A wrong claim draws a $500 penalty, or $1,000 for fraud
What the document says“if such election was made due to negligence or disregard of the rules or regulations, there shall be imposed a penalty of $500, or”
The section adds a new section 6659 to the Internal Revenue Code of 1986 imposing a $500 penalty where an election under section 6434 is made for someone who is not an eligible child through negligence or disregard of the rules, and a $1,000 penalty where it is made through fraud, with negligence and disregard taking the meaning they have in section 6662. It also adds a new subparagraph (AA) to section 6213(g)(2) treating the omission of a correct social security number as a mathematical or clerical error.
What the document actually says“if such election was made due to negligence or disregard of the rules or regulations, there shall be imposed a penalty of $500, or”
A careless claim draws a fine of $500. That covers a claim made by not following the rules.
A claim made on purpose to cheat draws $1,000. The claim must be for a child who does not qualify. A missing number counts as a math error.
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