PUBLIC LAW 100-647—NOV. 10, 1988
102 STAT. 3617
"(2) NONCOMPLIANCE PERIOD.—For purposes of this section, the term 'noncompliance period' means, with respect to any failure, the period— "(A) b e ^ n i n g on the date such failure first occurs, and "(B) ending on the earlier of— "(i) the date such failure is corrected, or "(ii) the date which is 6 months after the last day in the period applicable to the qualified beneficiary under subsection (0(2)(B) (determined without regard to clause (iii) thereof). If a person is liable for tax under subsection (e)(l)(B) by reason of subsection (e)(2)(B) with respect to any failure, the noncompliance period for such person with respect to such failure shall not begin before the 45th day after the written request described in subsection (e)(2)(B) is provided to such person. "(3) MINIMUM TAX FOR NONCOMPUANCE PERIOD WHERE FAIL-
URE DISCOVERED AFTER NOTICE OF EXAMINATION.—Notwithstanding paragraphs (1) and (2) of subsection (c)— "(A) IN GENERAL.—In the case of 1 or more failures with respect to a qualified beneficiary— "(i) which are not corrected before the date a notice of examination of income tax liability is sent to the employer, and "(ii) which occurred or continued during the period under examination, the amount of tax imposed by subsection (a) by reason of such failures with respect to such beneficiary shall not be less than the lesser of $2,500 or the amount of tax which would be imposed by subsection (a) without regard to such paragraphs. "(B) HIGHER MINIMUM TAX WHERE VIOLATIONS ARE MORE
THAN DE MINIMIS.—To the extent violations by the employer (or the plan in the case of a multiemployer plan) for any year are more than de minimis, subparagraph (A) shall be applied by substituting '$15,000' for '$2,500' with respect to the employer (or such plan).
- (c) LIMITATIONS ON AMOUNT OF TAX.—
"(1) TAX NOT TO APPLY WHERE FAILURE NOT DISCOVERED
EXERCISING REASONABLE DILIGENCE.—No tax shall be imposed by subsection (a) on any failure during any period for which it is established to the satisfaction of the Secretary that none of the persons referred to in subsection (e) knew, or exercising reasonable diligence would have known, that such failure existed. "(2) TAX NOT TO APPLY TO FAILURES CORRECTED WITHIN 30
DAYS.—No tax shall be imposed by subsection (a) on any failure if— "(A) such failure was due to reasonable cause and not to willful neglect, and "(B) such failure is corrected during the 30-day period beginning on the 1st date any of the persons referred to in subsection (e) knew, or exercising reasonable diligence would have known, that such failure existed. "(3) $100 UMrr ON AMOUNT OF TAX FOR FAILURES ON ANY DAY WITH RESPECT TO A QUALIFIED BENEFICIARY.—
"(A) IN GENERAL.—Except as provided in subparagraph (B), the maximum amount of tax imposed by sul^ection (a)
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