Page:United States Statutes at Large Volume 100 Part 3.djvu/924

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PUBLIC LAW 99-000—MMMM. DD, 1986

100 STAT. 2732

PUBLIC LAW 99-514—OCT. 22, 1986 before the date 1 year after the date of the enactment of this Act. (d) ELECTION FOR CERTAIN TRANSFERS BENEFITING GRANDCHILD.—

(1) IN GENERAL.—For purposes of chapter 13 of the Internal Revenue Code of 1986 (as amended by this Act) and subsection (b) of this section, any transfer in trust for the benefit of a grandchild of a transferor shall be treated as a direct skip if— (A) the transfer occurs before the date of enactment of this Act, (B) the transfer would be a direct skip except for the fact that the trust instrument provides that, if the grandchild dies before vesting of the interest transferred, the interest is transferred to the grandchild's heir (rather than the grandchild's estate), and (C) an election under this subsection applies to such transfer. Any transfer treated as a direct skip by reason of the preceding sentence shall be subject to Federal estate tax on the grandchild's death in the same manner as if the contingent gift over had been to the grandchild's estate. (2) ELECTION.—An election under paragraph (1) shall be made at such time and in such manner as the Secretary of the Treasury or his delegate may prescribe.

TITLE XV—COMPLIANCE AND TAX ADMINISTRATION Subtitle A—Revision of Certain Penalties, Etc. SEC. 1501. PENALTY FOR FAILURE TO FILE INFORMATION RETURNS OR STATEMENTS.

(a) GENERAL RULE.—Subchapter B of chapter 68 (relating to assessable penalties) is amended by adding at the end thereof the following new part: "PART II—FAILURE TO FILE CERTAIN INFORMATION RETURNS OR STATEMENTS "Sec. "Sec. "Sec. "Sec.

6721. Failure to file certain information returns. 6722. Failure to furnish certain payee statements. 6723. Failure to include correct information. 6724. Waiver; definitions and special rules.

"SEC. 6721. FAILURE TO FILE CERTAIN INFORMATION RETURNS.

"(a) GENERAL RULE.—In the case of each failure to file an information return with the Secretary on the date prescribed therefor (determined with regard to any extension of time for filing), the person failing to so file such return shall pay $50 for each such failure, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $100,000. "(b) PENALTY IN CASE OF INTENTIONAL DISREGARD.—If 1 or more failures to which subsection (a) applies are due to intentional disregard of the filing requirement, then, with respect to each such failure— "(1) the penalty imposed under subsection (a) shall be $100, or, if greater—