On June 29, 2015 the penalties under Code section 6721 and 6722 for failures relating to the filing of information returns required by numerous sections of the Code, including the ACA's new reporting for health coverage providers and applicable large employers, were significantly increased. The new penalties apply to returns and statements required after December 31, 2015. This means the new penalties will apply to the 2015 Forms W-2, 1099-R, 1099-MISC, 1094-B, 1095-B, 1094-C and 1095-C that are due in early 2016.
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The reasonable cause exception to these penalties remains unchanged. Because these penalties apply separately with respect to the returns filed with the IRS and the payee, there can be a double impact on the employer. The IRS previously announced limited relief from penalties for Form 1094 and Form 1095 (the new ACA required forms to report health coverage) filed and furnished in 2016. These increased penalties provide additional incentive for applicable large employers to attempt to satisfy the good faith standard for complying with the 2015 reporting obligation.