---
kind: "section"
citation: "26 U.S.C. § 6701"
title: "26"
title_heading: "Internal Revenue Code"
number: "6701"
heading: "Penalties for aiding and abetting understatement of tax liability"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/6701"
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"
---

# §6701. Penalties for aiding and abetting understatement of tax liability

- (a) **Imposition of penalty—** Any [person](/usc/26/7701.md?p=a-1)—
  - (1) who aids or assists in, procures, or advises with respect to, the preparation or presentation of any portion of a return, affidavit, claim, or other document,
  - (2) who knows (or has reason to believe) that such portion will be used in connection with any material matter arising under the internal revenue laws, and
  - (3) who knows that such portion (if so used) would result in an understatement of the liability for tax of another [person](/usc/26/7701.md?p=a-1),

  shall pay a penalty with respect to each such document in the amount determined under [subsection (b)](#b).

- (b) **Amount of penalty—**
  - (1) **In general—** Except as provided in [paragraph (2)](#b-2), the amount of the penalty imposed by [subsection (a)](#a) shall be $1,000.
  - (2) **Corporations—** If the return, affidavit, claim, or other document relates to the tax liability of a [corporation](/usc/26/7701.md?p=a-3), the amount of the penalty imposed by [subsection (a)](#a) shall be $10,000.
  - (3) **Only 1 penalty per person per period—** If any [person](/usc/26/7701.md?p=a-1) is subject to a penalty under [subsection (a)](#a) with respect to any document relating to any [taxpayer](/usc/26/7701.md?p=a-14) for any taxable period (or where there is no taxable period, any taxable event), such [person](/usc/26/7701.md?p=a-1) shall not be subject to a penalty under [subsection (a)](#a) with respect to any other document relating to such [taxpayer](/usc/26/7701.md?p=a-14) for such taxable period (or event).
- (c) **Activities of subordinates—**
  - (1) **In general—** For purposes of [subsection (a)](#a), the term “procures” [includes](/usc/26/7701.md?p=c)—
    - (A) ordering (or otherwise causing) a subordinate to do an act, and
    - (B) knowing of, and not attempting to prevent, participation by a subordinate in an act.
  - (2) **Subordinate—** For purposes of [paragraph (1)](#c-1), the term “subordinate” means any other [person](/usc/26/7701.md?p=a-1) (whether or not a director, officer, [employee](/usc/26/7701.md?p=a-20), or agent of the [taxpayer](/usc/26/7701.md?p=a-14) involved) over whose activities the [person](/usc/26/7701.md?p=a-1) has direction, supervision, or [control](/usc/26/7701.md?p=a-51-G).
- (d) **Taxpayer not required to have knowledge—** [Subsection (a)](#a) shall apply whether or not the understatement is with the knowledge or consent of the [persons](/usc/26/7701.md?p=a-1) authorized or required to present the return, affidavit, claim, or other document.
- (e) **Certain actions not treated as aid or assistance—** For purposes of [subsection (a)(1)](#a-1), a [person](/usc/26/7701.md?p=a-1) furnishing typing, reproducing, or other mechanical assistance with respect to a document shall not be treated as having aided or assisted in the preparation of such document by reason of such assistance.
- (f) **Penalty in addition to other penalties—**
  - (1) **In general—** Except as provided by paragraphs [(2)](#f-2) and [(3)](#f-3), the penalty imposed by this section shall be in addition to any other penalty provided by law.
  - (2) **Coordination with return preparer penalties—** No penalty shall be assessed under subsection [(a)](/usc/26/6694.md?p=a) or [(b)](/usc/26/6694.md?p=b) of section 6694 on any [person](/usc/26/7701.md?p=a-1) with respect to any document for which a penalty is assessed on such [person](/usc/26/7701.md?p=a-1) under [subsection (a)](#a).
  - (3) **Coordination with section 6700—** No penalty shall be assessed under [section 6700](/usc/26/6700.md) on any [person](/usc/26/7701.md?p=a-1) with respect to any document for which a penalty is assessed on such [person](/usc/26/7701.md?p=a-1) under [subsection (a)](#a).

## Source credit

(Added Pub. L. 97–248, title III, § 324(a), Sept. 3, 1982, 96 Stat. 615; amended Pub. L. 101–239, title VII, § 7735(a), (b), Dec. 19, 1989, 103 Stat. 2403.)

## Notes

### Editorial Notes

### Amendments

1989—Subsec. (a)(1). Pub. L. 101–239, § 7735(a)(1), struck out “in connection with any matter arising under the internal revenue laws” after “other document”.

Subsec. (a)(2). Pub. L. 101–239, § 7735(a)(2), inserted “(or has reason to believe)” after “who knows”.

Subsec. (a)(3). Pub. L. 101–239, § 7735(a)(3), substituted “would result” for “will result”.

Subsec. (f)(1). Pub. L. 101–239, § 7735(b)(2), substituted “paragraphs (2) and (3)” for “paragraph (2)”.

Subsec. (f)(3). Pub. L. 101–239, § 7735(b)(1), added par. (3).

### Statutory Notes and Related Subsidiaries

### Effective Date of 1989 Amendment

Pub. L. 101–239, title VII, § 7735(c), Dec. 19, 1989, 103 Stat. 2404, provided that: “The amendments made by this section [amending this section] shall take effect on December 31, 1989.”

### Effective Date

Pub. L. 97–248, title III, § 324(c), Sept. 3, 1982, 96 Stat. 616, provided that: “The amendments made by this section [enacting this section] shall take effect on the day after the date of the enactment of this Act [Sept. 3, 1982].”