Do the IRS-copy and recipient-copy penalties stack when I am late on both?

Yes. Section 6721 (IRS copy) and section 6722 (recipient copy) are separate penalties, and both can apply to one form. For returns due in 2027 that means up to $60 plus $60 per return at the lowest tier, each with its own cap. Fixing the IRS copy does not fix the recipient copy.

If I correct a bad TIN before August 1, which tier applies?

If the original was filed on time, a TIN corrected by August 1 may draw no penalty at all. The 10-return exception treats up to 10 such returns, or half of 1% of your returns if that is more, as correct (IRC 6721(c)(1) and (2); IRC 6722(c) for recipient copies). Returns beyond that limit follow the timing rule. Corrected within 30 days of the required filing date, the $60 tier applies. Corrected after that but by August 1, the $130 tier applies.

How is the $5 million small-business test measured?

Average annual gross receipts for the three most recent taxable years, at or under $5 million (IRC 6721(d)). Pass it and the per-return tiers stay the same while the calendar-year caps drop. Fail it and the large-filer caps apply.

What triggers intentional disregard instead of a higher tier?

Intentional disregard is a finding about conduct, not a lateness tier (IRM 20.1.7.8.2). When the IRS finds the filer knowingly disregarded the filing or furnishing rules, the penalty for each return is the greater of $690 or 10% of the amounts that return had to report correctly, with no cap. For a 1099-B and similar returns the percentage is 5%.

Does first-time abatement work for 6721 and 6722 penalties?

No. IRM 20.1.7, the section that governs information-return penalties, offers no first-time shortcut. Its relief list is reasonable cause, statutory exceptions, administrative waivers, and IRS error. A clean history helps a reasonable-cause request but does not abate the penalty on its own.

How do I answer Notice 972CG, and how long do I have?

Respond within 45 days, 60 if you file from outside the United States, before the IRS assesses the penalty. The notice proposes a civil penalty and, for TIN failures, lists the payee records at issue. The process is described in IRM 20.1.7.6 and IRM 4.19.25.

1099 late filing penalty: what it costs

One late 1099 can draw two penalties: one for the IRS copy and one for the recipient copy. Every figure below is for returns due in 2027, which means tax year 2026, and is computed from a single table. The IRS adjusts these amounts for inflation each year.

Key facts

Within 30 days: $60 per return
31 days to August 1: $130 per return
After August 1: $340 per return
Intentional disregard: $690 or more, no cap
Large-filer cap: Up to $4,191,500 per side
Small-filer cap: Up to $1,397,000 per side
De minimis: $100 ($25 withholding)
Figures apply to: Returns due in 2027

Two penalties can apply to one form

Section 6721 penalizes failure to file a correct return with the IRS. Section 6722 penalizes failure to furnish a correct statement to the recipient. They are separate penalties with the same tier amounts, and they add up.

That means every example below is computed per side. A firm that files late and furnishes late pays the IRS-side amount and the recipient-side amount. Fixing one copy never fixes the other.

The tiers, and when each applies

The clock starts on the required filing date. Correct the return within 30 days after that date and the lowest tier applies (IRC 6721(b)(1); IRM 20.1.7.8.1). For a tax-year 2026 1099-NEC due Monday, February 1, 2027, the 30-day window closes Wednesday, March 3, 2027.

TierPer returnLarge-filer capSmall-filer cap

Corrected within 30 daysPer return: $60Large-filer cap: $698,500Small-filer cap: $244,500

Corrected after 30 days but by August 1Per return: $130Large-filer cap: $2,095,500Small-filer cap: $698,500

After August 1 or never filedPer return: $340Large-filer cap: $4,191,500Small-filer cap: $1,397,000

Intentional disregardPer return: $690 minimumLarge-filer cap: No capSmall-filer cap: No cap

After August 1 covers two cases that cost the same: a correction filed late in the year, and a return never filed at all. There is no fourth tier for giving up.

