Quote:
Originally Posted by Chas H
IIRC in the past there was no actual penalty for not filing a 1099, except the filer would be liable for unpaid taxes on the amount of the 1099.
The $600 threshold is ridiculous. There is talk of amending that figure to $5000, but if the bill was signed today it's too late.
Thanks for the links.
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O. Penalties
The following penalties generally apply to the person required to file information returns. The penalties apply to paper filers as well as to electronic filers.
See Sect. O
http://www.irs.gov/instructions/i1099gi/ar02.html#d0e2090
"For information on the penalty for failure to file electronically, see Penalty on page 5.
Failure To File Correct Information Returns by the Due Date (Section 6721)
If you fail to file a correct information return by the due date and you cannot show reasonable cause, you may be subject to a penalty. The penalty applies if you fail to file timely, you fail to include all information required to be shown on a return, or you include incorrect information on a return. The penalty also applies if you file on paper when you were required to file electronically, you report an incorrect TIN or fail to report a TIN, or you fail to file paper forms that are machine readable.
The amount of the penalty is based on when you file the correct information return. The penalty is:
$15 per information return if you correctly file within 30 days (by March 30 if the due date is February 28); maximum penalty $75,000 per year ($25,000 for small businesses, defined later).
$30 per information return if you correctly file more than 30 days after the due date but by August 1; maximum penalty $150,000 per year ($50,000 for small businesses).
$50 per information return if you file after August 1 or you do not file required information returns; maximum penalty $250,000 per year ($100,000 for small businesses).
If you do not file corrections and you do not meet any of the exceptions to the penalty described below, the penalty is $50 per information return.
Small businesses—lower maximum penalties. You are a small business if your average annual gross receipts for the 3 most recent tax years (or for the period you were in existence, if shorter) ending before the calendar year in which the information returns were due are $5 million or less.
Exceptions to the penalty. The following are exceptions to the failure to file penalty.
The penalty will not apply to any failure that you can show was due to reasonable cause and not to willful neglect. In general, you must be able to show that your failure was due to an event beyond your control or due to significant mitigating factors. You must also be able to show that you acted in a responsible manner and took steps to avoid the failure. ...................."
