Information return penalties

An information return penalty may apply if you don't timely or accurately file information returns or provide payee statements.

We mail you a notice if if we charged a penalty and charge monthly interest until you pay the amount in full.

On this page

• What to do if you got an IRS notice
• How we calculate the penalty
• Interest on a penalty
• Pay a penalty
• Remove or reduce a penalty
• Dispute a penalty
• Avoid a penalty
• Law and regulations

What to do if you got an IRS notice

Check that the information on the notice is correct. The notice has information about the penalty, the reason for the charge and what to do next. Follow the instructions.

If you can correct an issue in the notice, there may be reduced or no penalty. If the information is correct and you don't agree, you may be able to dispute the penalty.

For details, see Understanding your IRS notice or letter.

How we calculate the penalty

We charge separate penalties for failing to:

• File a correct information return on time
• Provide correct payee statements on time

Information return penalties

We charge penalties for each information return you fail to correctly file on time and each payee statement you fail to correctly provide on time.

Charges for each Information return or payee statement

The maximum penalty is different for small businesses and large businesses including government entities. There is no maximum penalty for intentional disregard. For details, see General Instructions for Certain Information Returns.

Interest on a penalty

We charge interest on penalties.

The date we begin to charge interest varies by the penalty type and amount. Interest increases the amount you owe until you pay your balance in full. For more information about the interest we charge on penalties, see Interest.

Pay a penalty

You can pay online or by mail with a check.

Pay your penalty in full to stop future penalties and interest from adding up.

Apply for a payment plan

If you can't pay the full amount of your penalty on time, pay what you can now and apply for a payment plan. You may reduce future penalties and interest when you set up a payment plan.

Remove or reduce a penalty

We may be able to remove or reduce the penalty if you acted in good faith and can show reasonable cause.

If you have reasonable cause, and received Notice 972CG, respond within 45 days (60 days if you're a foreign filer) before we assess the penalty. You may have reasonable cause if you:

• Acted responsibly before and after the failure occurred and
• Have significant reasons or the failure resulted from circumstances beyond your control

For details on reasonable cause for missing and incorrect names or taxpayer identification numbers, see Publication 1586, Reasonable Cause Regulations & Requirements for Missing and Incorrect Name/TINs on Information Returns PDF.

By law, we cannot remove or reduce interest unless the penalty is removed or reduced.

For more information, see Interest.

Dispute a penalty

If you disagree with the amount you owe, you may dispute the penalty.

Call us at the toll-free number at the top right corner of your notice or letter or write us a letter stating why we should reconsider the penalty. Sign and send your letter along with any supporting documents to the address on your notice.

Have this information when you call or send your letter:

• The notice or letter we sent you
• The penalty you want us to reconsider (for example, a Form 1099-NEC late filing penalty)
• For each penalty, an explanation of why you think we should remove it

If a notice or letter we sent you has instructions or deadlines for disputing the penalty, pay careful attention. You must follow the instructions to dispute the penalty.

If you didn't receive a notice or letter, get telephone assistance.

Avoid a penalty

You can avoid penalties when you:

• File information returns and provide payee statements before the due date
• Prepare the returns and payee statements with correct information
• File a waiver from electronic filing of information returns
• Apply for an extension of time and file information returns and provide payee statements before the extended due date

Electronic filing requirements

Final regulations for the Taxpayer First Act, provision 2301, were issued February 21, 2023, by the Department of the Treasury and the Internal Revenue Service. Treasury Decision (TD) 9972 amends the rules for filing returns and other documents electronically (e-file). These regulations reduce the 250-return threshold to generally require electronic filing by filers of 10 or more returns in a calendar year beginning in tax year 2023.

To determine if you meet the 10 or more threshold to electronically file:

• Identify how many information returns of any type covered by TD 9972 you need to file during a calendar year
• If 10 or more, you must file electronically

For examples, see Reduction in the electronic filing threshold beginning tax year 2023 in What’s new on FIRE.

If you experience a hardship that prevents you from complying with the threshold reduction, you can submit a Form 8508, Application for a Waiver from Electronic Filing of Information Returns PDF.

Due dates and extensions

Information returns must be postmarked or filed by the due date. For due dates, see A guide to information returns.

• To file most information returns electronically, see FIRE.
• To file Form 1099-series electronically, at no cost, see IRIS.
• To file Affordable Care Act information returns electronically, see AIR.

Apply for an extension of time

You can request extra time to file an information return and provide payee statements:

Information returns: Form 8809, Application for Extension of Time to File Information Returns

Payee statements: Faxing request for extension of time to furnish statements to recipients

Law and regulations

• Failure to File Correct Information Returns — Internal Revenue Code § 6721
• Failure to Furnish Correct Payee Statements — Internal Revenue Code § 6722
• Waiver; Definitions and Special Rules – Internal Revenue Code § 6724
• Reasonable Cause – Treasury Regulation §301.6724-1