Form W-2c penalties apply only after the filing and furnishing deadlines

Plain-English summary

An IRS employee asked whether penalties under IRC §§ 6721 and 6722 could be imposed when an employer did not file corrected wage statements at the end of an audit. Chief Counsel advised that the employer still had until January 31 of the year after the audit concluded to file and furnish Forms W-2c. The IRS therefore could not impose the penalties merely because the forms were not provided when the audit ended. The penalties could be imposed if the employer failed to file and furnish the corrected forms by the applicable deadline.

Ruling snapshot

• Question: Can the IRS impose information-return penalties when an employer has not filed Forms W-2c by the end of an audit?
• Outcome: Advice given, the penalties apply only if the employer misses the later filing and furnishing deadlines
• Key authorities: IRC §§ 6721 and 6722; Treas. Reg. §§ 31.6051-1(c), 31.6051-1(d), 31.6051-2(b), and 31.6071(a)-1

Full text (IRS public release)

ID:          CCA_2016052317064710
UILC:        6721.00-00, 6722.00-00

Number: 201629008
Release Date: 7/15/2016
From:
Sent: Monday, May 23, 2016 5:06:47 PM
To:
Cc:
Bcc:
Subject: Question regarding Forms W-2c


You asked whether the IRS can assert the 6721/6722 penalties against a taxpayer for
not filing a Form W-2c, Corrected Wage and Tax Statement, at the conclusion of an
audit. Under the regulations, the employer will have until January 31 of the year
following the year in which the audit concludes to file (PATH Act change in due date –
was previously the last day of February for paper and March 31 for electronic filing) and
January 31 to furnish Forms W-2c. See Treas. Reg. 31.6051-1(c), 31.6051-1(d),
31.6051-2(b), and 31.6071(a)-1. Thus, the IRS cannot assert the 6721/6722 penalties
against the employer for failure to file and furnish Forms W-2c at the conclusion of an
audit. However, the IRS can assert the penalties if the employer fails to file and furnish
the Forms W-2c by the due date.

Note that some relevant background material can be found in IRM 4.23.9.12.6(1) (04-
01-2011) Q&As 5-7, as well as IRM 4.23.8.10.2 (10-26-2015) Delinquent Forms W–
2/W–2c Not Secured by Examiner and IRM 4.23.10.15 (09-25-2015) Securing Form W-
2 or W-2c.

Please let me know if you have any questions.

Best,
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