Summary
The IRS has increased penalties for not filing correct information returns and/or not furnishing correct payee statements, with the amount of the penalty based on when the correct information return or payee statement is filed. The penalty for failing to issue a form by the 1099-NEC or 1099-MISC deadline can range from $50 to $280 per form in 2022.
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Additionally, the IRS has updated their employment audit procedures to include a review of information returns, which can result in significant penalties and backup withholding assessments.
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Summary
Effective with returns due after January 1, 2016, penalties for not filing correct information returns and/or not furnishing correct payee statements have increased and are now subject to inflationary adjustments. Employers must send Copy A of Forms W-2 and W-3 to the Social Security Administration by January 31 of the year for both paper and electronic forms, and must furnish Copy B and any other applicable copies of information returns to the employee by January 31 of the year. The amount of the penalty is based on when you file the correct information return or furnish the correct payee statement, and the penalty rates and maximums for not filing correct information returns and/or not furnishing correct payee statements vary depending on the type of business.
Increase in Information Return Penalties | Internal Revenue Service
irs.gov
Summary
The IRS has recently updated their employment audit procedures to include a review of information returns, which can result in significant penalties and backup withholding assessments. It is important to understand the IRS's new focus on Form 1099 audits, as well as to be aware of the penalties assessed by the IRS, such as the $1099 filing penalties and the $1,669,500 backup withholding assessments. It is also important to be aware of the potential for fraud and identity theft, as well as the potential for a W-9 form to be misfiled or not provided.
Form 1099 penalties are ridiculously high. What you must do NOW to avoid them. - W9manager
w9manager.com
file Forms 1099-B, DIV, G, INT, K, MISC, NEC, OID, and/or PATR, which report income subject to backup withholding, to match TIN and name combinations with IRS ...
General Instructions for Certain Information Returns (2022) | Internal Revenue Service
irs.gov
