Information return penalties are important tools for the IRS to encourage voluntary compliance by taxpayers. See IRM 1.2.1.12.1, Policy Statement 20–1 (Formerly P-1-18), Penalties are used to enhance voluntary compliance.

The law requires taxpayers to timely file correct information returns with the IRS and to timely furnish complete payee statements to recipients. Information return penalties are imposed for any failure to file an information return or payee statement on or before the required filing date, in the required manner, and for any failure to include all the information required to be shown or the inclusion of incorrect information.

IRC 6721 provides a penalty for failure to file correct information returns.

IRC 6722 provides a penalty for failure to furnish correct payee statements.

IRC 6723 provides a penalty for failure to comply with other information reporting requirements.

IRC 6724 provides a reasonable cause waiver; definitions of information returns and special rules.

The term "information return" means any statement, form, or return as described in IRC 6724(d)(1), or 26 CFR 301.6721-1(h), and the term "payee statement" means any statement as described in IRC 6724(d)(2) or 26 CFR 301.6722-1(e). See Exhibit 20.1.7-3 for a listing of forms.

The Director of Business Support is the director responsible for the servicewide civil penalty program.

Overall responsibility for civil penalty programs is assigned to OSP. OSP is a matrix organization residing in the Business Support (Small Business/Self Employed) Function. OSP is charged with coordinating policy and procedures concerning the administration of civil penalty programs, ensuring consistency with the penalty policy statement, reviewing and analyzing penalty information, researching penalty effectiveness on compliance trends, and determining appropriate action necessary to promote voluntary compliance.

Each IRS organization is responsible for establishing an internal process for managing their procedures based upon these Servicewide policies and will develop additional guidance or reference materials for their specific functional administrative needs. However, such reference material must receive approval from OSP prior to distribution and must remain consistent with the policies and general procedural requirements set forth in this IRM, Policy Statement 20-1 (e.g., Penalty Policy Statement) in IRM 1.2.1.12.1, Policy Statement 20-1 (Formerly P-1-18), Penalties are used to enhance voluntary compliance, and any other guidance relating to civil penalties.

All employees must keep the following objectives in mind when handling each penalty case:

Every function in the IRS has a role in proper penalty administration. It is essential that each function conducts its operations with an emphasis on promoting voluntary compliance. Appropriate reviews must be conducted to ensure consistency with Policy Statement 20-1 (Formerly P-1-18), Penalties are used to enhance voluntary compliance. See IRM 1.2.1.12.1.

To promote the goal of consistency and fairness, OSP reviews semi-annually a sample of penalty assessments, provided by SB/SE Research. See IRM 20.3.1, Civil Penalty Accuracy Review Process. The report of findings is shared with the Director, Business Support, the CFO, and other leadership as needed. The completed report is uploaded to an enterprise shared folder. Reports will be prepared when a significant issue develops, such as a correction to programming that affects many taxpayers.

OSP is organized into two sub-groups: Strategy & Analytics (SA) and Technical Analysis & Policy Specialist (TAPS). The SA group oversees penalty administration across multiple penalty programs. TAPS is a group of analysts that are assigned to specific penalties and serve as the subject matter expert. Each analyst is responsible for setting and maintaining policy and reviewing trends impacting their programs.

For IRM 20.1.7, "TIN" , refers to an Employer Identification Number (EIN), a Social Security Number (SSN), an Individual Taxpayer Identification Number (ITIN), or an Adoption Taxpayer Identification Number (ATIN).

See Exhibit 20.1.7-5, Acronyms, for a list of acronyms and definitions used in this IRM.

See the related resources with titles below:

The IRS adopted the Taxpayer Bill of Rights (TBOR) in June 2014. Employees are responsible for being familiar with and acting in accordance with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see Pub 5170, Taxpayer Bill of Rights, and the TBOR link at: https://irssource.web.irs.gov/Lists/General%20News/DispItemForm.aspx?ID=126.

Payer Master File (PMF) is a file consisting of a composite of payer interest, partnership and S corporation distributions, gambling winnings, and miscellaneous/other categories of information returns filed by businesses, corporations, banks, credit unions, and other payers.

This program creates and maintains a database of information relating to filers of information returns (such as the Form 1098 series, Form 1099 series, etc.). Information returns and extension and waiver requests are maintained for five tax years on PMF.

