Title 26 Civil Penalties for Failures to File

IRC 6724, Waiver; Definitions and Special Rules, defines information returns for purposes of the information return penalty provisions found in IRC 6721, Failure to File Correct Information Returns.

The term "information return" includes any return required by IRC 6050I(a), Cash Receipts of More Than $10,000, or IRC 6050I(g), Cash Received by Criminal Court Clerks.

The failure to file penalty includes any failure to file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, on or before the required filing date, and any failure to include all the information required to be shown on the return or the inclusion of incorrect information.

IRC 6721 provides for a penalty when an information return is not timely and/or correctly filed by the due date of the return.

IRC 6721 penalty rates and maximum amounts are subject to annual inflationary adjustments enacted by the Tax Increase Prevention Act (TIPA) of 2014, section 208, effective for returns required to be filed in a calendar year beginning after 2014.

The Trade Preferences Extension Act (TPEA) of 2015, section 806, increased the tiered penalty amounts for IRC 6721. The following penalty amounts are effective for returns and statements required to be filed on or after January 1, 2016.

$50 per failure, not to exceed an annual maximum of $500,000 for returns filed correctly within 30 days of the due date.

$260 per failure, not to exceed an annual maximum of $3,000,000 for returns filed more than 30 days after the due date. The penalty is $270 after 1/1/2019.