# 26 U.S.C. § 6721: Failure to file correct information returns

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s6721>. Cite pinpoints as 26 U.S.C. § 6721(a)(1).

## § 6721(a) Imposition of penalty

**§ 6721(a)(1) In general.** In the case of a failure described in paragraph (2) by any person with respect to an information return, such person shall pay a penalty of $250 for each return with respect to which such a failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $3,000,000.

**§ 6721(a)(2) Failures subject to penalty.** For purposes of paragraph (1), the failures described in this paragraph are—

**§ 6721(a)(2)(A)** any failure to file an information return with the Secretary on or before the required filing date, and

**§ 6721(a)(2)(B)** any failure to include all of the information required to be shown on the return or the inclusion of incorrect information.

## § 6721(b) Reduction where correction in specified period

**§ 6721(b)(1) Correction within 30 days.** If any failure described in subsection (a)(2) is corrected on or before the day 30 days after the required filing date—

**§ 6721(b)(1)(A)** the penalty imposed by subsection (a) shall be $50 in lieu of $250, and

**§ 6721(b)(1)(B)** the total amount imposed on the person for all such failures during any calendar year which are so corrected shall not exceed $500,000.

**§ 6721(b)(2) Failures corrected on or before August 1.** If any failure described in subsection (a)(2) is corrected after the 30th day referred to in paragraph (1) but on or before August 1 of the calendar year in which the required filing date occurs—

**§ 6721(b)(2)(A)** the penalty imposed by subsection (a) shall be $100 in lieu of $250, and

**§ 6721(b)(2)(B)** the total amount imposed on the person for all such failures during the calendar year which are so corrected shall not exceed $1,500,000.

## § 6721(c) Exceptions for certain de minimis failures

**§ 6721(c)(1) Exception for de minimis failure to include all required information.** If—

**§ 6721(c)(1)(A)** an information return is filed with the Secretary,

**§ 6721(c)(1)(B)** there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such return, and

**§ 6721(c)(1)(C)** such failure is corrected on or before August 1 of the calendar year in which the required filing date occurs,

for purposes of this section, such return shall be treated as having been filed with all of the correct required information.

**§ 6721(c)(2) Limitation.** The number of information returns to which paragraph (1) applies for any calendar year shall not exceed the greater of—

**§ 6721(c)(2)(A)** 10, or

**§ 6721(c)(2)(B)** one-half of 1 percent of the total number of information returns required to be filed by the person during the calendar year.

**§ 6721(c)(3) Safe harbor for certain de minimis errors.**

**§ 6721(c)(3)(A) In general.** If, with respect to an information return filed with the Secretary—

**§ 6721(c)(3)(A)(i)** there are 1 or more failures described in subsection (a)(2)(B) relating to an incorrect dollar amount,

**§ 6721(c)(3)(A)(ii)** no single amount in error differs from the correct amount by more than $100, and

**§ 6721(c)(3)(A)(iii)** no single amount reported for tax withheld on the information return differs from the correct amount by more than $25,

then no correction shall be required and, for purposes of this section, such return shall be treated as having been filed with all of the correct required information.

**§ 6721(c)(3)(B) Exception.** Subparagraph (A) shall not apply with respect to any incorrect dollar amount to the extent that such error relates to an amount with respect to which an election is made under section 6722(c)(3)(B).

**§ 6721(c)(3)(C) Regulatory authority.** The Secretary may issue regulations to prevent the abuse of the safe harbor under this paragraph, including regulations providing that this paragraph shall not apply to the extent necessary to prevent any such abuse.

## § 6721(d) Lower limitations for persons with gross receipts of not more than $5,000,000

**§ 6721(d)(1) In general.** If any person meets the gross receipts test of paragraph (2) with respect to any calendar year, with respect to failures during such calendar year—

**§ 6721(d)(1)(A)** subsection (a)(1) shall be applied by substituting “$1,000,000” for “$3,000,000”,

**§ 6721(d)(1)(B)** subsection (b)(1)(B) shall be applied by substituting “$175,000” for “$500,000”, and

**§ 6721(d)(1)(C)** subsection (b)(2)(B) shall be applied by substituting “$500,000” for “$1,500,000”.

**§ 6721(d)(2) Gross receipts test.**

**§ 6721(d)(2)(A) In general.** A person meets the gross receipts test of this paragraph for any calendar year if the average annual gross receipts of such person for the most recent 3 taxable years ending before such calendar year do not exceed $5,000,000.