PMF contains the payer entity and filing data from the payer record for certain information return submissions. The Information Return Master File (IRMF) database is updated on a weekly basis and is where the payee data (record of payment data to individuals from the payer) is updated and maintained.

The Internal Revenue Code outlines civil penalty provisions for persons or entities who fail to file information returns as required. Based on the information return data processed to PMF, irreconcilable information is subject to penalties.

Employees can request information through the online Integrated Data Retrieval System (IDRS) and paper transcripts through the Privacy Act Transcript Request Activity (PATRA).

PMF (Command Code (CC) “PMFOLS”) maintains data covering the five most current tax years of information for all Form 1096, Form W-3, Form 1042-T, Form 1094-B, and Form 1094-C documents, including generated penalty proposal amounts.

Penalty abatements or waivers of proposed penalties (whether based on computer generated notices or manually determined) are not posted to PMF, therefore will not be available on PMFOL. This information must be obtained from IDRS CC "BMFOL" (MFT 13), CC "IMFOL" (MFT 55), or CC "TXMOD" (MFT 13/55).

The return must be postmarked by the due date. Exhibit 20.1.7-3 shows the due dates for most information returns.

When any due date falls on a Saturday, Sunday or legal holiday, the due date becomes the next "business" day that is not a Saturday, Sunday, or legal holiday. See IRC 7503.

Information returns are filed either on paper or electronically. Paper information returns are filed with the Submission Processing Campus sites. Electronic information returns are filed through the FIRE (Filing Information Returns Electronically) System. Beginning January 2023, Forms 1099 can also be filed electronically through IRIS (Information Reporting Intake System). Forms W-2 are filed with the Social Security Administration and can be filed electronically through SSA Business Services Online. Information returns related to the Affordable Care Act (ACA) such as Form 1095-B and Form 1095-C are filed through the AIR (ACA Information Returns) System.

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 Reg. 26 CFR 301.6011-2, reduced the threshold to require electronic filing, from 250 or more of the same document type to the aggregate of 10 or more returns in a calendar year beginning in tax year 2023. Partnerships are subject to additional e-filing rules. See IRM 20.1.7.11.

A filer can request a waiver from the requirement to file information returns electronically by filing Form 8508, Application for a Waiver from Electronic Filing of Information Returns. See IRM 3.42.9.10, Form 8508, Application for a Waiver from Electronic Filing of Information Returns.

An exemption is allowed for filers for whom using the technology required to file electronically conflicts with their religious beliefs. Although filers are not required to file a waiver or take any action to claim religious exemption, filers have the option to notify the IRS by filing Form 8508, Application for a Waiver From Electronic Filing of Information Returns. The exemption will be permanently recorded in the Payer Master File and the filer will not need to file a waiver in subsequent years.

A filer can request an initial (automatic 30-day extension) and/or additional extension of time (non-automatic 30-day extension) to file information returns by filing Form 8809, Application for Extension of Time to File Information Returns, with the IRS. The extension request must be postmarked no later than the due date of the return, but not before January 1 of the filing year.

There are four methods for filing a request for an extension of time to file information returns:

Filers can also request an extension of time to furnish the statement to recipients (payees). Filers have the option to use Form 15397, Application for Extension of Time to Furnish Recipient Statements or send a written request. The request must be faxed to the IRS. It must be received no later than the due date on which the statements are due to the recipients. The faxed letter must contain:

See IRM 3.42.9.11, Information Returns Extension Request Processing, for more information on extension requests.

IRC 6751(b)(1) states, in general, that no penalty under the IRC shall be assessed unless the initial determination of such assessment is personally approved (in writing) by the immediate supervisor of the individual making such determination or such higher-level official as the Secretary may designate. At this time, the Secretary has not designated any higher-level official to approve initial determinations.

The following penalties are excluded from the supervisory approval:

A campus or field function will determine that a penalty should be imposed.

See Exhibit 20.1.7-4 for a listing of Penalty Reference Numbers (PRNs) for information return penalties, their descriptions and which function uses them.

To compute the appropriate information return or payee statement penalty as it relates to IRC 6721, IRC 6722, or IRC 6723, multiply the number of violations by the penalty rate in each penalty code section.

