Section 7434 - Civil damages for fraudulent filing of information returns

5 Analyses of this statute by attorneys

  1. Coleman Issues Tax Tip: Determining Worker Status

    King, Krebs, & Jurgens, PLLCJ. Grant ColemanMay 17, 2017

    In Derolf, et al v. Risinger Bros. Transfer, Inc., 119 AFTR 2d ¶ 2017-692, an Illinois Federal District Court case, workers for a business claimed misclassification as independent contractors rather than employees and among their claims made an allegation that the business violated IRC §7434 by purposefully misclassifying them and willfully filing fraudulent information returns by issuing them 1099 returns instead of W-2 returns. Under §7434, a recipient of a 1099 has a civil right of action against the issuer of a 1099 which is determined to be willfully fraudulent, and can recover any damages incurred.

  2. Federal Appellate Court Affirms Dismissal Of Widow’s Action For Damages Against Trustees For Filing Fraudulent Information Return

    Bryan Cave LLPTiffany McKenzieOctober 10, 2013

    Update: On October 1, 2013, in Vandenheede v.Vecchio,the U.S. Court of Appeals for the Sixth Circuit affirmed the U.S. District Court for the Eastern District of Michigan’s judgment for the Defendants Vecchio and Borschke. Plaintiff Mary C. Vandenheede sued Defendants alleging tax fraud under 26 U.S.C. § 7434. The district court granted Defendants’ motion for summary judgment based on the fact that violations of 26 U.S.C. § 7434(a) fall on the “filer,” and not on every person involved in preparing the return.

  3. Restaurant’s Accountants Not Responsible For Employee’s Allegedly False Form W-2

    Varnum LLPJuly 18, 2013

    What is an employee to do, when he receives an incorrect Form W-2? Based on the recent decision inSwartwout v. Edgewater Grill LLC, No. 12-cv-130, the employee should not file a lawsuit for damages against the employer's accounting firm under the Internal Revenue Code, 26 U.S.C. § 7434. In Swartwout, the plaintiff sued his former employer (a restaurant), the restaurant's owners, and the restaurant's accountants for allegedly submitting a fraudulent Form W-2 for plaintiff's yearly wages.The plaintiff filed his lawsuit under § 7434, which allows damages against "any person [who] willfully files a fraudulent information return with respect to payments purported to be made to any other person."

  4. Court Dismisses Widow’s Action For Damages Against Trustees For Allegedly Fraudulent Information Return

    Bryan Cave LLPSteve DawsonApril 5, 2013

    Any person, including a corporation, partnership, individual, estate, and trust, who makes a payment (such for as rent, wages, salaries, and annuities) must file an information return with the IRS to report the payment. But what happens if a false information return is filed with the IRS?In 1996, Congress enacted 26 U.S.C. § 7434(a), which gives victims of fraudulent filing activities a damage remedy against the perpetrators. The provision applies whenever “any person willfully files a fraudulent information return with respect to payments purported to be made to any other person.”

  5. Court Dismisses Widow’s Action for Damages Against Trustees for Filing Fraudulent Information Return

    Bryan Cave LLPTiffany McKenzieApril 3, 2013

    Any person, including a corporation, partnership, individual, estate, and trust, who makes a payment (such for as rent, wages, salaries, and annuities) must file an information return with the IRS to report the payment. But what happens if a false information return is filed with the IRS?In 1996, Congress enacted 26 U.S.C. § 7434(a), which gives victims of fraudulent filing activities a damage remedy against the perpetrators. The provision applies whenever “any person willfully files a fraudulent information return with respect to payments purported to be made to any other person.”