**§ 6721(d)(2)(B) Certain rules made applicable.** For purposes of subparagraph (A), the rules of paragraphs (2) and (3) of section 448(c) shall apply.

## § 6721(e) Penalty in case of intentional disregard

If 1 or more failures described in subsection (a)(2) are due to intentional disregard of the filing requirement (or the correct information reporting requirement), then, with respect to each such failure—

**§ 6721(e)(1)** subsections (b), (c), and (d) shall not apply,

**§ 6721(e)(2)** the penalty imposed under subsection (a) shall be $500, or, if greater—

**§ 6721(e)(2)(A)** in the case of a return other than a return required under section 6045(a), 6041A(b), 6050H, 6050I, 6050J, 6050K, or 6050L, 10 percent of the aggregate amount of the items required to be reported correctly,

**§ 6721(e)(2)(B)** in the case of a return required to be filed by section 6045(a), 6050K, or 6050L, 5 percent of the aggregate amount of the items required to be reported correctly,

**§ 6721(e)(2)(C)** in the case of a return required to be filed under section 6050I(a) with respect to any transaction (or related transactions), the greater of—

**§ 6721(e)(2)(C)(i)** $25,000, or

**§ 6721(e)(2)(C)(ii)** the amount of cash (within the meaning of section 6050I(d)) received in such transaction (or related transactions) to the extent the amount of such cash does not exceed $100,000, or

**§ 6721(e)(2)(D)** in the case of a return required to be filed under section 6050V, 10 percent of the value of the benefit of any contract with respect to which information is required to be included on the return, and

**§ 6721(e)(3)** in the case of any penalty determined under paragraph (2)—

**§ 6721(e)(3)(A)** the $3,000,000 limitation under subsection (a) shall not apply, and

**§ 6721(e)(3)(B)** such penalty shall not be taken into account in applying such limitation (or any similar limitation under subsection (b)) to penalties not determined under paragraph (2).

## § 6721(f) Adjustment for inflation

**§ 6721(f)(1) In general.** In the case of any failure relating to a return required to be filed in a calendar year beginning after 2014, each of the dollar amounts under subsections (a), (b), (d) (other than paragraph (2)(A) thereof), and (e) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2011” for “calendar year 2016” in subparagraph (A)(ii) thereof.

**§ 6721(f)(2) Rounding.** If any amount adjusted under paragraph (1)—

**§ 6721(f)(2)(A)** is not less than $75,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and

**§ 6721(f)(2)(B)** is not described in subparagraph (A) and is not a multiple of $10, such amount shall be rounded to the next lowest multiple of $10.

## Regulations

- [Treas. Reg. § 301.6721-0](/26/reg/301.6721-0.md): Table of Contents. (interprets § 6721)
- [Treas. Reg. § 301.6721-1](/26/reg/301.6721-1.md): Failure to file correct information returns. (interprets § 6721)

## Forms named in the regulations

- [Form 1099-INT](https://www.irs.gov/pub/irs-pdf/f1099int.pdf)
- [Form 8300](https://www.irs.gov/pub/irs-pdf/f8300.pdf)
- [Form 1099-B](https://www.irs.gov/pub/irs-pdf/f1099b.pdf)
- [Form 1099-DIV](https://www.irs.gov/pub/irs-pdf/f1099div.pdf)

