Form 1098-F: Fines and Penalties Explained

Some people receive a Form 1098-F after a court case, a settlement, or a formal agreement about a possible violation of law. The form lists the amounts that must be paid and who ordered them. It is an information return. The payer files it with the IRS, and it gives you a copy so you can see what was reported.

This guide explains the form in plain language. It is general information, not advice on your own case or your own return. A court order or agreement is a legal document. For questions about what you owe or what you may deduct, ask a tax professional or a lawyer.

Who sends the form

The IRS instructions say the statement comes from a government entity or a nongovernmental entity. The entity acts in a suit, a court order, or an agreement about a violation or possible violation of law. The form's instructions describe it as a statement about a suit, court order, or agreement with respect to a violation or potential violation of law.

The form's own printed text shows the filer's name, address, and taxpayer number at the top.

What each box means

Box 1 shows the total amount required to be paid under the suit, order, or agreement. The IRS instructions say Box 1 is filled in when the amount is $50,000 or more.
Box 2 shows the total amount required to be paid in relation to the violation or potential violation of law.
Box 3 shows the amount identified as restitution or remediation.
Box 4 shows the amount identified as a payment to come into compliance with a law.
Box 5 shows the date the suit, order, or agreement became binding.
Box 6 shows the name of the court or other entity that entered the order or approved the agreement.
Box 7 shows the case number, if there is one.
Box 8 shows the case name or the names of the parties.
Box 9 shows a code. The IRS instructions list five codes: A for multiple payments, B for multiple payers, C for multiple payees, D for the provision of services or property required, and E for a payment amount that is not identified.

Copy B and why you may see it

Copy B is printed for the person who receives the form. The form says that this is important tax information and that it is being furnished to the IRS. Keep it with your records with the court papers or agreement.

The form does not say whether any amount is deductible. The form only reports the amounts. The tax rules for fines, penalties, and restitution are separate from the form. Those rules are in the Internal Revenue Code and in IRS publications. Read the rules that apply to your facts, or ask a tax professional.

How to check the form

Compare the form to the court order or agreement. Check the date in Box 5, the court name in Box 6, and the case number in Box 7. Check the amounts in Boxes 1 through 4 against the order. If the case name or the amount looks wrong, contact the entity that sent the form and ask for a corrected form.

Also check the code in Box 9. A code tells you whether the amounts were paid in several payments, by several payers, to several payees, or for services or property. A code can change how you read the amounts.

What the form does not tell you

The form does not explain the case. It does not tell you what happened, who was at fault, or whether an appeal is possible. Those answers are in the court papers. The form also does not show a payment plan or a deadline to pay. Look at the court order or agreement for those terms.

Next steps

Put the form with the court order, the agreement, and your payment records. Ask a tax professional if you are not sure how to report or deduct any amount. Keep your records for as long as the IRS rules require. If you have questions about the legal case itself, speak with a lawyer.

Sources: Sources: IRS, Form 1098-F (Rev. April 2025) and its Instructions for Payer (https://www.irs.gov/pub/irs-pdf/f1098f.pdf); IRS information returns page (https://www.irs.gov/Form1098F) This is general information, not advice about your specific return.

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