8422.193     Consequences of Incorrect Information Reporting 
(Renumbered and Revised 2/99)

Under the IRC, a state agency that fails to obtain the TIN or fails to file timely information returns is subject to a penalty of up to $50 per annual information return to a maximum of $250,000.  In addition, the state agency can be assessed a 31 percent federal backup income tax withholding on amounts that were incorrectly reported or were not withheld.  Additional penalties, fines, and interest may be assessed by the IRS and/or FTB.
Payment transactions submitted for processing without the benefit of a fully or accurately completed STD. 204 will not be processed by CALSTARS or other automated state accounting systems unless the state agency responsible has withheld federal backup and state income tax in accordance with SAM Section 8422.195.