September 1, 2015
The Trade Preferences Extension Act of 2015 was recently signed into law. Part of this new law includes a provision that more than doubles the cap on penalties from $1.5 million to $3 million for 1) failure to file correct tax information returns and 2) failure to provide payee statements. In both cases, fines have been increased from $100 to $250.
These changes are effective for returns and statements required to be filed after December 31, 2015.
The impact of these increased penalties is likely to be significant given that the penalties apply to a wide range of information returns and statements, including W-2s, 1099s, and Forms 1042 and 1042-S (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons). In addition, the IRS has formed special units to address information reporting issues both within the Large Business and International (LB&I) Division and within the Office of Associate Chief Counsel (International). These actions may suggest heightened IRS interest in information reporting audits that could lead to adjustments to which the increased penalties would apply.
In light of these changes, it is critical that businesses be vigilant about filing information returns and providing payee statements to all applicable parties. If you have any questions about these requirements related to your business or your personal situation, please contact our firm.
This tax season is an important one for many business owners because it’s the first that will be impacted by the Tax Cuts and Jobs Act (TCJA). How big of an impact is dependent on your unique situation. We’ve compiled this short list of provisions that may affect the business community:
According to Forbes.com, Super Bowl viewers traditionally load up on millions of pounds of less-than-healthy foods during the big game—including ribs, pulled pork, tortilla chips, nuts, popcorn and bacon—all washed down with beer (the Super Bowl beverage of choice). If you are trying to stick to your New Year’s resolution to eat better, consider a few healthy substitutes for the traditional Super Bowl eats:
The combination of running a business and your life and preparing for tax time can drive some people into a slight panic. But no need to get stressed if you are prepared. Now is the time to start organizing all documents required to file your tax return.