(a) In general. Section 207 of the Revenue Act of 1971 provides that, in the case of individuals, the penalty prescribed by section 6654(a) and Sec. 1.6654-1 for underpayment of estimated tax shall not apply in certain cases to taxable years beginning after December 31, 1970, and ending before January 1, 1972. The penalty shall be waived only if the taxpayer meets one of the gross income requirements contained in paragraph (b) of this section and if the limitation contained in paragraph (c) of this section is not applicable.
(b) Gross income requirement. Except as provided in paragraph (c) of this section, the waiver provided in paragraph (a) of this section shall be applicable only:
(1) If the gross income for the taxable year does not exceed $10,000 in the case of:
(i) A single individual who is neither a head of a household (as defined in section 2(b)) nor a surviving spouse (as defined in section 2(a)), or
(ii) A married individual not entitled under section 6013 to file a joint return for the taxable year, or
(2) If the gross income for the taxable year does not exceed $20,000 in the case of:
(i) A head of a household (as defined in section 2(b)) or
(ii) A surviving spouse (as defined in section 2(a)), or
(3) If the aggregate gross income for the taxable year does not exceed $20,000 in the case of a married individual (entitled under section 6013 to file a joint return for the taxable year) and his spouse.
(c) Limitation. Notwithstanding any other provision of this section, the waiver provided in paragraph (a) of this section shall not be applicable if, in the taxable year, the taxpayer has income from sources other than wages (as defined in section 3401(a)) in excess of $200 ($400 in the case of a husband and wife entitled to file a joint return for the taxable year under section 6013). Thus, for example, even if the aggregate gross income of a husband and wife (entitled under section 6013 to file a joint return for the taxable year) does not exceed $20,000, the waiver of the penalty for underpayment of estimated tax shall not apply if the husband and wife have, in the aggregate, income from sources other than wages in excess of $400. [T.D. 7282, 38 FR 19028, July 17, 1973]