Failure to File or Failure to Furnish Information Return Penalties
Penalties for not filing correct information returns may apply if you:
- Don’t file a correct information return by the due date;
- File on paper when you were required to file electronically;
- Don’t report a Taxpayer Identification Number (TIN);
- Report an incorrect TIN; or
- Don’t file paper forms that are machine readable.
Penalties for not providing correct payee statements may apply if:
- You don’t provide a correct payee statement by the applicable date;
- All required information isn’t shown on the statement; or
- Incorrect information is included on the statement.
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If a business does not file its information returns (Forms W-2 and 1099) by the due date and in the manner required, the IRS will charge a failure to file penalty based on how late the returns are filed and the size of the business. The IRS will also charge a failure to furnish penalty if the business does not provide a correct copy of the information return to its employees/workers by the required due date. The failure to furnish penalty is the same rate as the failure to file rate.
If the business has reasonable cause for why these returns were not filed or furnished by the due date, you can request penalty abatement.
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