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IRS Form 1098-F | Fines, Penalties, and Other Amounts

FAQs answered by IDES

What is this form?

Federal law requires governmental agencies, such as the Illinois Department of Employment Security (IDES), to file an IRS Form 1098-F in certain situations to report penalties paid by a taxpayer, or which are owed as a result of a court order or an agreement that is entered into between the taxpayer and IDES.  The Form 1098-F must be sent to the taxpayer as well as filed with the IRS. See 26 CFR § 6050X.

Note: The Form 1098-F is not a notice that you owe any money to IDES.

 

Why am I receiving this form?

You will receive this form from IDES if any of these facts apply to you during a year:

  • You enter into an agreement with IDES for $50,000 or more, and a part of the amount owed to IDES is for penalties.
  • A court order establishes that you owe IDES $50,000 or more, and a part of the amount owed to IDES is for penalties.
  • You make a payment to IDES for $50,000 or more that is not related to an agreement or a court order, and a part of the payment is for penalties.

 

How are the amounts reported on the 1098-F form calculated?

IDES is sending only one Form 1098-F to taxpayers for each calendar year.  So, if there is more than one applicable agreement, court order, or payment during a year, they are combined into one 1098-F form.  Let’s look at an example:

  • Employer A enters into an agreement to pay IDES $61,000, of which $1,000 is for penalties.  This information must be reported on a Form 1098-F whether the $61,000 is paid or not that year.
  • In the same year, Employer A makes a $52,000 payment that is not part of and not related to the $61,000 owed under the agreement. $2,000 of this payment is for penalties.  This information must also be reported on a Form 1098-F.
  • Box 1 of Form 1098-F will show the total amount required to be paid of $113,000 ($61,000 + $52,000).
  • Box 2 of the Form 1098-F will show the total penalties required to be paid of $3,000 ($1,000 + $2,000).
  • Box 4 of the Form 1098-F will show the difference of Box 1 minus Box 2 ($113,000 - $3,000 = $110,000).

 

What should I do if I think the amount on my form is incorrect or that I shouldn't be receiveing this?

If you have questions or do not agree with the amounts reported, please write or call IDES on weekdays between 8:30 a.m. and 4:30 p.m.

 

ILLINOIS DEPARTMENT OF EMPLOYMENT SECURITY
PO BOX 19300
SPRINGFIELD IL 62794-9300

(800) 247-4984, option 2
TTD (800) 526-0844