Tax Tip Tuesday: Tax Law Change
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.
Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.