A penalty may be imposed if you fail to file any correct and timely information statement with the IRS, or if you fail to furnish a correct and timely information statement to the payee. The amounts of these penalties have increased in 2011.
Both penalties are now $100 per return, reduced to $30 for returns fewer than 30 days late and to $60 for returns 30 or more days late that are filed before Aug. 1. The penalties are capped at a certain amount, depending on the amount of the per-return penalty and the gross receipts of the business. The penalties may be waived for reasonable cause or increased in cases of intentional disregard.
In summary: (1) the new information reporting requirements enacted in 2010 are not gone, as if they never existed, (2) the IRS will now receive more information about merchants who accept credit cards and (3) higher penalties will apply to businesses that do not correctly and in a timely manner file information statements.
