MODIFICATIONS TO PENALTIES FOR AIDING AND ABETTING UNDERSTATEMENT OF TAX LIABILITY.

SEC. 7735. MODIFICATIONS TO PENALTIES FOR AIDING AND ABETTING UNDERSTATEMENT OF TAX LIABILITY. (a) General Rule.—Subsection (a) of section 6701 (relating to penalties for aiding and abetting understatement of tax liability) is amended— (1) by striking “in connection with any matter arising under the internal revenue laws” in paragraph (1), (2) by striking “who knows” in paragraph (2) and inserting “who knows (or has reason to believe)”, and (3) by striking “will result” in paragraph (3) and inserting “would result”. (b) Coordination With Penalty Under Section 6700.— (1) In general.—Subsection ® of section 6701 is amended by adding at the end thereof the following new paragraph: 103 STAT. 2404 “(3) Coordination with section 6700.—No penalty shall be assessed under section 6700 on any person with respect to any document for which a penalty is assessed on such person under subsection (a).” (2) Technical amendment.—Paragraph (1) of section 6701(C) is amended by striking “paragraph (2)” and inserting “paragraphs (2) and (3)”. (c) Effective Date.—The amendments made by this section shall take effect on December 31, 1989.