In addition to the penalty imposed by section 7203 (relating to willful failure to file return, supply information, or pay tax), if any S corporation required to file a return under section 6037 for any taxable year—

(1) fails to file such return at the time prescribed therefor (determined with regard to any extension of time for filing), or

(2) files a return which fails to show the information required under section 6037,

For purposes of subsection (a), the amount determined under this subsection for any month is the product of—

(1) $195, multiplied by

(2) the number of persons who were shareholders in the S corporation during any part of the taxable year.

The penalty imposed by subsection (a) shall be assessed against the S corporation.

Subchapter B of chapter 63 (relating to deficiency procedures for income, estate, gift, and certain excise taxes) shall not apply in respect of the assessment or collection of any penalty imposed by subsection (a).

In the case of any return required to be filed in a calendar year beginning after 2014, the $195 dollar amount under subsection (b)(1) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof.

(1) In general In the case of any return required to be filed in a calendar year beginning after 2014, the $195 dollar amount under subsection (b)(1) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2013” for “calendar year 2016” in subparagraph (A)(ii) thereof.

(2) Rounding If any amount adjusted under paragraph (1) is not a multiple of $5, such amount shall be rounded to the next lowest multiple of $5.

(Added Pub. L. 110–142, § 9(a), Dec. 20, 2007, 121 Stat. 1807; amended Pub. L. 110–458, title I, § 128(a), Dec. 23, 2008, 122 Stat. 5116; Pub. L. 111–92, § 16(a), Nov. 6, 2009, 123 Stat. 2996; Pub. L. 113–295, div. B, title II, § 208(e), Dec. 19, 2014, 128 Stat. 4073; Pub. L. 115–97, title I, § 11002(d)(1)(OO), Dec. 22, 2017, 131 Stat. 2061; Pub. L. 115–141, div. U, title IV, § 401(a)(299)(E), Mar. 23, 2018, 132 Stat. 1198.)