Medical device tax late payments to be waived for most of 2013

| | Health Exec | Policy & Regulations

The Internal Revenue Service (IRS) will waive late payment penalties on the medical device tax for the first nine months of 2013, according to new regulations. However, late payment penalties will only be waived in situations where a company has reasonable cause.

The industry has fought hard against the upcoming medical excise tax, because it will be a signficant burden for many medical device companies. Companies will be required to make semi-monthly payments of the 2.3 percent tax. The tax will be levied against total sales at a medical device company.

According to the regulations, companies are required to make the first deposit for the tax on January 29th, 2013. The first payment will cover all sales from Jan. 1, 2013, to Jan. 15, 2013. In the fourth quarter of next year, the late payment penalty will go into full effect.

To qualify for amnesty from the late payment penalty, companies will be required to demonstrate that they made a “good faith attempt to comply with requirements ... and that the failure was not due to willful neglect."

 

 

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