What is the penalty for late filing of Form 8027?

You could face penalties if you don't file Form 8027 on time or if the form is inaccurate. Here’s a breakdown of the penalties and situations in which you may be penalized:

1. Failure to File on Time: If you fail to file Form 8027 on time, you may face penalties. The penalty amount depends on how late the form is filed and can range from $60 to $660 per form. However, if you can demonstrate that the delay was due to reasonable cause (such as unforeseen circumstances), the IRS may waive the penalty.

2. Failure to File a Correct Information Return:

• Incorrect Forms:  If the Form 8027 is not completed correctly, this can result in penalties. Specifically, you may be penalized if you:

  • Failing to report the tip allocations for your employees correctly.

  • Submit forms that contain errors or missing information.

• Impact on Form W-2 Filing:
  Inaccurate Form 8027 filings can directly affect your tipped employees' preparation of Form W-2, Wage and Tax Statement. Form 8027 is needed to allocate the tips properly for employees who received tips. If this is incorrect, the W-2 forms will also be incorrect, leading to further penalties for failing to report wages and taxes accurately.