Campus (PSC) function: refer to IRM 4.19.25, Information Return Penalty (IRP) Procedures, or IRM 20.1.7.5.3 for more information.

Field functions: refer to IRM 20.1.7.5.1 and IRM 20.1.7.5.2 for more information.

Do not assess the same penalty multiple times on the same return or payee/recipient statement. For example, if a Form 1099-MISC was filed late and with incorrect information, assess the IRC 6721 penalty only once for that form. However, an IRC 6722 penalty can also be assessed on that form for failure to furnish a correct payee statement.

If more than one failure under the same penalty code section is applicable for a document, then apply the penalty using the following criteria:

Copies of correspondence pertaining to the taxpayer must be sent to the authorized representative if a valid POA or TIA is received.

A reply from a valid POA must be handled in the same manner as if the taxpayers themselves were responding.

Original documents, photocopies, or documents submitted by FAX transmission are acceptable for processing.

See IRM 4.11.55, Power of Attorney Rights and Responsibilities, for additional information regarding POAs and TIAs.

No tax information can be sent to or discussed with an unauthorized third party.

Secure and make a copy of the delinquent information returns.

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Prepare separate transmittals for each type of information return if there is more than one type of information return.

Prepare Form 3198, Special Handling Notice for Examination Case Processing. Check the box “Civil Penalties” under “Special Features”. Under “Other Instructions” section of “Special Features”, state “Assess TC 240 penalties. Assess $ XXXX for Tax Year XXXX”. Include a separate statement for EACH year.

Prepare and retain in the penalty case file Form 8278, Assessment and Abatement of Miscellaneous Civil Penalties, for each tax year for the applicable penalty code section(s) and PRN. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡

Prepare and retain in the penalty case file Form 3645, Computation of Information Return Penalty, for each tax year. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡

Complete Form 886-A, Explanation of Items, activity records, etc. as applicable for the penalty case file.

Ask for payment, prepare Form 3244-A, Payment Posting Voucher-Examination, and process the payment if the taxpayer agrees with the penalty.

Do not secure an agreement on the Examination Report of Income Tax Changes. The information return penalty case file is separate from an income tax, employment tax or other case file.

See Document 13267, Field Procedures for Securing and Processing Information Return Penalties, for more information on working information return penalty cases.

Penalty assessments:

Abatements/Non-assessment:

Unassessed Liabilities - If after discussion of the causes for the failure, the employee determines that a taxpayer did not establish reasonable cause for the failure, the employee will inform the taxpayer that the penalty will be asserted.

Assessed Liabilities - When the Collection employee makes a determination not to abate a penalty for lack of reasonable cause, the taxpayer will be informed of that decision.

The penalties will be assessed on a Civil Penalty Module with:

PSC (IRP Unit) assesses penalties that are preceded by a systemic Notice 972CG or other failures that are not preceded by this notice. See IRM 4.19.25, Information Return Penalty (IRP) Procedures.

The penalty is assessed/waived/abated/sustained using command code ADJ54. See IRM 21.5.2, Adjustment Guidelines, for complete Campus processing instructions.

Letter 1948-C, Civil Penalty Explained, is sent to the filer to request additional information, or to notify the filer that the explanation submitted establishes reasonable cause and the penalty will not be charged or will be removed.

Letter 854-C, Penalty Waiver or Abatement Disallowed/Appeals Procedure Explained, is sent to the filer when a penalty waiver or abatement request is fully or partially denied. This letter provides appeal rights and the procedures filers must follow if they wish to appeal the IRS's decision.

See IRM 4.19.25.12, Correspondex Letters, for a complete list of letters the IRP program uses.

The following information must be input to the appropriate Civil Penalty Module to record the consideration of an assessment, or abatement of a penalty or a waiver request:

The TC 290 acts as a carrier transaction for adjustments on a civil penalty module. The TC 290 and the penalty reference number will carry to the civil penalty module as a TC 240/241 with the penalty reference number used in the adjustment transaction. The TC 290 is systemically deleted.

IRM 1.2.1.12.2, Policy Statement 20-2 (Formerly P-2-4), Penalties and interest not asserted against Federal agencies, states that penalties and interest will not be asserted against agencies or instrumentalities of the United States.

