Amended 1989, 2010
- 2010 Pub. L. 111-240 Pub. L. 111–240 amended section generally. Prior to amendment, section related to: in subsec. (a), general rule for imposition of penalty for failure to furnish correct payee statements; in subsec. (b), failures subject to penalty; and, in subsec. (c), penalty in case of intentional disregard.
- 1989 Pub. L. 101-239 Pub. L. 101–239 substituted “correct” for “certain” in section catchline and amended text generally, substituting subsecs. (a) to (c) for former subsec. (a) stating general rule and subsec. (b) relating to failure to notify partnership of exchange of partnership interest.
Cases: Dealers Auto Auction of Southwest LLC v. Commissioner (T.C. 2025); Purser Truck Sales, Inc. v. United States, 710 F. Supp. 2d 1334 (M.D. Ga. 2008)
Forms: Form W-2; Form 1099-B; Form 1099-DIV; Form 1099-INT
Final rules 8
(a) Imposition of penalty
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(1) General rule In the case of each failure described in paragraph (2) by any person with respect to a payee statement, such person shall pay a penalty of $250 for each statement 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.
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(1), substituted “$250” for “$100” and “$3,000,000” for “$1,500,000”.
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(2) Failures subject to penalty For purposes of paragraph (1), the failures described in this paragraph are—
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(A) any failure to furnish a payee statement on or before the date prescribed therefor to the person to whom such statement is required to be furnished, and
(B) any failure to include all of the information required to be shown on a payee statement or the inclusion of incorrect information.
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(b) Reduction where correction in specified period
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(1) Correction within 30 days If any failure described in subsection (a)(2) is corrected on or before the day 30 days after the date prescribed for furnishing such statement—
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 207(a)(2), substituted “the date prescribed for furnishing such statement” for “the required filing date”.
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(A) the penalty imposed by subsection (a) shall be $50 in lieu of $250, and
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(2)(A)(i), (ii), substituted “$50” for “$30” and “$250” for “$100”.
(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.
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(2)(A)(iii), substituted “$500,000” for “$250,000”.
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(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 date prescribed for furnishing such statement occurs—
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 207(a)(2), substituted “the date prescribed for furnishing such statement” for “the required filing date”.
(A) the penalty imposed by subsection (a) shall be $100 in lieu of $250, and
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(2)(B)(i), (ii), substituted “$100” for “$60” and “$250” for “$100”.
(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.
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(2)(B)(iii), substituted “$1,500,000” for “$500,000”.
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(c) Exception for de minimis failures
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(1) In general If—
(A) a payee statement is furnished to the person to whom such statement is required to be furnished,
(B) there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such statement, and
(C) such failure is corrected on or before August 1 of the calendar year in which the date prescribed for furnishing such statement occurs,
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 207(a)(2), substituted “the date prescribed for furnishing such statement” for “the required filing date”.
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for purposes of this section, such statement shall be treated as having been furnished with all of the correct required information.
(2) Limitation The number of payee statements to which paragraph (1) applies for any calendar year shall not exceed the greater of—
(A) 10, or
(B) one-half of 1 percent of the total number of payee statements required to be furnished by the person during the calendar year.
Amended 2014
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 207(a)(3), substituted “furnished” for “filed”.
(3) Safe harbor for certain de minimis errors
Amended 2015
- 2015 Pub. L. 114-113 Pub. L. 114–113 added par. (3).
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(A) In general If, with respect to any payee statement—
(i) there are 1 or more failures described in subsection (a)(2)(B) relating to an incorrect dollar amount, needs § 6722(a)(2)(B)
(ii) no single amount in error differs from the correct amount by more than $100, and
(iii) no single amount reported for tax withheld on the payee statement differs from the correct amount by more than $25,
Amended 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 101(f)(1)(A), substituted “the payee statement” for “any information return”.
then no correction shall be required and, for purposes of this section, such statement shall be treated as having been furnished with all of the correct required information.
Amended 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 101(f)(1)(B), substituted “furnished” for “filed” in concluding provisions.
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(B) Exception Subparagraph (A) shall not apply to any payee statement if the person to whom such statement is required to be furnished makes an election (at such time and in such manner as the Secretary may prescribe) that subparagraph (A) not apply with respect to such statement.
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(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.
(d) Lower limitations for persons with gross receipts of not more than $5,000,000
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(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—
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(A) subsection (a)(1) shall be applied by substituting “$1,000,000” for “$3,000,000”,
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(3)(A), substituted “$1,000,000” for “$500,000” and “$3,000,000” for “$1,500,000”.
(B) subsection (b)(1)(B) shall be applied by substituting “$175,000” for “$500,000”, and
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(3)(B), substituted “$175,000” for “$75,000” and “$500,000” for “$250,000”.
(C) subsection (b)(2)(B) shall be applied by substituting “$500,000” for “$1,500,000”.
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(3)(C), substituted “$500,000” for “$200,000” and “$1,500,000” for “$500,000”.
(2) Gross receipts test A person meets the gross receipts test of this paragraph if such person meets the gross receipts test of section 6721(d)(2).
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(e) Penalty in case of intentional disregard If 1 or more failures to which subsection (a) applies are due to intentional disregard of the requirement to furnish a payee statement (or the correct information reporting requirement), then, with respect to each such failure—
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(1) subsections (b), (c), and (d) shall not apply,
(2) the penalty imposed under subsection (a)(1) shall be $500, or, if greater—
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(4)(A), substituted “$500” for “$250” in introductory provisions.
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(A) in the case of a payee statement other than a statement required under section 6045(b), 6041A(e) (in respect of a return required under section 6041A(b)), 6050H(d), 6050J(e), 6050K(b), or 6050L(c), 10 percent of the aggregate amount of the items required to be reported correctly, or
(B) in the case of a payee statement required under section 6045(b), 6050K(b), or 6050L(c), 5 percent of the aggregate amount of the items required to be reported correctly, and
(3) in the case of any penalty determined under paragraph (2)—
(A) the $3,000,000 limitation under subsection (a) shall not apply, and
Amended 2015
- 2015 Pub. L. 114-27 Pub. L. 114–27, § 806(e)(4)(B), substituted “$3,000,000” for “$1,500,000”.
(B) such penalty shall not be taken into account in applying such limitation to penalties not determined under paragraph (2).
(f) Adjustment for inflation
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(1) In general In the case of any failure relating to a statement required to be furnished in a calendar year beginning after 2014, each of the dollar amounts under subsections (a), (b), (d)(1), 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.
Amended 2014, 2017, 2018
- 2018 Pub. L. 115-141 Pub. L. 115–141, § 401(a)(299)(G), inserted “an amount equal to” after “increased by” and “for the calendar year” after “section 1(f)(3)”.
- 2017 Pub. L. 115-97 Pub. L. 115–97 substituted “for ‘calendar year 2016’ in subparagraph (A)(ii)” for “for ‘calendar year 1992’ in subparagraph (B)”.
- 2014 Pub. L. 113-295 Pub. L. 113–295, § 208(g), substituted “In the case of any failure relating to a statement required to be furnished in a calendar year beginning after 2014” for “For each fifth calendar year beginning after 2012”.
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(2) Rounding If any amount adjusted under paragraph (1)—
(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
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(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.