It is easy to forget about the filing of 1099’s.  More information about the rules for restaurant and bar owners will be in a future edition of the Kallas Insider’s Report but, since it is tax season, I thought I would show you how the penalties can add up.

Late filing penalties:

$50 per 1099, if filed within 30 dates of due date.  Maximum penalty $197,500.

$110 per 1099, if filed more than 30 days but by August 1.  Maximum penalty $585,000.

$280 per 1099, if filed after August 1.  Maximum penalty $1,130,500.

Penalties for not filing correct information returns (Code Section 6721) may apply if you:

• Don’t file a correct information return by the due date and a reasonable cause is not shown;
• File on paper when you were required to file electronically;
• Don’t report a Taxpayer Identification Number (TIN);
• Report an incorrect TIN; or
• Don’t file paper forms that are machine-readable.

Penalties for not providing correct payee statements (Code Section 6722) may apply if:

• You don’t provide a correct payee statement by the applicable date and a reasonable cause isn’t shown;
• All required information isn’t shown on the statement; or
• Incorrect information is included on the statement.