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IRS INCREASES PENALTIES…AGAIN!

Filers risk significant IRS penalties for failure to comply with 1099/W-2 reporting requirements. Per Internal Revenue Code (IRC) Sections 6721 & 6722, filer responsibilities include: 

  • Furnishing (mailing) Recipient forms by the deadline
  • Filing forms by the deadline, and 
  • Reporting correct information.

In addition, filers are responsible for:

  • Filing electronically (eFiling), as required, and
  • Reporting correct Recipient Name/TIN data.

IRC's 6721 & 6722 penalties apply to most 1099, 1098, 392X, W-2G & W-2 forms. 

Annual IRS Penalty Increases

Filers can receive a penalty of up to $560 per record, up to a $3,426,000+ maximum  if 1099 or W-2 returns are furnished &/or filed after the IRS's deadline. There is no maximum penalty for intentional disregard of reporting requirements. The IRS annually indexes penalties for inflation.

Deadline*

Penalty

TY 2020
Small Business Max.
<$5 million

TY 2020
Large Business Max.
>$5 Million

TY 2021
Small Business Max.
<$5 million

TY 2021
Large Business Max.
>$5 Million

January 31N/AN/AN/AN/AN/A
< 30 days late$50 / return$197,500$565,000$199,500$571.000
31 days late thru 8/1$110 / return$565,000$1,696,000$571,000$1,713,000
After 8/1$280 / return$1,130,500$3,392,000$1,142,000$3,426,000
Intentional Disregard$560 / returnNo LimitNo LimitNo LimitNo Limit

* Forms 1099-NEC and W-2 must be furnished (mailed) and filed by January 31st. Most other informational returns must be furnished (mailed) by January 31st and eFiled by March 31st, see Tax Year 2020 Deadlines.

Be Smart - Avoid Penalties!

1099 Pro, Inc. encourages filers to educate themselves about their reporting obligations and take steps to limit their penalty exposure. 

 Create a Bulk TIN Match Service Bureau appointment today. Stay ahead of IRS penalties by verifying and updating Recipient Name/TIN combinations before filing with the IRS!

 Schedule a Service Bureau Print/Mail/eFile appointment. Call (888) 776-1099 or email SB@1099pro.com to contact the Service Bureau today.

 Use TINCheck to validate all new vendor accounts, in real-time, while they are being entered! For greater compliance, use TINCheck’s EIN lookup feature and/or the OFAC, DMF, and other lists via the online portal or via the API. Contact TINCheck at (866) 452-3467 today!

 Review 1099 Pro's CP2100 972CF Informational Brochure for comprehensive information on IRS notices, name control, and a useful TIN Management Checklist.

Sources:


All information provided is believed to be accurate but not guaranteed.
All information is subject to change.

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