Penalties for Failure to File 1099s

by Joy Johnson on July 6, 2015

Part of one of the new trade bills the President signed into law has, as an “offset” – or a way of paying the bill for the legislation.  This is how they write laws – or, rather, changes to them – and you can see exactly how much these penalties have increased.  The bottom line is this:  The IRS is cracking down on 1099s so you’ll need to do them, right, on time, every time, or face the IRS fiddlers.

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SEC. 806. PENALTY FOR FAILURE TO FILE CORRECT INFORMATION RETURNS AND PROVIDE PAYEE STATEMENTS.

(a) In General.—Section 6721(a)(1) of the Internal Revenue Code of 1986 is amended—

(1) by striking “$100” and inserting “$250”; and

(2) by striking “$1,500,000” and inserting “$3,000,000”.

(b) Reduction Where Correction In Specified Period.—

(1) CORRECTION WITHIN 30 DAYS.—Section 6721(b)(1) of such Code is amended—

(A) by striking “$30” and inserting “$50”;

(B) by striking “$100” and inserting “$250”; and

(C) by striking “$250,000” and inserting “$500,000”.

(2) FAILURES CORRECTED ON OR BEFORE AUGUST 1.—Section 6721(b)(2) of such Code is amended—

(A) by striking “$60” and inserting “$100”;

(B) by striking “$100” (prior to amendment by subparagraph (A)) and inserting “$250”; and

(C) by striking “$500,000” and inserting “$1,500,000”.

(c) Lower Limitation For Persons With Gross Receipts Of Not More Than $5,000,000.—Section 6721(d)(1) of such Code is amended—

(1) in subparagraph (A)—

(A) by striking “$500,000” and inserting “$1,000,000”; and

(B) by striking “$1,500,000” and inserting “$3,000,000”;

(2) in subparagraph (B)—

(A) by striking “$75,000” and inserting “$175,000”; and

(B) by striking “$250,000” and inserting “$500,000”; and

(3) in subparagraph (C)—

(A) by striking “$200,000” and inserting “$500,000”; and

(B) by striking “$500,000” (prior to amendment by subparagraph (A)) and inserting “$1,500,000”.

(d) Penalty In Case Of Intentional Disregard.—Section 6721(e) of such Code is amended—

(1) by striking “$250” in paragraph (2) and inserting “$500”; and

(2) by striking “$1,500,000” in paragraph (3)(A) and inserting “$3,000,000”.

(e) Failure To Furnish Correct Payee Statements.—

(1) IN GENERAL.—Section 6722(a)(1) of such Code is amended—

(A) by striking “$100” and inserting “$250”; and

(B) by striking “$1,500,000” and inserting “$3,000,000”.

(2) REDUCTION WHERE CORRECTION IN SPECIFIED PERIOD.—

(A) CORRECTION WITHIN 30 DAYS.—Section 6722(b)(1) of such Code is amended—

(i) by striking “$30” and inserting “$50”;

(ii) by striking “$100” and inserting “$250”; and

(iii) by striking “$250,000” and inserting “$500,000”.

(B) FAILURES CORRECTED ON OR BEFORE AUGUST 1.—Section 6722(b)(2) of such Code is amended—

(i) by striking “$60” and inserting “$100”;

(ii) by striking “$100” (prior to amendment by clause (i)) and inserting “$250”; and

(iii) by striking “$500,000” and inserting “$1,500,000”.

(3) LOWER LIMITATION FOR PERSONS WITH GROSS RECEIPTS OF NOT MORE THAN $5,000,000.—Section 6722(d)(1) of such Code is amended—

(A) in subparagraph (A)—

(i) by striking “$500,000” and inserting “$1,000,000”; and

(ii) by striking “$1,500,000” and inserting “$3,000,000”;

(B) in subparagraph (B)—

(i) by striking “$75,000” and inserting “$175,000”; and

(ii) by striking “$250,000” and inserting “$500,000”; and

(C) in subparagraph (C)—

(i) by striking “$200,000” and inserting “$500,000”; and

(ii) by striking “$500,000” (prior to amendment by subparagraph (A)) and inserting “$1,500,000”.

(4) PENALTY IN CASE OF INTENTIONAL DISREGARD.—Section 6722(e) of such Code is amended—

(A) by striking “$250” in paragraph (2) and inserting “$500”; and

(B) by striking “$1,500,000” in paragraph (3)(A) and inserting “$3,000,000”.

(f) Effective Date.—The amendments made by this section shall apply with respect to returns and statements required to be filed after December 31, 2015.

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You can find the entire Bill here:  https://www.congress.gov/bill/114th-congress/house-bill/1295/text#toc-HEE69B51CC87340E2B2AB6A4FA73D2A82

 


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