Federal agencies are restricted from certain types of enforcement, including penalties. As a result, systemic or manual penalty assessments are blocked upon input. Refer to IRM 5.19.15, Federal Agency Delinquency (FAD) Program, for additional information. If additional information is needed, contact the FAD unit via SERP “Who and Where” link- FAD Contact.

Employment Code F is assigned to agencies of the United States Government. See IRM 3.13.2.6.3, Employment Code (EC) F, for additional information on employment code assignment.

Federal agencies are not subject to receiving Notice 972CG. In lieu of Notice 972CG, federal agencies receive Notice 972F (formerly Notice 1313) informing them of those information returns filed with missing/incorrect TINs so they can take appropriate corrective actions.

The Entity Function is the only area authorized to establish BMF accounts. Hand carry or use Form 3210, Document Transmittal, to route all cases that require that an account be established on the BMF to the Entity Control Unit. Maintain controls for all cases routed to Entity and ensure that they are returned for penalty assertion.

Assess the appropriate penalty on IDRS following the instructions in this IRM subsection. Verify that the penalty was not previously assessed on the Civil Penalty Module (CPM).

All IMF penalties must be assessed against the responsible individual. Assessments against joint accounts will not post to the CPM.

An unpostable condition will occur when the taxpayer does not have an account on the IMF under their own SSN. Using the valid individual SSN, establish the account using CC "ENREQ" with TC 000.

For the penalty to be assessed against a spouse filing as the secondary taxpayer on a joint individual tax return when that spouse has no account on the IMF, establish an account using "ENREQ" with TC 000.

Special action to establish a CVPN for assessing civil penalties is required if all of the following conditions are met:

To establish a separate CVPN, use an IMF entity change (CC "ENREQ" to generate a TC 013) with the special CVPN procedures described in the IDRS Handbook. When using this special procedure, only the CVPN change will be input. No other entity change information is permitted. Information to otherwise update the entity, such as an address change, must be input before establishing the CVPN. When using this procedure, both first and last names must match the Master File name. If the name does not show on IDRS/Master File, check CC "MFTRA" or "INOLE."

For a correct account on the Master File that has a CVPN, the name line will be updated (e.g., taxpayer's current account name is Mary Jones and the CVPN is Mary Smith) by input of CC "ENREQ" with the special procedures described above.

If a failure is corrected within 30 days after the due date of the information return required to be filed, the penalty will be reduced.

If the failure is corrected more than 30 days after the due date of the information return required to be filed, but on or before August 1 of the filing year, the penalty will be reduced.

Small Business Limitation - If the filer's average annual gross receipts for the three most recent taxable years do not exceed $5,000,000, the maximum penalty in each of the three penalty categories will be reduced. For example, if the filer uses a calendar year for tax purposes, and the calendar year during which the return is required to be filed is 2023, then, the most recent three taxable years are 2022, 2021 and 2020.

See Exhibit 20.1.7-1 and Exhibit 20.1.7-2 for applicable penalty rates and maximum limitations for small and large businesses and reduction of the penalty when corrected within certain time frames.

The Intentional Disregard of the Rules and Regulations penalty under IRC 6721(e) applies when the facts and circumstances show that the filer knowingly or willfully failed to comply with the filing requirements of the information returns.

Intentional disregard occurs when a filer knowingly or willfully chooses to ignore a rule or regulation’s requirements. The facts must show the filer:

26 CFR 301.6721-1(g)(3)(i) provides that a pattern of failures indicates intentional disregard. The greater the number of failures, the greater the likelihood some of those failures could be due to intentional disregard.

Additional questions relevant to ascertaining the existence of intentional disregard are:

For instance, intentional disregard may exist when the filer believes it would be less expensive to pay the penalties under IRC 6721 than to comply with the applicable filing requirements of 26 CFR 301.6721-1(g)(3)(i).

