TaxBandits Knowledge Base

What is the penalty for a payer who furnishes an incorrect name/TIN to the IRS?

As per the IRC Section 6721, a payer must submit the accurate information return, including the correct payee TIN.  If not, the penalty for a payer who furnishes an incorrect name or Taxpayer Identification Number (TIN) to the IRS can vary depending on the circumstances. 

Failure to File Correct Information Returns:

The penalty for failing to file a correct information return (which includes furnishing incorrect TINs) is determined based on when the corrected information is submitted.

The penalty can range from $60 per incorrect return if corrected within 30 Days to a maximum of $310 per return if corrected after August 1.

Intentional Disregard:

If a payer is found to have intentionally disregarded the requirement to furnish correct payee statements, penalties of up to $630 per return may apply.

Penalties can quickly become expensive if you file large amounts of name/TIN combinations with missing or invalid information. Therefore, it’s important for payers to verify and guarantee the accuracy of the name/TIN combinations filed on?returns.

Click here to learn how to verify a TIN Number with TaxBandits TIN Matching service.