Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 68-96

1968-1 C.B. 566

Sec. 6658

Sec. 6851

Full Text

Rev. Rul. 68-96

Section 6658 of the Internal Revenue Code of 1954 provides that if a taxpayer violates or attempts to violate section 6851 of the Code, there shall be added as part of the tax 25 percent of the tax or deficiency in the tax.

Section 6851 provides, in part, that in the case of a taxpayer who designs quickly to depart from the United States or otherwise to avoid payment of tax for the preceding or the current taxable year, the Secretary or his delegate shall, upon satisfactory evidence, declare the taxable period for such taxpayer immediately terminated.

Assertion of a penalty under section 6658 of the Code is not automatic upon termination of a taxpayer's taxable period under section 6851. Such a termination of a taxable period does not per se constitute a finding that a taxpayer has violated or attempted to violate section 6851. The penalty is, therefore, to be added to the tax only in those cases where the taxpayer performs, or attempts to perform, any act tending to prejudice or to render wholly or partly ineffectual proceedings to collect income tax made due and payable by virtue of section 6851.