIC LAW 98-369—JULY 18, 1984 (b) COMPLIANCE PROVISIONS.— (1) AMENDMENT OF SECTION
274 (d).—Subsection (d) of section 274 (relating to substantiation requirements) is amended— (A) by striking out "No deduction" and inserting in lieu thereof "No deduction or credit", (B) by striking out "or" at the end of paragraph (2), by inserting "or" at the end of paragraph (3), and by inserting after paragraph (3) the following new paragraph: "(4) with respect to any listed property (as defined in section 280F(d)(4)),", (C) by striking out "adequate records or by sufficient evidence corroborating his own statement" and inserting in lieu thereof "adequate contemporaneous records", and (D) by striking out "the facility" each place it appears following paragraph (4) (as added by subparagraph (B)) and inserting in lieu thereof "the facility or property. (2) DUTIES OF RETURN PREPARERS.—Subsection (b) of section
26 USC 6695.
6695 (relating to failure to sign return) is amended to read as follows: "(b) FAILURE TO INFORM TAXPAYER OF CERTAIN RECORDKEEPING REQUIREMENTS OR TO SIGN RETURN.—Any person who is an income
tax return preparer with respect to any return or claim for refund and who is required by regulations to sign such return or claim— "(1) shall advise the taxpayer of the substantiation requirements of section 274(d) and obtain written confirmation from the taxpayer that such requirements were met with respect to any deduction or credit claimed on such return or claim for refund, and "(2) shall sign such return or claim for refund. Any person who fails to comply with the requirements of the preceding sentence with respect to any return or claim shall pay a penalty of $25 for such failure, unless it is shown that such failure is due to reasonable cause and not to willful neglect." (3) UNDERPAYMENT ATTRIBUTABLE TO FAILURE TO MEET SUBSTANTIATION REQUIREMENTS TREATED AS DUE TO NEGLIGENCE.—
26 USC 6653.
Section 6653 (relating to failure to pay tax) is amended by adding at the end thereof the following new subsection: "(h) SPECIAL RULE IN THE CASE OF UNDERPAYMENT ATTRIBUTABLE TO FAILURE TO MEET CERTAIN SUBSTANTIATION REQUIREMENTS.—
"(1) IN GENERAL.—Any portion of an underpayment attributable to a failure to comply with the requirements of section 274(d) shall be treated, for purposes of subsection (a), as due to negligence in the absence of clear and convincing evidence to the contrary. "(2) PENALTY TO APPLY ONLY TO PORTION OF UNDERPAYMENT DUE TO F A I L U R E TO MEET SUBSTANTIATION REQUIREMENTS.—If any
penalty is imposed under subsection (a) by reason of paragraph (1), the amount of the penalty imposed by paragraph (1) of subsection (a) shall be 5 percent of the portion of the underpayment which is attributable to the failure described in paragraph (1)." (c) CLERICAL AMENDMENT.—The table of sections for part IX of subchapter B of chapter 1 is amended by adding after the item relating to section 280E the following new item: "Sec. 280F. Limitation on investment tax credit and depreciation for luxury automobiles; limitation where certain property used for personal purposes."