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INCREASED IRS PENALTIES…AGAIN!
IRS Increases Penalties for Tax Year 2018 Information Returns (1099 / W-2)
Filers can receive up to a $530 per record penalty, or a $3+ million maximum penalty, if delivering 1099/W-2 statements & filing past the IRS published deadlines. How can that be? Intentional disregard for furnishing or filing information returns is a $530/return penalty. Otherwise, filers can receive up to a $270 per record penalty for the late delivery of a statement and then another $270 per record penalty for filing late. Then, just for fun, the IRS indexes the penalty for inflation! For Example:
- Failure to Furnish Correct Payee Statements: $50 / $100 / $270 per payee statement depending on when you furnish the correct information returns (section 6721)
- Intentional Disregard: Any failure to provide a correct payee statement, due to intentional disregard of the requirements to furnish a correct payee statement, the penalty is at least $530 per payee statement with no maximum penalty.
- Failure to File by the Due Date: $50 per return if filed within 30 days of the deadline, $100 per return if filed by August 1st, and $270 per return if filed after August 1. Note - Jan. 31st 2017 was the new IRS filing deadline for 1099 MISC with box 7 & W-2’s (no W-2 automatic extensions will be granted)!
- Similar penalties apply for TIN/Name mismatches!
Be Smart! Avoid Penalties By:
Creating a Bulk TIN Matching Service Bureau appointment today. Stay ahead of IRS penalties by verifying & updating your TIN/Name combinations before filing with the IRS!
Schedule a Service Bureau print/mail/eFile appointment ahead of time! Don’t wait until the last minute, call (888) 776-1099 to schedule your January Service Bureau appointment for printing, mailing, and/or eFiling 1099 & W-2 returns.
Use TINCheck to validate all new vendor accounts, in real-time, while they are being entered! Want more compliance? Use TINCheck’s EIN lookup feature and/or the OFAC, DMF, and other lists via the online portal or via the API. Call TINCheck at (866) 452-3467 with any questions!
Complete Penalty Listings:
Printing & Mailing - Section 6722: Failure to Furnish Correct Payee Statements
| Deadline | Penalty | Small Bus. (<$5M) | Large Bus. Max (>$5M) |
|---|---|---|---|
| January 31 | N/A | N/A | N/A |
| < 30 days late | $50/return | $191,000 | $547,000 |
| 31 days late thru 8/1 | $100/return | $547,000 | $1,641,000 |
| After 8/1 | $270/return | $1,094,000 | $3,282,500 |
| Intentional Disregard | $530/return | No Limit | No Limit |
Filing - Section 6721: Failure to File Correct Statements on a Timely Basis
| Deadline | Penalty | Small Bus. (<$5M) | Large Bus. Max (>$5M) |
|---|---|---|---|
| January 31 | N/A | N/A | N/A |
| < 30 days late | $50/return | $191,000 | $547,000 |
| 31 days late thru 8/1 | $100/return | $547,000 | $1,641,000 |
| After 8/1 | $270/return | $1,094,000 | $3,282,500 |
| Intentional Disregard | $530/return | No Limit | No Limit |
Section 6721 Includes Penalties For:
- Missing TINS and Incorrect Name/TIN combinations
- Failure to E-File Correct Information Returns to the IRS
- Late 1099-MISC forms with Box 7 Amounts and/or W-2 forms that have the early filing deadline of 1/31/2018
The above are penalties for most 1099, 1098, W-2 & W-2G forms. Sections 6721 & 6722 do not apply to 1099-SA 5498-SA 5498 1099-Q 1099-QA 5498-QA 5498-ESA have slightly lower penalties. See IRC sections 6721(e)(2) & 6722(e)(2).
All information provided is believed to be accurate but not guaranteed.
All information is also subject to change.
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