What happens if a taxpayer fails to issue Form W-2 on time?

Failing to issue Form W-2 on time can result in the employer facing fines. The Internal Revenue Service (IRS) has established deadlines for employers to provide this critical payroll information to their employees and report it to the IRS. If these deadlines are not met, the employer may be subject to penalties, which can increase if the failure to file is considered intentional or if the delay is significant.

These fines serve to encourage compliance and ensure that employees receive their W-2s promptly for their tax reporting. The penalties are typically calculated based on how late the forms are filed, and they can vary significantly depending on the length of the delay. Timely issuance is therefore crucial for employers to avoid these additional financial responsibilities.

In contrast to the other choices, no penalties being imposed would undermine the compliance framework, while the other options do not represent the consequences tied directly to the late issuance of Form W-2.