Glossary

IRC Section 6663

Section 6663 imposes the 75 percent civil fraud penalty on the portion of an underpayment attributable to fraud, which the IRS must prove by clear and convincing evidence.

How it works

Section 6663 imposes a 75 percent penalty on the portion of an underpayment attributable to fraud, which the IRS must prove by clear and convincing evidence. Once any part is shown to be fraudulent, the whole underpayment is presumed fraudulent unless the taxpayer proves otherwise. A fraudulent return has no statute of limitations.

Why it matters

The civil fraud penalty is often the companion to a criminal referral, and the same badges of fraud decide both.

Related: civil fraud penalty, badges of fraud.

Related terms

Browse the full glossary

Where this comes up in our work

Tax controversy attorneys

Audits, penalties, collections, criminal exposure, and Tax Court, handled by attorneys who do this every day.

See the practice page →

Have a question about this?

Our tax attorneys handle IRS audits, crypto tax, offshore disclosures, and opinion letters for clients nationwide. Consultations are confidential.

Schedule a Confidential Consultation

Definitions are general information, not legal advice, and may not reflect the most recent changes in law.

Get Started