The Intentional Disregard of the Rules and Regulations penalty is $580 for returns due in 2023 and $630 for returns due in 2024 (see Exhibit 20.1.7-1 for rates of other years) for each information return required to be correctly filed, or if greater:

When the intentional disregard is due to failure to file electronically as required by IRC 6011(e) and 26 CFR 301.6011-2 (see IRM 20.1.7.11, Regulations Requiring Use of Electronic Form), the method to compute the aggregate amount of the items required to be reported correctly under either IRC 6721(e)(2)(A) or IRC 6721(e)(2)(B) is as follows:

Form 8300 -The intentional disregard penalty for failing to file a correct Form 8300 under IRC 6050I(a) is the greater of:

The penalty for failing to file a correct Form 8300 applies to cash amounts exceeding $10,000 received by a trade or business (as defined by IRC 162). The information required to be provided by the recipient of the cash includes: the name, address and TIN of the person providing the cash; the amount of cash received; and the date and nature of the transaction.

The intentional disregard penalty on Form 8300 is subject to a pre-assessment administrative appeal. Generally, this penalty will only be assessed as a result of an area office examination. See IRM 4.26.11, BSA Examiner Responsibilities for Form 8300 Examinations, for guidance on penalty applicability.

There is no maximum dollar limitation for the intentional disregard of the rules and regulations penalty.

No more than one IRC 6721 penalty can be imposed even if there is more than one failure on the same information return (for example, a return was filed late and with incorrect TIN). When a return is filed with multiple failures and the penalty amounts differ, the higher penalty will be imposed.

The de minimis exception will apply to the number of incorrect information returns remaining after the reasonable cause waiver has been allowed. The de minimis exception will apply if the return:

The maximum number of corrected information returns to which this exception applies cannot exceed the greater of: 10, or one-half of one percent of the total number of returns required to be filed during that calendar year. This exception only applies to returns that are due on January 31, February 28th or March 15th. Nevertheless, the returns that are not due on these dates are included in the total number of information returns that the filer is required to file for purposes of calculating the number of the returns subject to this exception.

The penalty shall not be assessed for errors or omissions that are considered inconsequential.

The term inconsequential means any failure that does not make it difficult for or prevent the IRS from:

Errors or omissions are never considered inconsequential if they relate to:

The IRS may administratively specify other errors or omissions that are never considered inconsequential.

Safe harbor for certain de minimis errors on information returns and payee statements: IRC 6721(c)(3) and IRC 6722(c)(3) state with respect to an information return filed with the Secretary and a payee statement required to be furnished to a payee, if no single amount in error differs from the correct amount by more than $100, and no single amount reported for tax withheld differs from the correct amount by more than $25, then no correction shall be required and, for purposes of IRC 6721 and IRC 6722, such return shall be treated as having been filed/furnished with all of the correct required information. This safe harbor applies to returns required to be filed, and payee statements required to be furnished, after December 31, 2016. The recipients have the option to elect out of this safe harbor and can request to have the information return be corrected by the filer. See Notice 2017-09, IRB 2017-04 .

These procedures are used to identify late filed paper returns received by the Submission Processing Campus during the current processing year:

Do not identify returns filed by federal or quasi-governmental agencies for the penalty.

If a correction is being submitted for a name or TIN change, or for the wrong type of return filed, the filer will submit two returns to make the correction:

Campuses must attempt to identify this situation and ensure that the penalty is not assessed for the "replacement" return (original), since it is part of a correction.

See IRM 3.10.8, Campus Mail and Work Control, Information Returns Processing, for more information.

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For electronically filed information returns, TSO will enter the received date and provide postmarked material for late filed returns to allow PMF to automatically generate the penalty proposal notice for late filing as applicable. The notice generation process considers any granted extension of time to file.

The Intentional Disregard of the Rules and Regulations Penalty applies when the facts and circumstances show that the filer knowingly or willfully failed to comply with the requirements of IRC 6722.

Intentional disregard occurs when a filer knowingly or willfully chooses to ignore a rule or regulation’s requirements. The facts must show the filer:

26 CFR 301.6721-1(g)(3)(i) provides that a pattern of failures indicates intentional disregard. The greater the number of failures, the greater the likelihood some of those failures could be due to intentional disregard. Additional questions relevant to ascertaining the existence of intentional disregard are:

Intentional disregard may exist when the filer believes it would be less expensive to pay the penalty under IRC 6722 than to comply with the requirement to provide a statement (26 CFR 301.6721-1(g)(3(iv)). Check payee's prior history of compliance to determine intentional disregard.

