A recent law change will affect the penalties that can be assessed for not filing IRS 1099 forms.
The Internal Revenue Code imposes a penalty on taxpayers that fail to file correct information returns (e.g., IRS Form 1099) with IRS, as well as a separate, but parallel, penalty on taxpayers that fail to provide the payee with a correct copy of the information return filed with IRS. The penalties are based on the duration of the delinquency, whether the delinquency was intentional, and are subject to maximum that depend on the size of the taxpayer.
The new law increases these penalties for returns and statements required to be filed after December 31, 2015. For example, when an unintentional delinquency is corrected no more than 30 days after the return due date, the Act increases the per-return penalty from $30 to $50. The maximum penalty for any calendar year, for a “small” taxpayer, from $75,000 to $175,000.
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