rp-16-11.pdf

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26 CFR 601.602: Tax forms and instructions.
(Also Part I, §§ 6651, 6652, 6695, 6698, 6699, 6721, 6722)

Rev. Proc. 2016-11

Table of Contents
SECTION 1. PURPOSE
SECTION 2. LEGISLATIVE HISTORY
SECTION 3. 2015 PENALTY ADJUSTED ITEMS Code Section
.01 Failure to File Tax Return 6651
.02 Failure to file Certain Information Returns, Registration 6652
Statements, etc.

.03 Other Assessable Penalties With Respect to 6695
the Preparation of Tax Returns for Other Persons

.04 Failure to File Partnership Return 6698

.05 Failure to File S Corporation Return 6699

.06 Failure to File Correct Information Returns 6721

.07 Failure to Furnish Correct Payee Statements 6722

SECTION 4. CORRECTION OF SECTION 3.48(3) OF REV. PROC. 2015-53
SECTION 5. EFFECTIVE DATE
SECTION 6. DRAFTING INFORMATION

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SECTION 1. PURPOSE
Rev. Proc. 2015-53, I.R.B. 2015-44, provides inflation-adjusted items for 2016 for
certain Civil Penalties under the Internal Revenue Code (§§ 6651, 6652(c), 6695, 6698,
6699, 6721 and 6722) for returns and statements required to be filed after December
31, 2016. This revenue procedure sets forth inflation-adjusted items for 2015 for certain
Civil Penalties under the Code (§§ 6651, 6652(c), 6695, 6698, 6699, 6721, and 6722)
for returns and statements required to be filed after December 31, 2015. In addition,
this revenue procedure corrects section 3.48(3), Failure to File Correct Information
Returns, of Rev. Proc. 2015-53.
SECTION 2. LEGISLATIVE HISTORY
Section 2102 of the Small Business Jobs Act of 2010, Pub. L. 111-240, 124 Stat.
2504, provides that for each fifth calendar year beginning after 2012, the penalty under
§ 6721, Failure to File Correct Information Returns, and the penalty under § 6722,
Failure to Furnish Correct Payee Statements, will be adjusted for inflation.
Section 208 of the Tax Increase Prevention Act of 2014, Achieving a Better Life
Experience (ABLE) Act, Pub. L. 113-295, 128 Stat. 4010, provides for inflation
adjustments for certain Civil Penalties under the Code (§§ 6651, 6652(c), 6695, 6698,
6699, 6721, and 6722) for returns and statements required to be filed after December
31, 2014. For returns and statements required to be filed after December 31, 2015,
Section 806 of the Trade Preferences Extension Act of 2015, Pub. L. 114-27, 129 Stat.
362, increased the tax penalties for failure to file correct information returns and furnish
correct payee statements under §§ 6721 and 6722, respectively.

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SECTION 3. 2015 PENALTY ADJUSTED ITEMS
.01 Failure to File Tax Return. For taxable years beginning in 2015, the amount of the
additional tax under § 6651(a) for failure to file a tax return within 60 days of the due
date of such return (determined with regard to any extensions of time for filing) shall not
be less than the lesser of $135 or 100 percent of the amount required to shown as tax
on such returns.
.02 Failure to File Certain Information Returns, Registration Statements, etc. For
taxable years beginning in 2015, the penalty amounts under § 6652(c) are:
(1) for failure to file a return required under § 6033(a)(1) (relating to returns by
exempt organization) or § 6012(a)(6) (relating to returns by political organizations):
Scenario Daily
Penalty
Maximum Penalty
Organization (§ 6652(c)(1)(A)) $20 Lessor of $10,000 or
5% of gross receipts
of the organization for
the year.
Organization with gross receipts exceeding
$1,015,500 (§ 6652(c)(1)(A))

$100

$50,500
Managers (§ 6652(c)(1)(B)) $10 $5,000
Public inspection of annual returns and reports
(§ 6652(c)(1)(C))
$20 $10,000
Public inspection of applications for exemption and
notice of status (§ 6652(c)(1)(D))
$20 No Limits

(2) for failure to file a return required under § 6034 (relating to returns by certain
trust) or § 6043(b) (relating to terminations, etc., of exempt organizations):
Scenario Daily Penalty Maximum
Penalty
Organization or trust (§ 6652(c)(2)(A)) $10 $5,000
Managers (§ 6652(c)(2)(B)) $10 $5,000
Split-Interest Trust (§ 6652(c)(2)(C)(ii)) $20 $10,000

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Any trust with gross receipts exceeding $253,500
(§ 6652(c)(2)(C)(ii))

$100

$50,500

(3) for failure to file a disclosure required under § 6033(a)(2):
Scenario Daily Penalty Maximum
Penalty
Tax–exempt entity (§ 6652(c)(3)(A)) $100 $50,500
Failure to comply with written demand
(§ 6652(c)(3)(B)(ii))
$100 $10,000

.03 Other Assessable Penalties With Respect to the Preparation of Tax Returns for
Other Persons. For taxable years beginning in 2015, the penalty amounts under § 6695
are:
Scenario Per Return or
Claim for Refund
Maximum
Penalty
Failure to furnish copy to taxpayer (§ 6695(a)) $50 $25,000
Failure to sign return (§ 6695(b)) $50 $25,000
Failure to furnish identifying number (§ 6695(c)) $50 $25,000
Failure to retain copy or list (§ 6695(d)) $50 $25,000
Failure to file correct information returns (§ 6695(e)) $50 per return or
item in return
$25,000
Negotiation of check (§ 6695(f)) $505 per check No limit
Failure to be diligent in determining eligibility for
earned income credit (§ 6695(g))
$505 No limit

