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:

Public Documents > IRS Penalty Increases > image2016-10-6 15:25:45.png 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!

Public Documents > IRS Penalty Increases > image2016-10-6 15:25:50.png 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.

Public Documents > IRS Penalty Increases > image2016-10-6 15:25:55.png 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).

Source: IRS Publication 1586 - Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs

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

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