What is the penalty for failure to file a complete or timely annual report?

• A. An amount up to 10% of the increase not timely filed or $5000, whichever is less, for each 30 days or portion thereof.
• B. An amount up to 5% of the incurred liability in the last report or $1500, whichever is less.
• C. An amount up to 20% of the increase not timely filed or $10000, whichever is less, for each 30 days or portion thereof.
• D. An amount up to 15% of the increase not timely filed or $7500, whichever is less, for each 30 days or portion thereof.

Answer: (A)

Penalties for a late or incomplete annual report are assessed for each 30-day period (or portion thereof) the report is overdue. For every such period, the amount is the smaller of 10% of the increase that was not timely filed or $5,000. In other words, each late 30-day interval can incur up to $5,000 if the 10% of the late increase would exceed that cap, or the actual 10% of the late increase if that amount is below $5,000.

For example, if the late increase is $40,000, 10% equals $4,000, so the penalty per 30-day period is $4,000. If the late increase is $60,000, 10% is $6,000, but the cap makes the penalty $5,000 per period. If the late period lasts two 30-day intervals, you would multiply accordingly (e.g., two periods of $4,000 each for a $40,000 increase, or two periods of $5,000 each for a $60,000 increase).