📅🛑 March 31, 2025 – Penalties and Extension Options for Informational Returns

Filing informational returns late, inaccurately, or not at all can lead to civil or criminal penalties under the Internal Revenue Code (IRC).
However, the IRS provides an option to request an extension using Form 8809.

⚖️ PENALTIES FOR NONCOMPLIANCE

🧾 Civil Penalty – IRC Section 6721

This applies if you fail to file correct information returns by the due date without reasonable cause.

• Amount: Up to $630 per return for the 2024 tax year

• Maximum annual penalty: Can reach into the millions for large filers

• Applies to:

  • Failing to file

  • Filing late

  • Filing with incorrect TINs or missing information

  • Filing paper returns when e-filing is required

💡 Graduated Scale: Penalties may be reduced if the return is filed within 30 days or by August 1st.

🚨 Criminal Penalty – IRC Section 7201

For willful failure to file or for fraudulent behavior, criminal charges may apply.

• Charge: Tax Evasion

• Penalty:

  • Up to $100,000 fine for individuals ($500,000 for corporations)

  • Imprisonment for up to 5 years

  • Or both, plus prosecution costs

💡 This is typically reserved for intentional acts such as knowingly avoiding reporting income or filing false documents.

⏳ EXTENSION TO FILE

🧾 Form 8809 – Application for Extension of Time to File Information Returns

If more time is needed to file returns electronically, Form 8809 can be submitted to request an extension.

• Applies to:

  • Forms 1099, 1098, W-2G, 3921, 3922, 5498, and others

• Filing deadline: Must be submitted on or before the original due date (i.e., March 31, 2025 for electronic filers)

⌛ How much time does it grant?

• A 30-day automatic extension for most information returns

• A second 30-day extension may be available, but it’s not automatic (requires justification)

💡 Form 8809 can be filed electronically or by paper, but for bulk filers, electronic is preferred.