IRS De Minimis Error Safe Harbor

Published on:
December 17, 2018
Submitted to:
Internal Revenue Service
Submitted by:
SIFMA

Summary

SIFMA submitted comments on the proposed rulemaking to implement the Internal Revenue Service’s de minimis error safe harbor from information return and payee statement penalties (the “proposed rule”). SIFMA appreciates the previous opportunities for comment and many of the clarifications provided in the Preamble to the proposed rule, in particular the clarification that the safe harbor exception is calculated on an error-by-error basis rather than on the cumulative total of multiple errors. SIFMA agrees with the IRS conclusion that the payee election out of the safe harbor should not expire. These provisions provide necessary clarity and consistency for filers seeking to utilize the safe harbor.

Excerpt

Internal Revenue Service

CC:PA:LPD:PR (REG-118826-16)

Room 5203

P.O. Box 7604 Ben Franklin Station

Washington, DC 20224

Re: De Minimis Error Safe Harbor Exceptions to Penalties for Failure to File Correct Information Returns or Furnish Correct Payee Statements

To Whom it May Concern:

The Securities Industry and Financial Markets Association (“SIFMA”)1 appreciates the opportunity to comment on the proposed rulemaking to implement the Internal Revenue Service’s (“IRS”) de minimis error safe harbor from information return and payee statement penalties (the “proposed rule”). We value the previous opportunities for comment and appreciate many of the clarifications provided in the Preamble to the proposed rule, in particular the clarification that the safe harbor exception is calculated on an error-by-error basis rather than on the cumulative total of multiple errors, and we agreed with your conclusion that the payee election out of the safe harbor should not expire. These provisions provide necessary clarity and consistency for filers seeking to utilize the safe harbor. There are two specific concerns addressed in the Preamble to the proposed rule that SIFMA wishes to revisit and request additional clarification:

First, the proposed rule did not adopt a prior comment suggesting the payee’s ability to elect out of the de minimis safe harbor should apply on an account-by-account basis, and instead permits the payee to make the election with respect to each and every payee statement.

Continue Reading >

Details

Download

More Content

  • Letters
    Oct 22, 2026

    Treasury/IRS Notice 2026-49: Guidance on Section 324 of the SECURE 2.0 Act with Respect to Rollovers

    SIFMA supports modernizing retirement plan rollovers through standardized electronic processes, fraud safeguards and appropriate implementation timelines.
  • Amicus Briefs
    Oct 21, 2026

    In re USD LIBOR Litigation

  • Letters
    Oct 20, 2026

    SEC’s Proposed Rule Regulation Crypto Assets

    SIFMA and SIFMA AMG provide recommendations to the SEC on its proposed crypto asset regulation, addressing regulatory clarity, implementation and investor protection.

Get the latest trends, stats, and research on financial markets and securities.