Title 26 Civil Penalties for Failures to Furnish

IRC 6724, Waiver; definitions and special rules, defines payee statements for purposes of the information return penalty provisions of IRC 6722, Failure to Furnish Correct Payee Statements.

The term "payee statement" includes any statement required to be furnished under IRC 6050I(e), Statements to be Furnished to Persons with Respect to Whom Information is Required, by businesses to persons required to be named in Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, or under IRC 6050I(g), Cash Received by Criminal Court Clerks, by Clerks of Court to Federal Prosecutors or Payers of Bail, IRC 6724(d)(2)(N). This situation differs from most information returns, such as Forms W-2 or 1099, where the payee statement is provided by the payer filer to a payee.

There is no special form or format required for Form 8300 payee statements.

IRC 6722 provides for a penalty when a payee statement is not timely and/or correctly furnished.

IRC 6722 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 6722. The following penalty amounts are effective for returns and statements required to be filed on or after January 1, 2016. See IRM 4.26.10.10.2.

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

$100 per failure, not to exceed an annual maximum of $1,500,000 for statements furnished correctly after 30 days, but on or before August 1, or

$260 per failure, not to exceed an annual maximum of $3,000,000 for statements not furnished by the due date (or not containing all required information or containing incorrect information) and not corrected by August 1. The penalty is $270 after 1/1/2019.