Filing and processing dozens, or even hundreds or thousands, of information returns can be daunting. Here is a quick reference guide for what to expect when it comes to information return penalties when filed on paper and/or electronically and how you can avoid those mistakes, and those bills. Information Return Penalties Information returns are the foundation for much of your business tax reporting, as well as the reporting of your vendors, employees, and more. They are used to verify tax return entries, identify all applicable non-filing conditions, and detect fraudulent activity. Because your business does not exist in a vacuum, that means any missing or erroneous returns are penalized so that you can rectify your mistakes and hopefully learn from them in the future. Being able to receive and provide accurate tax-related information is imperative to the functionality and success of all businesses and the relationships they have established to further their operations. Each of the information returns that you file on paper or submit electronically are subject to scrutiny and can be the basis for several different fines and related penalties. Below, we’ve provided a quick reference guide for these penalties. There are separate penalties for failing to file correct information returns on time as well as failing to provide correct payee statements. The IRS has a quick and handy chart with the charges, organized by tax year. For the tax year 2021, the penalties include the following charges for each information return or payee statement: $50 for returns up to 30 days late $110 for returns 31 days late through August 1 $280 for returns after August 1 or not filed at all $560 for intentional disregard For the tax year 2022 (which will be due during the 2023 tax season), all penalty fees are the same except those falling into the intentional disregard category – which will be increased to $570 next year. Notice CP2100 & CP2100A – …
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