TaxBandits Knowledge Base

Why might you receive IRS 1099/W-2 penalties?

You may incur penalties from the IRS for failing to file on time with correct information and for being unable to demonstrate reasonable cause for the failure. Penalties are more severe if your failure is willful or if it is proven that you intentionally disregarded the law.

Reasons You May Receive W-2/1099 Penalties:

• Failing to pay on time
• Failing to provide necessary information
• Failing to report a Taxpayer Identification Number (TIN)
• Omitting required information
• Filing with incorrect information
• Reporting an incorrect TIN
• Using an incorrect filing method
• Filing on paper when required to e-file
• Submitting paper forms that are not machine-readable
• Failing to furnish correct payee copies
• Fraudulent filing of Form W-2/1099

Additionally, a separate penalty applies if you fail to provide payee copies of the forms on time. The penalty amount is determined by how late you furnish the correct statement. These penalties apply to both paper and e-filing, with the charges being the same for either method.