News

06Jun
2016

New Penalties for Failing to Timely File Information Returns

If you fail to file a correct information return (1099, 1098, W2-G to name a few)  by the due date and you cannot show reasonable cause, you may be subject to a penalty.  The penalty applies if you:

– Fail to file timely

-Fail to include all information required to be shown on a return

-Include incorrect information on a return

-File on paper when you were required to file electronically

-Report an incorrect TIN

-Fail to report a TIN

-Fail to file paper forms that are machine readable

The amount of penalty is based on when you file the correct information return.  The penalty is as follows:

-$50 per information return if you correctly file within 30 days (by March 30 if due date is February 28 *see calendar showing 1099-MISC with box 7 information now due January 31, 2017); maximum penalty $532,000 per year ($186,000 for small businesses)

-$100 per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $1,596,000 per year ($532,000 for small businesses)

-$260 per information return if you file after August 1 or you do not file required information returns; maximum penalty $3,193,000 per year ($1,064,000 for small businesses)

For further information, including exceptions to the penalty, please see General Instructions for Certain Information Returns at irs.gov.