§6721 — Failure to file correct information returns
13 cases·3 followed·10 cited—23% support
Statute Text — 26 U.S.C. §6721
In the case of a failure described in paragraph (2) by any person with respect to an information return, such person shall pay a penalty of $250 for each return with respect to which such a failure occurs, but the total amount imposed on such person for all such failures during any calendar year shall not exceed $3,000,000.
For purposes of paragraph (1), the failures described in this paragraph are—
any failure to file an information return with the Secretary on or before the required filing date, and
any failure to include all of the information required to be shown on the return or the inclusion of incorrect information.
If any failure described in subsection (a)(2) is corrected on or before the day 30 days after the required filing date—
the penalty imposed by subsection (a) shall be $50 in lieu of $250, and
the total amount imposed on the person for all such failures during any calendar year which are so corrected shall not exceed $500,000.
If any failure described in subsection (a)(2) is corrected after the 30th day referred to in paragraph (1) but on or before August 1 of the calendar year in which the required filing date occurs—
the penalty imposed by subsection (a) shall be $100 in lieu of $250, and
the total amount imposed on the person for all such failures during the calendar year which are so corrected shall not exceed $1,500,000.
If—
an information return is filed with the Secretary,
there is a failure described in subsection (a)(2)(B) (determined after the application of section 6724(a)) with respect to such return, and
such failure is corrected on or before August 1 of the calendar year in which the required filing date occurs,
for purposes of this section, such return shall be treated as having been filed with all of the correct required information.
The number of information returns to which paragraph (1) applies for any calendar year shall not exceed the greater of—
10, or
one-half of 1 percent of the total number of information returns required to be filed by the person during the calendar year.
If, with respect to an information return filed with the Secretary—
there are 1 or more failures described in subsection (a)(2)(B) relating to an incorrect dollar amount,
no single amount in error differs from the correct amount by more than $100, and
no single amount reported for tax withheld on the information return differs from the correct amount by more than $25,
then no correction shall be required and, for purposes of this section, such return shall be treated as having been filed with all of the correct required information.
Subparagraph (A) shall not apply with respect to any incorrect dollar amount to the extent that such error relates to an amount with respect to which an election is made under section 6722(c)(3)(B).
The Secretary may issue regulations to prevent the abuse of the safe harbor under this paragraph, including regulations providing that this paragraph shall not apply to the extent necessary to prevent any such abuse.
If any person meets the gross receipts test of paragraph (2) with respect to any calendar year, with respect to failures during such calendar year—
subsection (a)(1) shall be applied by substituting “$1,000,000” for “$3,000,000”,
subsection (b)(1)(B) shall be applied by substituting “$175,000” for “$500,000”, and
subsection (b)(2)(B) shall be applied by substituting “$500,000” for “$1,500,000”.
A person meets the gross receipts test of this paragraph for any calendar year if the average annual gross receipts of such person for the most recent 3 taxable years ending before such calendar year do not exceed $5,000,000.
For purposes of subparagraph (A), the rules of paragraphs (2) and (3) of section 448(c) shall apply.
If 1 or more failures described in subsection (a)(2) are due to intentional disregard of the filing requirement (or the correct information reporting requirement), then, with respect to each such failure—
subsections (b), (c), and (d) shall not apply,
the penalty imposed under subsection (a) shall be $500, or, if greater—
in the case of a return other than a return required under section 6045(a), 6041A(b), 6050H, 6050I, 6050J, 6050K, or 6050L, 10 percent of the aggregate amount of the items required to be reported correctly,
in the case of a return required to be filed by section 6045(a), 6050K, or 6050L, 5 percent of the aggregate amount of the items required to be reported correctly,
in the case of a return required to be filed under section 6050I(a) with respect to any transaction (or related transactions), the greater of—
$25,000, or
the amount of cash (within the meaning of section 6050I(d)) received in such transaction (or related transactions) to the extent the amount of such cash does not exceed $100,000, or
in the case of a return required to be filed under section 6050V, 10 percent of the value of the benefit of any contract with respect to which information is required to be included on the return, and
in the case of any penalty determined under paragraph (2)—
the $3,000,000 limitation under subsection (a) shall not apply, and
such penalty shall not be taken into account in applying such limitation (or any similar limitation under subsection (b)) to penalties not determined under paragraph (2).
In the case of any failure relating to a return required to be filed in a calendar year beginning after 2014, each of the dollar amounts under subsections (a), (b), (d) (other than paragraph (2)(A) thereof), and (e) shall be increased by an amount equal to such dollar amount multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year determined by substituting “calendar year 2011” for “calendar year 2016” in subparagraph (A)(ii) thereof.
If any amount adjusted under paragraph (1)—
is not less than $75,000 and is not a multiple of $500, such amount shall be rounded to the next lowest multiple of $500, and
is not described in subparagraph (A) and is not a multiple of $10, such amount shall be rounded to the next lowest multiple of $10.
Treasury Regulations
- Treas. Reg. §Treas. Reg. §301.6721-0 Table of Contents
- Treas. Reg. §Treas. Reg. §301.6721-0(a) Waiver of the penalty.
- Treas. Reg. §Treas. Reg. §301.6721-0(b) Significant mitigating factors.
- Treas. Reg. §Treas. Reg. §301.6721-0(c) Events beyond the filer's control.