Intentional disregard is not a tier. It is a finding about conduct, and it replaces the table. Each return is tested on its own: the penalty is the greater of $690 or 10% of the amounts that return had to report correctly, with no cap (IRC 6721(e)(2)). For returns under sections 6045(a), 6050K, and 6050L, such as 1099-B, the percentage is 5%.

Source for every amount: Rev. Proc. 2025-32, which sets the section 6721 and 6722 amounts for returns due in 2027. For returns due in 2026 the per-return amounts were the same, and the caps and the $680 intentional-disregard minimum were lower (Rev. Proc. 2024-40).

The small-business caps

A filer whose average annual gross receipts for the three most recent taxable years are $5 million or less pays the same per-return tiers and faces lower calendar-year caps (IRC 6721(d)). For returns due in 2027 those caps are $244,500 at the first tier, $698,500 at the second, and $1,397,000 at the third, against $698,500, $2,095,500, and $4,191,500 for large filers.

The test looks backward from the year of the failure, and it uses gross receipts, not net income. A firm with one $6 million year inside the three-year window can still pass if the average stays at or under $5 million. Government entities other than federal ones use the large-filer table.

Three worked examples

Each example runs the same formula per side: payable is the per-return amount times the count, capped at the calendar-year maximum. Then the two sides are added.

12 NEC forms, corrected within 30 days

Per-return tier: $60 x 12 = $720
IRS side payable: $720
Recipient side payable: $720
Caps: $698,500 large, $244,500 small: neither binds
Combined: $1,440 when both copies were late

150 MISC forms, corrected in June

June lands after the 30-day window and before August 1, so the second tier applies.

Per-return tier: $130 x 150 = $19,500
Large filer, per side: $19,500 (cap $2,095,500)
Small filer, per side: $19,500 (cap $698,500)
Combined, both copies: $39,000 per filer size

2,000 INT forms, filed after August 1

Per-return tier: $340 x 2,000 = $680,000
Large filer, per side: $680,000 (cap $4,191,500, does not bind)
Small filer, per side: $680,000 (cap $1,397,000, does not bind)
Combined, both copies: $1,360,000

The intentional-disregard variant removes the cap. Say each of the 2,000 forms reports $10,000 of interest: 10% is $1,000 per return, above the $690 minimum, so each side owes $2,000,000 and both sides together owe $4,000,000. If each form reports $2,000, 10% is $200, so the minimum applies instead: $1,380,000 per side. The test runs return by return, so a batch with uneven amounts owes more than its average suggests.

This guide covers federal penalties only. Each state sets its own information-return requirements, so check the revenue department of every state you file into.

What reduces or removes a penalty

The 10-return exception: A return filed on time with missing or incorrect information counts as correct if you fix it by August 1. The exception covers up to 10 returns, or half of 1% of the returns you had to file that year if that is more (IRC 6721(c)(1) and (2)). Recipient copies furnished on time get the same exception under IRC 6722(c). It does not help a late or missing return, and it does not apply to intentional disregard.
The de minimis safe harbor: No correction is required and no penalty applies when no reported amount is off by more than $100, and no withholding amount is off by more than $25 (IRC 6721(c)(3)). A recipient can elect out of the safe harbor and ask for a corrected statement. After that request, you must correct both the IRS return and the recipient copy (IRC 6721(c)(3)(B)).
Reasonable cause: The penalty is waived when the failure was due to reasonable cause and not willful neglect (IRC 6724). The request is a written statement that names the provision, lays out every fact behind the cause, carries the filer's signature, and declares under penalties of perjury that it is true. That is IRM 20.1.7.12, and it is the main route off a penalty.
TIN solicitation: Missing TINs get their own reasonable-cause track. Solicit the TIN when the account opens. If it is still missing, the rules require up to two annual solicitations after that, not one every year forever (IRM 20.1.7.12.2.2). The rules live in Treasury Regulation 301.6724-1(e). Dated W-9 requests are evidence; silence is not.
First-time abatement: There is no first-time shortcut in IRM 20.1.7. The section's relief list is reasonable cause, statutory exceptions, administrative waivers, and IRS error. A clean compliance history helps a reasonable-cause request, because the IRS must weigh it, but history alone does not abate the penalty. Ask for reasonable cause.

