June 19, 1991
TO: TAX MEMBERS NO. 20-91
OPERATIONS MEMBERS NO. 14-91
CLOSED-END FUND MEMBERS NO. 26-91
UNIT INVESTMENT TRUST MEMBERS NO. 24-91
TRANSFER AGENT ADVISORY COMMITTEE NO. 29-91
RE: IRS NEWS RELEASE ON SCHEDULE FOR 1989 INFORMATION RETURN
PENALTY NOTICES
__________________________________________________________
The attached IRS News Release announces the IRS' schedule
for mailing to payors notices asserting information reporting
penalties with respect to 1989 calendar year returns. Recently,
the IRS began sending to about 7,500 payors the names of payees
whose taxpayer identification numbers ("TINs") have been
determined by the IRS to be missing or "incorrect". The IRS is
sending the payee listings to payors in advance of the mailing of
penalty notices to provide payors with additional time to
determine whether they believe that the penalties should be
waived because failures to provide a "correct" TIN were due to
reasonable cause and not to willful neglect, as provided by
section 6724 of the Internal Revenue Code.
In late June, the IRS will send penalty notices to about
35,000 payors who failed to provide "correct" TINs, who filed
information returns "late" (i.e., after October 1, 1990 for 1989
returns) and/or who failed to file information returns on
magnetic media when required to do so. Payors will receive one
notice summarizing the forms involved, the number of returns
involved and the types of penalties assessed, with an explanation
of the penalities. Assessed penalties must be paid by payors
within 10 days from the date on the notice unless they can show
reasonable cause for their failures to comply with the Code's
information reporting requirements.
We will keep you informed of developments.
Keith D. Lawson
Associate Counsel - Tax
Attachment