Definition:
In General Counsel Memorandum (GCM) 36372 Application of Section 6652(d) Penalty to Incomplete Forms 990-P and 4848, the Service considered whether section 6652(d)(1) would apply where entities required to file Forms 990-P and 4848 failed to provide all of the information required to be provided on those forms. In reaching the conclusion that the penalty is applicable under such circumstances, the GCM considers how information returns differ from income tax returns. The memo takes the position that cases concerning incomplete income tax returns are distinguishable from those concerning information returns because the goals of the two types of returns are different. Information reported on income tax returns is necessary to determine tax liability. As such, if a taxpayer omits information that is not necessary to determine tax liability, the return may be considered complete notwithstanding the omission.
Activity/ Implementation:
Examples of information returns include, but are not limited to, the following:
- Form 1099-INT (interest earned or paid)
- Form 1099-DIV (dividends, including those from stocks or mutual funds)
- Form 1099-MISC (various types of income, prizes, awards, or gross proceeds)
- Form 1099-B (stock or mutual fund sales and certain other transactions by brokers)
- Form 1099-S (proceeds from real estate transactions)
- Form 1099-K (merchant card and third party network transactions)
- Form 1098 (home mortgage interest), 1098-E (student loan interest), 1098-T (tuition)
- Form 1099-C (canceled debt)
- Form 1099-A (acquisition or abandonment of secured property)