Income Tax Updates
June 29, 2015: Form 1099 Penalties effective with returns required to be FILED after December 31, 2015 (i.e., for calendar years 2015 and later).
- The penalty under Section 6721 for not filing correct information returns increases. (Not filing a required information return is considered not filing a correct information return.)
- The penalty is $250 per return (an increase from the previous $100 per return penalty).
- If there is an unintentional delinquency and it is corrected no more than 30 days after the return due date, the penalty is reduced to $50 per return (formerly $30 per return).
- If there is an unintentional delinquency and it is corrected more than 30 days after the return due date but on or before August 1, the penalty is reduced to $100 per return (formerly $60 per return).
- The penalties above still have maximum amounts, but of course these maximums increased compared to prior years.
- The penalty for intentional disregard also increased from $250 per return to $500 per return.
- The penalty under Section 6722 for not furnishing information returns (i.e., Forms 1099) to payees increases.
- The penalty is $250 per return (an increase from the previous $100 per return penalty).
- If there is an unintentional delinquency and it is corrected no more than 30 days after the return due date, the penalty is reduced to $50 per return (formerly $30 per return).
- If there is an unintentional delinquency and it is corrected more than 30 days after the return due date but on or before August 1, the penalty is reduced to $100 per return (formerly $60 per return).
- The penalties above still have maximum amounts, but of course these maximums increased compared to prior years.
- The penalty for intentional disregard also increased from $250 per return to $500 per return.
JUST IN CASE YOU MISSED THE ABOVE DISCUSSION, the total penalties for a taxpayer who does not prepare a required Form 1099 is now $500 per Form 1099 ($250 for not sending a copy to IRS plus $250 for not giving a copy to the payee).