TEB - IRC Section 6700 Penalty

TEB may enter into a closing agreement for an IRC 6700 violation. IRC Section 6700 penalties may be applied to bond counsel, investment bankers, issuers, conduit borrowers, financial advisors, feasibility consultants, engineers or any other person(s) who is involved in the organization or sale of the bonds and knew or had reason to know that their opinions, documents, reports or other statements were false or fraudulent as to any matter material to the tax-advantaged status of the bonds. For these agreements, determine the IRC 6700 penalty by treating the sale of each bond denomination as a separate activity.

The closing agreement must clearly state:

That the payment is being made in resolution of an IRC 6700 exam.

Whether the closing agreement payment is to be treated as a civil payment or a nondeductible penalty amount.