## Final rules

- [91 FR 57214](https://www.federalregister.gov/documents/2026/09/08/2026-18219/car-loan-interest-deduction) (2026): Car Loan Interest Deduction
- [89 FR 76356](https://www.federalregister.gov/documents/2024/09/17/2024-20429/consistent-basis-reporting-between-estate-and-person-acquiring-property-from-decedent) (2024): Consistent Basis Reporting Between Estate and Person Acquiring Property From Decedent
- [89 FR 56480](https://www.federalregister.gov/documents/2024/07/09/2024-14004/gross-proceeds-and-basis-reporting-by-brokers-and-determination-of-amount-realized-and-basis-for) (2024): Gross Proceeds and Basis Reporting by Brokers and Determination of Amount Realized and Basis for Digital Asset Transactions
- [89 FR 5768](https://www.federalregister.gov/documents/2024/01/30/2024-01924/procedure-and-administration) (2024): Procedure and Administration
- [88 FR 87696](https://www.federalregister.gov/documents/2023/12/19/2023-27283/de-minimis-error-safe-harbor-exceptions-to-penalties-for-failure-to-file-correct-information-returns) (2023): De Minimis Error Safe Harbor Exceptions to Penalties for Failure To File Correct Information Returns or Furnish Correct Payee Statements
- [88 FR 11754](https://www.federalregister.gov/documents/2023/02/23/2023-03710/electronic-filing-requirements-for-specified-returns-and-other-documents) (2023): Electronic-Filing Requirements for Specified Returns and Other Documents
- [79 FR 13220](https://www.federalregister.gov/documents/2014/03/10/2014-05051/information-reporting-of-minimum-essential-coverage) (2014): Information Reporting of Minimum Essential Coverage
- [75 FR 64072](https://www.federalregister.gov/documents/2010/10/18/2010-25504/basis-reporting-by-securities-brokers-and-basis-determination-for-stock) (2010): Basis Reporting by Securities Brokers and Basis Determination for Stock
- [75 FR 49821](https://www.federalregister.gov/documents/2010/08/16/2010-20200/information-reporting-for-payments-made-in-settlement-of-payment-card-and-third-party-network) (2010): Information Reporting for Payments Made in Settlement of Payment Card and Third Party Network Transactions
- [70 FR 28702](https://www.federalregister.gov/documents/2005/05/18/05-9424/section-1446-regulations-withholding-on-effectively-connected-taxable-income-allocable-to-foreign) (2005): Section 1446 Regulations; Withholding on Effectively-Connected Taxable Income Allocable to Foreign Partners
- [68 FR 22594](https://www.federalregister.gov/documents/2003/04/29/03-10403/receipt-of-multiple-notices-with-respect-to-incorrect-taxpayer-identification-numbers) (2003): Receipt of Multiple Notices With Respect to Incorrect Taxpayer Identification Numbers
- [64 FR 61502](https://www.federalregister.gov/documents/1999/11/12/99-29087/partnership-returns-required-on-magnetic-media) (1999): Partnership Returns Required on Magnetic Media
- [62 FR 53387](https://www.federalregister.gov/documents/1997/10/14/97-25998/general-revision-of-regulations-relating-to-withholding-of-tax-on-certain-us-source-income-paid-to) (1997): General Revision of Regulations Relating to Withholding of Tax on Certain U.S. Source Income Paid to Foreign Persons and Related Collection, Refunds, and Credits; Revision of Information Reporting and Backup Withholding Regulations; and Removal of Regulations Under Part 35a and of Certain Regulations Under Income Tax Treaties

## Leading cases

- [Gerald B. Lefcourt, P.C. v. United States, 125 F.3d 79 (2d Cir. 1997)](https://www.courtlistener.com/opinion/746429/gerald-b-lefcourt-pc-v-united-states/)
- [Bickham Lincoln-Mercury Incorporated v. United States, 168 F.3d 790 (5th Cir. 1999)](https://www.courtlistener.com/opinion/762041/bickham-lincoln-mercury-incorporated-v-united-states/)

## Connections

Cites: § 1 Tax imposed; § 448 Limitation on use of cash method of accounting; § 6045 Returns of brokers; § 6050I Returns relating to cash received in trade or business, etc.; § 6050V Returns relating to applicable insurance contracts in which certain exempt organizations hold interests; § 6722 Failure to furnish correct payee statements; § 6724 Waiver; definitions and special rules

Cited by: § 1060 Special allocation rules for certain asset acquisitions; § 6045 Returns of brokers; § 6722 Failure to furnish correct payee statements; § 6724 Waiver; definitions and special rules

## Amendments

- 1986-10-22: [Pub. L. 99-514](/26/act/99-514.md), 100 Stat. 2732
- 1988-11-18: [Pub. L. 100-690](/26/act/100-690.md), 102 Stat. 4503
- 1989-12-19: [Pub. L. 101-239](/26/act/101-239.md), 103 Stat. 2388
- 1990-11-05: [Pub. L. 101-508](/26/act/101-508.md), 104 Stat. 1388
- 2006-08-17: [Pub. L. 109-280](/26/act/109-280.md), 120 Stat. 1073
- 2010-09-27: [Pub. L. 111-240](/26/act/111-240.md), 124 Stat. 2561
- 2014-12-19: [Pub. L. 113-295](/26/act/113-295.md), 128 Stat. 4074
- 2015-06-29: [Pub. L. 114-27](/26/act/114-27.md), 129 Stat. 416
- 2015-12-18: [Pub. L. 114-113](/26/act/114-113.md), 129 Stat. 3076
- 2017-12-22: [Pub. L. 115-97](/26/act/115-97.md), 131 Stat. 2061
- 2018-03-23: [Pub. L. 115-141](/26/act/115-141.md), 132 Stat. 1161