Page:United States Statutes at Large Volume 100 Part 3.djvu/933

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PUBLIC LAW 99-000—MMMM. DD, 1986

PUBLIC LAW 99-514—OCT. 22, 1986 a

100 STAT. 2741

"PART I—GENERAL PROVISIONS".

(4) The table of sections for subchapter B of chapter 68 (as jn effect before the amendment made by paragraph (3)) is amended by striking out the item relating to section 6678. (e) EFFECTIVE DATE.—The amendments made by this section shall apply to returns the due date for which (determined without regard to extensions) is after December 31, 1986, except that the amendments made by subsections (c)(2), (c)(3), and (c)(5) shall apply to returns the due for which (determined without regard to extensions) is after the date of the enactment of this Act. SEC. 1502. INCREASE IN PENALTY FOR FAILURE TO PAY TAX.

(a) GENERAL RULE.—Section 6651 (relating to failure to file tax return or to pay tax) is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection: "(d) INCREASE IN PENALTY FOR FAILURE TO PAY TAX IN CERTAIN CASES.—

.

"(1) IN GENERAL.—In the case of each month (or fraction thereof) beginning after the day described in paragraph (2) of this subsection, paragraphs (2) and (3) of subsection (a) shall be applied by substituting '1 percent' for '0.5 percent' each place it appears. "(2) DESCRIPTION.—For purposes of paragraph (1), the day described in this paragraph is the earlier of^ "(A) the day 10 days after the date on which notice is given under section 6331(d), or "(B) the day on which notice and demand for immediate payment is given under the last sentence of section 6331(a)." (b) REPEAL OF CERTAIN REDUCTION IN FAILURE TO PAY PENALTY.—

Paragraph (1) of section 6651(c) is amended to read as follows: "(1) ADDITIONS UNDER MORE THAN ONE PARAGRAPH.—With

respect to any return, the amount of the addition under paragraph (1) of subsection (a) shall be reduced by the amount of the addition under paragraph (2) of subsection (a) for any month (or fraction thereof to which an addition to tax applies under both paragraphs (1) and (2). In any case described in the last sentence of subsection (a), the amount of the addition under paragraph (1) of subsection (a) shall not be reduced under the preceding sentence below the amount provided in such last sentence. (c) EFFECTIVE DATES.— (1) SUBSECTION (a).—The amendments made by subsection (a)

shall apply— (A) to failures to pay which begin after December 31, 1986, and (B) to failures to pay which begin on or before December 31, 1986, if after December 31, 1986— ' (i) notice (or renotice) under section 6331(d) of the Internal Revenue Code of 1954 is given with respect to such failure, or (ii) notice and demand for immediate payment of the underpayment is made under the last sentence of section 6331(a) of such Code. ! In the case of a failure to pay described in subparagraph (B), paragraph (2) of section 6651(d) of such Code (as added by

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