Miss the January deadline and every form is two penalties — one for the IRS copy, one for the payee's. Here's the tier math, the caps, and the relief standard that actually works.
Information-return penalties are priced per document per failure — filed late with the IRS (6721) and furnished late to the recipient (6722) are separate counts. A ten-contractor shop that misses January entirely is looking at twenty penalty units, in tiers that step up at 30 days and August 1. The CP2100 (B-notice) cycle for TIN mismatches feeds the same meter, and intentional disregard — the IRS's word for 'knew and skipped it' — removes the caps entirely.
The tiers reward speed — under-30-days is a fraction of the post-August rate, and filing stops the intentional-disregard framing.
6722 is the half everyone forgets; late is still cheaper than never.
W-9 before first payment, TIN-matching before filing, B-notice procedure on CP2100s — this record IS the penalty defense.
6724 standard: events beyond control or mitigating factors + responsible action. First offense with a fixed process is a credible letter.
Every notice page explains the deadline and drafts the response letter free — find yours.
Look up your IRS notice →Per form, in lateness tiers the IRS indexes annually — roughly $60 within 30 days, about $130 by August 1, about $340 after that, with yearly caps that are lower for small businesses. Intentional disregard runs $680+ per form with no cap.
Effectively it can be: IRC 6721 penalizes the copy not filed with the IRS and IRC 6722 separately penalizes the copy not furnished to the payee. One forgotten contractor = two penalties.
No — information-return penalties sit outside FTA. The relief standard is reasonable cause under 6724: an event beyond your control or significant mitigating factors, plus evidence you acted responsibly (filed as soon as possible, fixed the process).
Incorrect-information penalties use the same tiers. The shield is the backup-withholding/B-notice procedure: solicit the TIN (W-9), follow the CP2100 B-notice steps on mismatches, and document it — that diligence is the reasonable-cause case.