The Intentional Disregard of the Rules and Regulations Penalty is $580 for returns due in 2023 and $630 for returns due in 2024 (see Exhibit 20.1.7-1 for rates of other years) for each payee statement required to be filed, or if greater:

Form 8300 - The intentional disregard penalty for failing to provide a payor of cash with a statement as required by IRC 6050I(e) is the greater of $580 for returns due in 2023 and $630 for returns due in 2024 (see Exhibit 20.1.7-1 for rates of other years) or 10 percent of the amount required to be provided on the statement.

There is no maximum dollar limitation for the Intentional Disregard of the Rules and Regulations Penalty under IRC 6722.

No more than one IRC 6722 penalty will be imposed even if there is more than one failure on the same statement (for example, furnished late and with incorrect TIN). However, where a statement is furnished with multiple failures and the penalty amounts differ, the higher penalty will be imposed.

The penalty shall not be assessed if an error or omission is inconsequential. An error or omission is inconsequential when the failure does not prevent:

Errors or omissions are never considered inconsequential if they relate to:

Safe harbor for certain de minimis errors on information returns and payee statements: IRC 6721(c)(3) and IRC 6722(c)(3) state with respect to an information return filed with the Secretary and a payee statement required to be furnished to a payee, if no single amount in error differs from the correct amount by more than $100, and no single amount reported for tax withheld differs from the correct amount by more than $25, then no correction shall be required and, for purposes of IRC 6721 and IRC 6722, such return shall be treated as having been filed/furnished with all of the correct required information. This safe harbor applies to returns required to be filed, and payee statements required to be furnished after December 31, 2016. The recipients have the option to elect out of this safe harbor and can request to have the information return be corrected by the filer. See Notice 2017-09, IRB 2017-04. For information returns required to be filed and furnished on or after January 1, 2022, see 26 CFR 301.6721-1 and 26 CFR 301.6722-1.

An inconsequential error or omission is not considered a failure to comply with a specified information reporting requirement. Therefore, the penalty shall not be assessed.

The term "inconsequential" means any failure that does not make it difficult for the IRS to put the information to its intended use or prevent a payee from timely receiving correct information and reporting it on their return.

Unless otherwise specified in this chapter, the IRS will waive (abate or not assess) an information return penalty when a filer requests a waiver of the penalty and establishes reasonable cause.

If the request properly establishes reasonable cause, the penalty will be abated using normal procedures.

If reasonable cause is not established, disallow the request using normal procedures.

If additional information is needed to substantiate a request for the waiver of a penalty due to reasonable cause, contact the taxpayer or authorized representative.

In all cases involving unauthorized third-party requests, correspond directly with the taxpayer to inform them of the action taken. Send a letter to the unauthorized third party explaining that you have responded directly to the taxpayer and include a paragraph in the taxpayer's letter requesting that the taxpayer notify the third party of our direct reply to the taxpayer.

If the correspondence contains the penalty of perjury language (jurat) it must contain the affected taxpayer's signature or the signature of the taxpayer's authorized representative. The signature requirements are as follows:

Reasonable cause for the information return penalties generally exists when:

Acting in a Responsible Manner (26 CFR 301.6724-1(d)) generally includes exercising the same degree of care that a reasonably prudent person (or organization) would use in the course of its business in determining filing obligations and in handling account information such as account numbers and balances. The filer must act in a responsible manner both before and after the failure occurs. Acting in a responsible manner also includes taking steps to avoid the failure, for example:

Where a penalty is imposed for missing or incorrect TINs, a filer must comply with special rules for acting in a responsible manner. See IRM 20.1.7.12.2.

When reviewing a filer's request for a waiver, the following questions must be addressed to determine if the filer has acted in a responsible manner:

A waiver must not be automatically granted where the filer claims ignorance of the filing requirements. However, ignorance of the law must be considered as one factor which indicates that the filer acted in a responsible manner if all the other facts support this contention.

Significant mitigating factors - For the filer to establish reasonable cause under this category, the filer must show that they acted in a responsible manner as well as the existence of a significant mitigating factor. Events generally considered to be significant mitigating factors include, but are not limited to:

A filer can not continually rely on the same explanation to establish reasonable cause when the filer's compliance history indicates a pattern of failures. A filer is expected to take significant steps to prevent future failures of the same type. Consider the intentional disregard provisions.

