---
kind: "section"
citation: "26 U.S.C. § 6695B"
title: "26"
title_heading: "Internal Revenue Code"
number: "6695B"
heading: "Penalty for substantial misstatements on certification provided by supplier"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/6695B"
units:
  - "Subtitle F — Procedure and Administration"
  - "Chapter 68 — Additions to the Tax, Additional Amounts, and Assessable Penalties"
  - "Subchapter B — Assessable Penalties"
  - "Part I — General Provisions"
---

# §6695B. Penalty for substantial misstatements on certification provided by supplier

- (a) **Imposition of penalty—** If—
  - (1) a [person](/usc/26/7701.md?p=a-1)—
    - (A) provides a certification described in [clause (iii)(II)(bb)](/usc/26/7701.md?p=a-52-D-iii-II-bb) of section 7701(a)(52)(D) with respect to any [manufactured product](/usc/26/7701.md?p=a-52-E-iii), [eligible component](/usc/26/7701.md?p=a-51-I-iii), or constituent element, material, or subcomponent of an [eligible component](/usc/26/7701.md?p=a-51-I-iii), and
    - (B) knows, or reasonably should have known, that the certification would be used in connection with a determination under such section,
  - (2) such [person](/usc/26/7701.md?p=a-1) knows, or reasonably should have known, that such certification is inaccurate or false with respect to—
    - (A) whether such property was produced or manufactured by a [prohibited foreign entity](/usc/26/7701.md?p=a-51-A-i), or
    - (B) the total direct costs or total direct material costs of such property that was not produced or manufactured by a [prohibited foreign entity](/usc/26/7701.md?p=a-51-A-i) that were provided on such certification, and
  - (3) the inaccuracy or falsity described in [paragraph (2)](#a-2) resulted in the disallowance of an applicable energy credit (as defined in [section 6662(m)(2)](/usc/26/6662.md?p=m-2)) and an understatement of income tax (within the meaning of [section 6662(d)(2)](/usc/26/6662.md?p=d-2)) for the [taxable year](/usc/26/7701.md?p=a-23) in an amount which exceeds the lesser of—
    - (A) 5 percent of the tax required to be shown on the return for the [taxable year](/usc/26/7701.md?p=a-23), or
    - (B) $100,000,

    then such [person](/usc/26/7701.md?p=a-1) shall pay a penalty in the amount determined under [subsection (b)](#b).

- (b) **Amount of penalty—** The amount of the penalty imposed under [subsection (a)](#a) on any [person](/usc/26/7701.md?p=a-1) with respect to a certification shall be equal to the greater of—
  - (1) 10 percent of the amount of the [underpayment](/usc/26/6664.md?p=a) (as defined in [section 6664(a)](/usc/26/6664.md?p=a)) solely attributable to the inaccuracy or falsity described in [subsection (a)(2)](#a-2), or
  - (2) $5,000.
- (c) **Exception—** No penalty shall be imposed under [subsection (a)](#a) if the [person](/usc/26/7701.md?p=a-1) establishes to the satisfaction of the [Secretary](/usc/26/7701.md?p=a-11-B) that any inaccuracy or falsity described in [subsection (a)(2)](#a-2) is due to a reasonable cause and not willful neglect.
- (d) **Definitions—** Any term used in this section which is also used in [section 7701(a)(52)](/usc/26/7701.md?p=a-52) shall have the meaning given such term in such section.

## Source credit

(Added Pub. L. 119–21, title VII, § 70512(k)(1), July 4, 2025, 139 Stat. 268.)

## Notes

### Statutory Notes and Related Subsidiaries

### Effective Date

Section applicable to certifications provided after Dec. 31, 2025, see section 70512(l)(3) of Pub. L. 119–21, set out in an Effective Date of 2025 Amendment note under section 45 of this title.