The IRS published its final regulations around safe harbor rules for “de minimis” errors made on filed information returns and furnished payee statements. You can review the de minimis error safe harbor exceptions in sections 6721(c)(3) and 6722(c)(3). These sections were enacted in the 2015 Protecting Americans from Tax Acts Hike (PATH Act).
IRS penalties can apply for the failure to correct information returns or failure to provide accurate payee statements. No penalty will be imposed and no correction is required if an incorrect dollar amount differs from the correct amount by less than $100 (or $25 if it’s related to the amount of tax withheld).
This article is informational and does not constitute legal or financial advice. Consult with an employment lawyer or accountant for additional clarification on how these changes impact your company.