- Treas. Reg. §Treas. Reg. §301.6721-0(d) Responsible manner.
- Treas. Reg. §Treas. Reg. §301.6721-0(e) Acting in a responsible manner—special rules for missing TINs.
- Treas. Reg. §Treas. Reg. §301.6721-0(f) Acting in a responsible manner—special rules for incorrect TINs.
- Treas. Reg. §Treas. Reg. §301.6721-0(g) Due diligence safe harbor.
- Treas. Reg. §Treas. Reg. §301.6721-0(h) Reasonable cause safe harbor after election under section 6722(c)(3)(B).
- Treas. Reg. §Treas. Reg. §301.6721-0(i) §301.6721-0(i)
- Treas. Reg. §Treas. Reg. §301.6721-0(j) Failures to which this section relates.
- Treas. Reg. §Treas. Reg. §301.6721-0(k) Examples.
- Treas. Reg. §Treas. Reg. §301.6721-0(l) §301.6721-0(l)
- Treas. Reg. §Treas. Reg. §301.6721-0(m) Procedure for seeking a waiver.
- Treas. Reg. §Treas. Reg. §301.6721-0(n) Manner of payment.
- Treas. Reg. §Treas. Reg. §301.6721-0(o) Applicability dates.
- Treas. Reg. §Treas. Reg. §301.6721-0(v) Failures to which a solicitation relates.
- Treas. Reg. §Treas. Reg. §301.6721-1 Failure to file correct information returns
- Treas. Reg. §Treas. Reg. §301.6721-1(a) Imposition of penalty—(1) General rule.
- Treas. Reg. §Treas. Reg. §301.6721-1(b) Reduction in the penalty when a correction is made within specified periods—(1) Correction within 30 days.
- Treas. Reg. §Treas. Reg. §301.6721-1(c) Exception for inconsequential errors or omissions—(1) In general.
- Treas. Reg. §Treas. Reg. §301.6721-1(d) Exception for a de minimis number of failures—(1) Requirements.
- Treas. Reg. §Treas. Reg. §301.6721-1(e) Safe harbor exception for certain de minimis errors—(1) In general.
- Treas. Reg. §Treas. Reg. §301.6721-1(f) Lower limitations on the $250,000 maximum penalty amount with respect to persons with gross receipts of not more than $5,000,000—(1) In general.
- Treas. Reg. §Treas. Reg. §301.6721-1(g) Higher penalty for intentional disregard of requirement to file timely correct information returns—(1) Application of section 6721(e).
13 Citing Cases
The failure to file penalty pursuant to section 6721 and the failure to furnish penalty pursuant to section 6722 are assessable penalties that are not subject to preassessment judicial review.
Under the circumstances, we hold that respondent has not carried his burden, under section 7491(c), to produce evidence that it is appropriate to apply the intentional disregard penalties against petitioner for 2005 and 2006.
The sole .issue for decision is whether respondent's determination to sustain the lien filing to collect the penalties assessed is an abuse of discretion .2 We hold it is not .
3 Arbor Vita failed to pay its unemployment tax liability and further assessed a section 6721 penalty for failure to file Forms W–2, Wage and Tax Statement, with the Social Security Administration.
The IRS also assessed a civil penalty under section 6721 for failure to file correct information returns for 2013.
Respondent assessed a section 6721 penalty against petitioner on November 3, 2014.
(SSA) with Forms W-2 for these workers. The IRS sent petitioner a CP215 Notice, Notice of Penalty Charge, for each year informing petitioner ofthis discrepancy, requesting further information, and notifying petitioner that it risked penalties under section 6721. Having received no response, the IRS, on December 2, 2013, assessed $5,942 ofsection 6721(e)(2) penalties against petitioner for 2010. On November 2Congress has increased the penalties under sec. 6721(a)(1) and (e)(2) to $250 and at lea
It failed to file other returns, and the IRS pre- pared substitutes for returns (SFRs) that met the requirements ofsection 6020(b).¹ The IRS assessed all ofthe taxes in question plus a penalty under section 6721 for ¹All statutory references are to the Internal Revenue Code in effect at all relevant times, and all Rule references are to the Tax Court Rules ofPractice and Procedure.
HARASSMENT BY THREATENING ME WITH MALICIOUS PROSECUTION IN VIOLATION 26 USC 7214(a)." The letter also contains pages ofinapposite citations ofthe United States Code and caselaw. 9In 2006 for taxable year 2004 the Commissioner proposed assessment ofa sec. 6721 penalty against petitioner for incorrectly filing 124 Forms 1099-MISC. In response petitioner sent the District Director a letter written in a style similar to that used in the letters that he sent to Revenue Agent Pritchard, wherein he ide
-12- [*12] OnFebruary 18, 2008, the IRS assessed a $360 penalty againstthe company under section 6721 for the annual tax period endingDecember 31, 2005, for failure to timely file Form W-2.
On January 27, 2009, respondent recorded an NFTL against petitioner for a section 6721 civil penalty of$9,877 for the tax period ending December 31, 2005, which was assessed on November 17, 2008.
September 30, 1999, March 31, 2000, and September 30, 2000, through December 31, 2002, and for a civil penalty assessed under section 6721 for taxable year 1998 .