Penalty Fee for Corrections to 1099-B Errors

[toddway]

Does anyone know what the typical IRS penalty fees are for correcting an error in a 1099-B? The 1099-B was sent out October 2018 and I just spotted the error August 2019. The error is to the stock 'Acquired Date' which currently reads the stock was acquired in 2016 but it was actually acquired in 2013. Thank you in advance for your help. Our start-up (the acquired company) made the error in our cap table (it's what start-ups do), it was not the fault of the acquirer.

 

[Taxing Matters]

The penalty for filing an incorrect information return and not correcting it by August 1 is $270 per incorrect document, with a maximum penalty of either $3,282,500 if the average annual receipts over the last 3 years were more than $5 million and a maximum penalty of $1,094,000 if the average annual receipts over the last 3 years were $5 million or less. The penalty may be abated for reasonable cause. I suggest promptly correcting the forms and if the IRS assesses a substantial penalty for it, see a tax attorney about the possibility of seeking reasonable cause relief.

 

[toddway]

THANK YOU!! VERY HELPFUL

 

[Taxing Matters]

You're welcome. Glad you found the information useful.