Here is the law in case anyone is interested in the fine details (including the penalties listed toward the end)
It is part of the "Small Business Jobs Act of 2010"
H. R. 5297—58
Subtitle B—Revenue Provisions
PART I—REDUCING THE TAX GAP
SEC. 2101. INFORMATION REPORTING FOR RENTAL PROPERTY
EXPENSE PAYMENTS.
(a) IN GENERAL.—Section 6041 of the Internal Revenue Code
of 1986, as amended by section 9006 of the Patient Protection
and Affordable Care Act, is amended by redesignating subsections
(h) and (i) as subsections (i) and (j), respectively, and by inserting
after subsection (g) the following new subsection:
‘‘(h) TREATMENT OF RENTAL PROPERTY EXPENSE PAYMENTS.—
‘‘(1) IN GENERAL.—Solely for purposes of subsection (a)
and except as provided in paragraph (2), a person receiving
rental income from real estate shall be considered to be engaged
in a trade or business of renting property.
‘‘(2) EXCEPTIONS.—Paragraph (1) shall not apply to—
‘‘(A) any individual, including any individual who is
an active member of the uniformed services or an employee
of the intelligence community (as defined in section
121(d)(9)(C)(iv)), if substantially all rental income is derived
from renting the principal residence (within the meaning
of section 121) of such individual on a temporary basis,
‘‘(B) any individual who receives rental income of not
more than the minimal amount, as determined under regulations
prescribed by the Secretary, and
‘‘(C) any other individual for whom the requirements
of this section would cause hardship, as determined under
regulations prescribed by the Secretary.’’.
(b) EFFECTIVE DATE.—The amendments made by subsection
(a) shall apply to payments made after December 31, 2010.
SEC. 2102. INCREASE IN INFORMATION RETURN PENALTIES.
(a) FAILURE TO FILE CORRECT INFORMATION RETURNS.—
(1) IN GENERAL.—Subsections (a)(1), (b)(1)(A), and (b)(2)(A)
of section 6721 of the Internal Revenue Code of 1986 are
each amended by striking ‘‘$50’’ and inserting ‘‘$100’’.
(2) AGGREGATE ANNUAL LIMITATION.—Subsections (a)(1),
(d)(1)(A), and (e)(3)(A) of section 6721 of such Code are each
amended by striking ‘‘$250,000’’ and inserting ‘‘$1,500,000’’.
(b) REDUCTION WHERE CORRECTION WITHIN 30 DAYS.—
(1) IN GENERAL.—Subparagraph (A) of section 6721(b)(1)
of the Internal Revenue Code of 1986 is amended by striking
‘‘$15’’ and inserting ‘‘$30’’.
(2) AGGREGATE ANNUAL LIMITATION.—Subsections (b)(1)(B)
and (d)(1)(B) of section 6721 of such Code are each amended
by striking ‘‘$75,000’’ and inserting ‘‘$250,000’’.
(c) REDUCTION WHERE CORRECTION ON OR BEFORE AUGUST
1.—
(1) IN GENERAL.—Subparagraph (A) of section 6721(b)(2)
of the Internal Revenue Code of 1986 is amended by striking
‘‘$30’’ and inserting ‘‘$60’’.
(2) AGGREGATE ANNUAL LIMITATION.—Subsections (b)(2)(B)
and (d)(1)(C) of section 6721 of such Code are each amended
by striking ‘‘$150,000’’ and inserting ‘‘$500,000’’.
(d) AGGREGATE ANNUAL LIMITATIONS FOR PERSONS WITH GROSS
RECEIPTS OF NOT MORE THAN $5,000,000.—
H. R. 5297—59
(1) IN GENERAL.—Paragraph (1) of section 6721(d) of the
Internal Revenue Code of 1986 is amended—
(A) by striking ‘‘$100,000’’ in subparagraph (A) and
inserting ‘‘$500,000’’,
(B) by striking ‘‘$25,000’’ in subparagraph (B) and
inserting ‘‘$75,000’’, and
(C) by striking ‘‘$50,000’’ in subparagraph (C) and
inserting ‘‘$200,000’’.
(2) TECHNICAL AMENDMENT.—Paragraph (1) of section
6721(d) of such Code is amended by striking ‘‘such taxable
year’’ and inserting ‘‘such calendar year’’.
(e) PENALTY IN CASE OF INTENTIONAL DISREGARD.—Paragraph
(2) of section 6721(e) of the Internal Revenue Code of 1986 is
amended by striking ‘‘$100’’ and inserting ‘‘$250’’.
