118 STAT. 1584 PUBLIC LAW 108–357—OCT. 22, 2004 (b) CLERICAL AMENDMENT.—The item relating to section 6707 in the table of sections for part I of subchapter B of chapter 68 is amended by striking ‘‘tax shelters’’ and inserting ‘‘reportable transactions’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to returns the due date for which is after the date of the enactment of this Act. SEC. 817. MODIFICATION OF PENALTY FOR FAILURE TO MAINTAIN LISTS OF INVESTORS. (a) IN GENERAL.—Subsection (a) of section 6708 is amended to read as follows: ‘‘(a) IMPOSITION OF PENALTY.— ‘‘(1) IN GENERAL.—If any person who is required to main tain a list under section 6112(a) fails to make such list available upon written request to the Secretary in accordance with section 6112(b) within 20 business days after the date of such request, such person shall pay a penalty of $10,000 for each day of such failure after such 20th day. ‘‘(2) REASONABLE CAUSE EXCEPTION.—No penalty shall be imposed by paragraph (1) with respect to the failure on any day if such failure is due to reasonable cause.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to requests made after the date of the enactment of this Act. SEC. 818. PENALTY ON PROMOTERS OF TAX SHELTERS. (a) PENALTY ON PROMOTING ABUSIVE TAX SHELTERS.—Section 6700(a) is amended by adding at the end the following new sentence: ‘‘Notwithstanding the first sentence, if an activity with respect to which a penalty imposed under this subsection involves a state ment described in paragraph (2)(A), the amount of the penalty shall be equal to 50 percent of the gross income derived (or to be derived) from such activity by the person on which the penalty is imposed.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply to activities after the date of the enactment of this Act. SEC. 819. MODIFICATIONS OF SUBSTANTIAL UNDERSTATEMENT PEN ALTY FOR NONREPORTABLE TRANSACTIONS. (a) SUBSTANTIAL UNDERSTATEMENT OF CORPORATIONS.—Section 6662(d)(1)(B) (relating to special rule for corporations) is amended to read as follows: ‘‘(B) SPECIAL RULE FOR CORPORATIONS.—In the case of a corporation other than an S corporation or a personal holding company (as defined in section 542), there is a substantial understatement of income tax for any taxable year if the amount of the understatement for the taxable year exceeds the lesser of— ‘‘(i) 10 percent of the tax required to be shown on the return for the taxable year (or, if greater, $10,000), or ‘‘(ii) $10,000,000.’’. (b) SECRETARIAL LIST.— (1) IN GENERAL.—Section 6662(d) is amended by adding at the end the following new paragraph: 26 USC 6700 note. 26 USC 6708 note. Deadline. 26 USC 6707 note.
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