Ezel / IRS Rulings / 201503013
Chief Counsel Advice 201503013 Released January 16, 2015 Advice

No information-return penalties when withholding was reported correctly

Apply this to your situation

This page covers one taxpayer's ruling from 2015, which can't be cited as precedent. Ezel answers your situation under the current Code and IRS guidance, with citations.

Currency note: this determination was released in 2015
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel advised that penalties under IRC §§ 6721 and 6722 generally could apply to errors on Forms 1042-S. Here, however, the withholding agent correctly reported in Box 7 the amounts it actually withheld. The IRS therefore should not assess those information-return and payee-statement penalties in the investigation.

Ruling snapshot

  • Question: Should the withholding agent face penalties under IRC §§ 6721 and 6722 for its Forms 1042-S?
  • Outcome: Advice given not to assess penalties
  • Key authorities: IRC §§ 1461, 6721, and 6722; Instructions for Form 1042-S

Full text (IRS public release)

ID: CCA_2014122413065046
UILC: 6721.00-00, 6722.00-00, 1461.00-
00
Number: 201503013
Release Date: 1/16/2015
From:
Sent: Wednesday, December 24, 2014 1:06:50 PM
To:
Cc:
Bcc:
Subject: RE: 6721 and 6722 question

---------,

                                                             .

As a general matter, the calculation of the penalties under sections 6721 and 6722 would
be correct if there were errors on the Forms 1042-S filed by the withholding
agent. However, based on the information provided, the withholding agent correctly
reported the amounts actually withheld in Box 7 on its Forms 1042-S. See Instructions
for Form 1042-S, p. 14. The IRS should therefore not assess penalties against the
withholding agent under sections 6721 and 6722 with regard to this investigation.

Please let me know if you have any questions.

Regards,

-------------

--------------

---------------------------------------

Get today's answer for your situation

You just read what the IRS ruled for one taxpayer in 2015, and it can't be cited as precedent. Ezel checks the current Internal Revenue Code and IRS guidance and answers your specific situation, with citations.

Opens in Ezel Pro. Every answer cites the authority it relies on.