Failure To Follow Information Reporting Requirements
Some business owners don’t file their information returns properly. The IRS will penalize an owner who doesn’t file information returns by the due date. Reporting incorrect information or omitting required information can also result in a penalty.
Failure to furnish correct payee statements. Under current IRS law, any business owner who withholds Federal income or Social Security taxes from their employees’ wages must furnish a Form W-2 to each employee. The form states the names of the employer and employee; the amount of wages subject to income tax withholding and the amount withheld; the amount of FICA wages and FICA tax withheld; and the amount, if any, of advance payment of the earned income credit. Generally, business owners should furnish W-2 Forms for a calendar year no later than Jan. 31 of the following year.
If a business owner doesn’t furnish a required statement to a payee by the required date, the IRS can penalize him. The IRS may also penalize businesses for furnishing forms that omit required information or report incorrect information.
Don’t panic
What if a business owner knows he has made a tax mistake likely to result in a penalty? First, don’t despair. The good news is that there are exceptions to these penalties. In fact, the IRS may waive them if the business owner can prove the mistakes resulted from a reasonable cause instead of willful neglect.
On a small number of information returns, correcting the errors by Aug. 1 of the year the returns are due will eliminate penalties for failing to include all the required
If you are contacted by an IRS Criminal Division Agent, you should immediately contact an attorney prior to making contact with the Agent. By speaking with the Agent, you may jeopardize your chances of success and ultimately you may prove to be your own worst witness.
Make An Appointment With An Attorney
At Easter & DeVore, Attorneys at Law, we have considerable experience handling a variety of tax-related issues. We know what’s at stake and how to protect what is most important to you.
To speak with a lawyer at our firm, call 865-566-0125 or send us an email. All initial telephone consultations at Easter & DeVore, Attorneys at Law, are free. We accept credit cards as payment for additional fees.