IRS to Impose Penalties for Late, Improper Form 1042-S, Official Says

For over 50 years, Bloomberg BNA’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...

IRS soon will start imposing penalties for late reporting of U.S. source income of foreign persons on Form 1042-S, as well as for erroneous filing of paper versions of the form, an IRS official says. Stuart Mann, a program manager for foreign payments in IRS's Large Business and International Division, says about 2,000 instances of such problems have been discovered, and taxpayers will receive notices of penalties starting this summer. “We're not giving up on this,” he says. “The Treasury can be raided and robbed if we don't get good reporting. And we're going to get it.” Mann notes a 2010 audit by the Treasury Inspector General for Tax Administration calling for improvements to the process for refunds to nonresident aliens.