The IRS has strengthened its penalty phase of the reporting requirements. These penalties are effective beginning January 1st for the 2015 tax year filing period. The penalties are as follows:
1-30 days late: $30.00 each penalty per return not filed with a maximum of $500,000.00 per year ($175,000.00 for small business maximum)
30 days – 8/1/2016: $100.00 each penalty per return not filed timely with a maximum of $1,500,000.00 per year ($500,000.00 for small business maximum)
After 8/1/2016: $250.00 each penalty per return not filed timely with a maximum of $3,000,000.00 per year ($1,000,000.00 for small business maximum)
Intentionally Disregarded: $500.00 each penalty per return not filed timely with no maximum limit per year (No maximum limit for small business)
As you can see from the information above, the penalties can be severe. However, should your supplier not provide you with necessary paperwork, you will not be penalized – SO LONG AS, your attempts to collect the information can be provided and are sufficient to prove that you made attempts to obtain the information.
More than ever, it is important that you are complying with these regulations.