Form 1099 COVID Information Return Penalty Refund

Form 1099 information return penalties under §6721 (failure to file) and §6722 (failure to furnish) assessed during Jan 20, 2020 – July 10, 2023 may be eligible for refunds under Kwong. These penalties stack per missed filing and can be substantial for high-volume filers. File Form 843 by July 10, 2026. Refund eligibility is not guaranteed; Kwong is being appealed.

Who qualifies

Businesses that issue Forms 1099 to contractors, vendors, or other payees can be assessed §6721 (failure to file with IRS) or §6722 (failure to furnish to recipient) penalties. As of 2023 these penalties run from $60 to $310 per missed filing, with intentional disregard reaching $630 per filing. For high-volume filers, these stack quickly. Penalties assessed during the disaster window may be eligible under Kwong.

• Account transcript shows §6721 or §6722 penalty assessments dated between Jan 20, 2020 and July 10, 2023.
• The underlying 1099s were due (typically Jan 31 to recipients, Feb 28 paper / Mar 31 electronic to IRS) within the disaster window.
• Penalty applies regardless of which 1099 variant (1099-NEC, 1099-MISC, 1099-INT, 1099-DIV, etc.) was late or unfiled.

How much could I get back?

1099 penalty exposure scales with filing volume. A filer that missed 50 forms by more than 30 days could face $5,000+ in stacked penalties; a high-volume filer that missed hundreds of forms could face tens of thousands. Multiple years compound. Refund eligibility and amounts cannot be guaranteed.

Why this specifically

1099 penalties are commonly underclaimed in refund analyses because they're often charged to the AP or finance function rather than tax. Companies that paid §6721/§6722 penalties on autopilot during the pandemic may have substantial recoverable amounts. The per-filing structure makes Kwong-based claims particularly leverageable here.

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