of the employer. (b) Amount of tax (1) In general The amount of the tax imposed by subsection (a) on any failure with respect to an employee shall be $10 for each day in the noncompliance period with respect to such failure. (2) Noncompliance period For purposes of this section, the term noncompliance period means, with respect to any failure, the period— (A) beginning on the date such failure first occurs, and (B) ending on the earlier of— (i) the date such failure is corrected, or (ii) with respect to any employer, the date that is 3 months after the last date on which the employee is required to be eligible to participate in an automatic contribution plan maintained by such employer. (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 that such failure existed. (2) Tax not to apply to failures corrected within 9 ½ months 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 9 ½ -month period beginning on the first date any of the persons referred to in subsection (e) knew that such failure existed. (3) Overall limitation for unintentional failures In the case of failures which are due to reasonable cause and not to willful neglect— (A) General rule The tax imposed by subsection (a) for failures during the taxable year of the employer shall not exceed $500,000. (B) Taxable years in the case of certain controlled groups For purposes of this subparagraph, if not all persons who are treated as a single employer for purposes of this section have the same taxable year, the taxable years taken into account shall be determined under principles similar to the principles of section 1561. (4) Waiver by Secretary In the case of a failure