FAILURE TO MAKE TIMELY PAYMENT OR DEPOSIT OF TAX.

SEC. 943. FAILURE TO MAKE TIMELY PAYMENT OR DEPOSIT OF TAX. (a) Failure To Pay Tax.—Section 6651 (relating to failure to file tax return) is amended to read as follows: “SEC. 6651. FAILURE TO FILE TAX RETURN OR TO PAY TAX. “(a) Addition to the Tax.—In case of failure— “(1) to file any return required under authority of subchapter A of chapter 61 (other than part III thereof), subchapter A of chapter 51 (relating to distilled spirits, wines, and beer), or of subchapter A of chapter 52 (relating to tobacco, cigars, cigarettes, and cigarette papers and tubes), or of subchapter A of chapter 53 (relating to machine guns and certain other firearms), on the date prescribed therefor (determined with regard to any extension of time for filing), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount required to be shown as tax on such return 5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate; “(2) To pay the amount shown as tax on any return specified in paragraph (1) on or before the date prescribed for payment of such tax (determined with regard to any extension of time for payment), unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount shown as tax on such return 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate; or “(3) to pay any amount in respect of any tax required to be shown on a return specified in paragraph (1) which is not so shown (including an assessment made pursuant to section 6213(b)) within 10 days of the date of the notice and demand therefor, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be added to the amount of tax stated in such notice and demand 0.5 percent of the amount of such tax if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which such failure continues, not exceeding 25 percent in the aggregate. “(b) Penalty Imposed on Net Amount Due.—For purposes of— “(1) subsection (a)(1), the amount of tax required to be shown on the return shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed on the return, “(2) subsection (a)(2), the amount of tax shown on the return shall, for purposes of computing the addition for any month, be 83 Stat. 728 reduced by the amount of any part of the tax which is paid on or before the beginning of such month and by the amount of any credit against the tax which may be claimed on the return, and “(3) subsection (a)(3), the amount of tax stated in the notice and demand shall, for the purpose of computing the addition for any month, be reduced by the amount of any part of the tax which is paid before the beginning of such month. “(c) Limitations and Special Rule.— “(1) Additions under more than one paragraph.— “(A) With respect to any return, the amount of the addition under paragraph (1) of subsection (a) shall be reduced by the amount of the addition under paragraph (2) of subsection (a) for any month to which an addition to tax applies under both paragraphs (1) and (2). “(B) With respect to any return, the maximum amount of the addition permitted under paragraph (3) of subsection (a) shall be reduced by the amount of the addition under paragraph (1) of subsection (a) which is attributable to the tax for which the notice and demand is made and which is not paid within 10 days of notice and demand. “(2) Amount of tax shown more than amount required to be shown.—If the amount required to be shown as tax on a return is less than the amount shown as tax on such return, subsections (a)(2) and (b)(2) shall be applied by substituting such lower amount. “(d) Exception for Declarations of Estimated Tax.—This section shall not apply to any failure to file a declaration of estimated tax required by section 6015 or to pay any estimated tax required to be paid by section 6153 or 6154.” (b) Failure To Make Deposit of Tax.—Section 6656(a) (relating to penalty for failure to make deposit of taxes) is amended by striking out the first sentence and inserting in lieu thereof the following: “In case of failure by any person required by this title or by regulation of the Secretary or his delegate under this title to deposit on the date prescribed therefor any amount of tax imposed by this title in such government depositary as is authorized under section 6302(c) to receive such deposit, unless it is shown that such failure is due to reasonable cause and not due to willful neglect, there shall be imposed upon such person a penalty of 5 percent of the amount of the underpayment.” (c) Conforming Amendments.— (1) Section 3121(k)(1)(F)(i) (relating to definitions of waiver of exemption by religious, charitable, and certain other organizations) is amended by inserting “or pay tax” after “tax return”. (2) Section 3121(k)(1)(G)(i) (relating to definitions of waiver of exemption by religious, charitable, and certain other organizations) is amended by inserting “or pay tax” after “tax return”. (3) Section 3121(k)(1)(H)(i) (relating to definitions of waivers of exemption by religious, charitable, and certain other organizations) is amended by inserting “or pay tax” after “tax return”. (4) Section 5684(d)(2) (relating to cross references for penalties relating to the payment and collection of liquor taxes) is amended by inserting “or pay tax” after “tax return”. 83 Stat. 729 (5) The table of sections for subchapter A of chapter 68 is amended by striking out: “Sec. 6651. Failure to file tax return.” and inserting in lieu thereof: “Sec. 6651. Failure to file tax return or pay tax.” (6) Section 6653(d) (relating to penalty for failure to pay tax if fraud assessed) is amended by adding “or pay tax” after “such return”. (d) Effective Dates.—The amendments made by subsections (a) and (c) shall apply with respect to returns the date prescribed by law (without regard to any extension of time) for filing of which is after December 31, 1969, and with respect to notices and demands for payment of tax made after December 31, 1969. The amendment made by subsection (b) shall apply with respect to deposits the time for making of which is after December 31, 1969.