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

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.

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.

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).

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