Relief is claimed return by return, with the regulation behind each one: Treasury Regulation 301.6724-1 for reasonable cause and solicitation, and the General Instructions for Certain Information Returns for how the IRS applies them this season.

Extensions move the date, not the penalty

Form 8809 extends only the IRS copy. For most forms the first 30 days are automatic. For 1099-NEC there is no automatic extension: the request needs a stated reason, it must reach the IRS on time, and the IRS can refuse it.

Recipient copies need their own request on Form 15397, sent by fax only. The IRS does not accept it by mail or online, and it must arrive by the recipient due date. One extension never moves the other date.

An extension that arrives before the deadline prevents a penalty from accruing. Nothing filed after the fact removes one. The 1099 deadlines guide works through both forms date by date, and the deadline finder computes the extended date for any form.

Answering a penalty notice

Notice 972CG proposes a civil penalty; it does not assess one. For missing or incorrect TINs it arrives with a listing of the payee records at issue: on paper for 250 or fewer records, on CD or DVD above that.

Respond within 45 days, 60 if you file from outside the United States, before the IRS assesses the penalty. Send the reasonable-cause statement described above, with the facts and the supporting documents, to the address on the notice. The process is described in IRM 20.1.7.6 and IRM 4.19.25, and the IRS penalties page lists what to include when you dispute the amount.

Questions

Do the IRS-copy and recipient-copy penalties stack when I am late on both?: Yes. Section 6721 (IRS copy) and section 6722 (recipient copy) are separate penalties, and both can apply to one form. For returns due in 2027 that means up to $60 plus $60 per return at the lowest tier, each with its own cap. Fixing the IRS copy does not fix the recipient copy.
Does Form 8809 extend recipient copies, or do I need a second request?: You need a second request. Form 8809 extends only the IRS copy. Recipient copies need Form 15397, sent by fax only. The IRS does not accept it by mail or online. For 1099-NEC the 8809 extension is not automatic: it needs a stated reason and the IRS can refuse it.
If I correct a bad TIN before August 1, which tier applies?: If the original was filed on time, a TIN corrected by August 1 may draw no penalty at all. The 10-return exception treats up to 10 such returns, or half of 1% of your returns if that is more, as correct (IRC 6721(c)(1) and (2); IRC 6722(c) for recipient copies). Returns beyond that limit follow the timing rule. Corrected within 30 days of the required filing date, the $60 tier applies. Corrected after that but by August 1, the $130 tier applies.
How is the $5 million small-business test measured?: Average annual gross receipts for the three most recent taxable years, at or under $5 million (IRC 6721(d)). Pass it and the per-return tiers stay the same while the calendar-year caps drop. Fail it and the large-filer caps apply.
What triggers intentional disregard instead of a higher tier?: Intentional disregard is a finding about conduct, not a lateness tier (IRM 20.1.7.8.2). When the IRS finds the filer knowingly disregarded the filing or furnishing rules, the penalty for each return is the greater of $690 or 10% of the amounts that return had to report correctly, with no cap. For a 1099-B and similar returns the percentage is 5%.
Does first-time abatement work for 6721 and 6722 penalties?: No. IRM 20.1.7, the section that governs information-return penalties, offers no first-time shortcut. Its relief list is reasonable cause, statutory exceptions, administrative waivers, and IRS error. A clean history helps a reasonable-cause request but does not abate the penalty on its own.
How do I answer Notice 972CG, and how long do I have?: Respond within 45 days, 60 if you file from outside the United States, before the IRS assesses the penalty. The notice proposes a civil penalty and, for TIN failures, lists the payee records at issue. The process is described in IRM 20.1.7.6 and IRM 4.19.25.

Last verified September 18, 2026 against the IRS information-return penalties page, Rev. Proc. 2025-32, IRM 20.1.7, IRC sections 6721, 6722, and 6724, and Forms 8809 and 15397. Every dollar figure is computed from lib/penalties.ts, and every date from lib/deadlines.ts.

1099 penalties