.04 Failure to File Partnership Return. For taxable years beginning in 2015, the dollar
amount used to determine amount of the penalty under § 6698(b)(1) is $195.
.05 Failure to File S Corporation Return. For taxable years beginning in 2015, the
dollar amount used to determine amount of the penalty under § 6699(b)(1) is $195.
.06 Failure to File Correct Information Returns. For taxable years beginning in 2015,
the penalty amounts under § 6721 are:

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(1) for persons with average annual gross receipts for the most recent three
taxable years of more than $5,000,000, for failure to file correct information returns are:
Scenario Penalty Per Return Calendar Year
Maximum
General Rule (§ 6721(a)(1)) $260 $3,178,500
Corrected on or before 30 days after required
filing date (§ 6721(b)(1))

$50

$529,500
Corrected after 30
th
day but on or before
August 1 (§ 6721(b)(2))

$100

$1,589,000

(2) for persons with average annual gross receipts for the most recent three
taxable years of $5,000,000 or less, for failure to file correct information returns are:
Scenario Penalty Per Return Calendar Year
Maximum
General Rule (§ 6721(d)(1)(A)) $260 $1,059,500
Corrected on or before 30 days after required
filing date (§ 6721(d)(1)(B))

$50

$185,000
Corrected after 30
th
day but on or before
August 1 (§ 6721(d)(1)(C))

$100

$529,500

(3) for failure to file correct information returns due to intentional disregard of the
filing requirement (or the correct information reporting requirement) are:
Scenario Penalty Per Return Calendar Year
Maximum
Return other than a return required to be filed
under §§ 6045(a), 6041A(b), 6050H, 6050I,
6050J, 6050K, or 6050L (§ 6721(e)(2)(A))
Greater of (i) $520,
or (ii) 10% of
aggregate amount of
items required to be
reported correctly
No limit
Return required to be filed under §§ 6045(a),
6050K, or 6050L (§ 6721(e)(2)(B))
Greater of (i) $520,
or (ii) 5% of
aggregate amount of
items required to be
reported correctly

No limit

Return required to be filed under § 6050I(a) Greater of (i) No limit

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(§ 6721(e)(2)(C)) $26,480, or (ii)
amount of cash
received up to
$105,500

Return required to be filed under § 6050V
(§ 6721(e)(2)(D))
Greater of (i) $520,
or (ii) 10% of the
value of the benefit of
any contract with
respect to which
information is
required to be
included on the
return

No limit

.07 Failure to Furnish Correct Payee Statements. For taxable years beginning in
2015, the penalty amounts under § 6722 are:
(1) for persons with average annual gross receipts for the most recent three
taxable years of more than $5,000,000, for failure to file correct payee statements are:
Scenario Penalty Per Return Calendar Year
Maximum
General Rule (§ 6722(a)(1)) $260 $3,178,500
Corrected on or before 30 days after required
filing date (§ 6722(b)(1))

$50

$529,500
Corrected after 30
th
day but on or before
August 1 (§ 6722(b)(2))

$100

$1,589,000

(2) for persons with average annual gross receipts for the most recent 3 taxable
years of $5,000,000 or less, for failure to file correct payee statements are:
Scenario Penalty Per Return Calendar Year
Maximum
General Rule (§ 6722(d)(1)(A)) $260 $1,059,500
Corrected on or before 30 days after required
filing date (§ 6722(d)(1)(B))

$50

$185,000
Corrected after 30
th
day but on or before
August 1 (§ 6722(d)(1)(C))

$100

$529,500

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(3) for failure to file correct payee statements due to intentional disregard of the
requirement to furnish a payee statement (or the correct information reporting
requirement) are:
Scenario Penalty Per Return Calendar Year
Maximum
Statement other than a statement required
under §§ 6045(b), 6041A(e) (in respect of a
return required under § 6041A(b)), 6050H(d),
6050J(e), 6050K(b), or 6050L(c)
(§ 6722(e)(2)(A))
Greater of (i) $520,
or (ii) 10% of
aggregate amount of
items required to be
reported correctly
No limit
Payee statement required under §§ 6045(b),
6050K(b), or 6050L(c) (§ 6722(e)(2)(B))
Greater of (i) $520,
or (ii) 5% of
aggregate amount of
items required to be
reported correctly

No limit

SECTION 4. CORRECTION OF SECTION 3.48(3), FAILURE TO FILE CORRECT
INFORMATION RETURNS, OF REV. PROC. 2015-53.
For taxable years beginning in 2016, section 3.48(3) of Rev. Proc. 2015-53
provides the penalty amounts under § 6721 for failure to file correct information returns
due to intentional disregard of the filing requirement (or the correct information reporting
requirement). The scenario for a return required to be filed under § 6050V
(§ 6721(e)(2)(D)) is corrected to provide as follows :
Scenario Penalty Per Return Calendar
Year
Maximum
Return required to be filed under § 6050V
(§ 6721(e)(2)(D))
Greater of (i) $530, or
(ii) 10% of the value of
the benefit of any
contract with respect to
No limit

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which information is
required to be included
on the return

SECTION 5. EFFECTIVE DATES
Section 3 of this revenue procedure applies to taxable years beginning in 2015.
Section 4 of this revenue procedure applies to taxable years beginning in 2016.
SECTION 6. DRAFTING INFORMATION
The principal author of this revenue procedure is William Ruane of the Office of
Associate Chief Counsel (Income Tax & Accounting). For further information regarding
this revenue procedure, contact Mr. Ruane at (202) 317-4718 (not a toll-free call).