What penalties apply if an employer fails to timely file required information under Sections 6055 and 6056?

Author: Gloria Ju

The following actions may trigger employer penalties:

  • Failing to timely file information returns or furnish employee statements;
  • Failing to include all the required information; and
  • Including incorrect information.

An employer may be penalized $260 for each failed information return, up to a total penalty of $3.193 million in a calendar year. An employer may also be penalized $260 for each failed employee statement, up to a total penalty of $3.193 million in a calendar year. Per-statement and per-year amounts may be increased if an employer intentionally disregards the reporting requirements.

The IRS provides temporary transition relief for 2016 information returns filed in 2017. The IRS will not penalize employers that file returns with incomplete or incorrect information if the employer made a good-faith effort to comply. This relief does not apply to an employer that fails to comply, fails to timely comply or fails to comply in good faith.