There is now a $250 penalty, PER 1099, for not providing a correct 1099 when one should have been issued. This is considered an intentional disregard. There is no maximum penalty for the year.
There are also penalties for filing them late.
The tax return has 2 direct questions regarding 1099s that make it easy for the IRS to cross reference documents to verify compliance and to claim there was an intentional disregard:
- Were payments made that required a 1099 form to be filed?
- Were the 1099s filed?
Here are some of the reasons 1099 forms are required to be sent…… when you have paid the following
- Unincorporated people or businesses you paid $600 or more to
- All attorney fees paid
- Rent paid to any unincorporated person or business