Determine if the filer was previously penalized. If so, did the error rate decrease from one year to the next? Consider the intentional disregard provisions; however, if the filer can show that they acted in a responsible manner and the failure was due to an event beyond the filer's control, then a penalty in a prior year must not be used as cause not to abate/waive the penalty.

Events beyond the filer's control - for the filer to establish reasonable cause under this category, the filer must show that it acted in a responsible manner, as well as the event being beyond the filer's control. Events generally considered beyond the control of the filer include (but are not limited to) the following items in this subsection.

Actions by the IRS - To establish an event beyond the filer's control as the result of actions by the IRS, the filer must show it relied on erroneous written information provided by the IRS. The filer must also show that reliance on the written advice was reasonable and that it relied in good faith on the information. The filer must provide:

Actions of an Agent -- For a filer to establish events beyond the filer's control as the result of actions of an agent (imputed reasonable cause), the filer must show that:

Actions by the payee or any other person --For the filer to establish reasonable cause as the result of actions by the payee or any other person with respect to the return or payee statement:

Unavailability of business records - the business records must have been unavailable as a result of unforeseen conditions, and in a manner which would prevent timely compliance (ordinarily at least a two-week period prior to the due date or extended due date) of the information return, and the unavailability was caused by a supervening event. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

A supervening event includes, but is not limited to:

The return was delivered to the IRS after its due date by the United States Postal Service if it was correctly addressed, mailed, and postmarked by the due date by the United States Postal Service, or a private postal meter, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ as long as delivery was within the time period a document mailed from the same point of origin ordinarily would be received if mailed on the last day prescribed for filing the return. If the return is received after the due date, the filer must establish the return was deposited in the mail on or before the due date, the delay in receiving the return was due to a delay in the transmission of the mail, and the cause of the delay.

The taxpayer's statement that they erroneously addressed their return to the state taxing agency does not in itself constitute reasonable cause for filing late, since a properly addressed envelope is a legal requirement in determining timely mailing/filing (IRC 7502(a)(2)(B)). Further documentation of the circumstances that resulted in the taxpayer misdirecting the returns must be considered evidence the taxpayer acted in a responsible manner and was nevertheless unable to file on time. Acceptable documentation must include all of the following:

Undue Economic Hardship related to electronic filing - When a filer fails to file electronically as required under IRC 6011(e) and 26 CFR 301.6011-2, the filer must show that they failed to file electronically because of a lack of hardware and that to meet the requirement would have caused an undue economic hardship. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ The filer must fulfill (a), (b) and (c) of the following:

Additional electronic media events that will be considered beyond the filer's control include:

In general, a filer will have acted in a responsible manner if the filer:

Correction of a failure is ordinarily considered prompt if made:

Reporting entities filing Form 1095-B or Form 1095-C will not be subject to penalties for failure to report a TIN (or for the inclusion of an incorrect TIN) if they comply with the requirements of 26 CFR 301.6724-1(e) (in the case of missing TINs) and 26 CFR 301.6724-1(f) (in the case of incorrect TINs).

Form 1098-E: An educational institution or lender required to file Form 1098-E acts in a responsible manner regarding the TINs of students if it follows the solicitation requirements in 26 CFR 1.6050S-3(f)(3). If the institution or lender does not have a record of the individual's correct TIN, 26 CFR 1.6050S-3(f)(3)(ii) requires an annual solicitation for the individual's TIN not later than December 31 of each calendar year during which the institution or lender receives payments of interest.

Form 1098-T: If an educational institution fails to comply with the new IRC 6724(f) certification requirement effective for returns required to be made, and statements required to be furnished, after December 31, 2015, the following applies: An educational institution or insurer required to file Form 1098-T acts in a responsible manner in regard to the TINs of students if it follows the solicitation requirements in 26 CFR 1.6050S-1(e)(3). If the institution or insurer does not have a record of the individual's correct TIN, 26 CFR 1.6050S-1(e)(3)(ii) requires an annual solicitation for the individual's TIN not later than December 31 of each calendar year during which the institution or insurer receives payments of, or bills for, qualified tuition and related expenses, or makes reimbursements, refunds, or reductions of such amounts respecting the individual.

See 26 CFR 301.6724-1(d) for additional information.