What is the penalty for failing to file an information return electronically when required?

The penalty for failing to file an information return electronically when it is required is established by the IRS and is designed to encourage compliance with electronic filing mandates. The correct choice highlights that the penalty is $435 per return for those who do not meet the electronic filing requirement. This figure reflects the IRS's stance that electronic filing is essential for accuracy and efficiency in processing these returns.

Understanding this penalty emphasizes the importance of adhering to IRS regulations and the cost of non-compliance, particularly for businesses and organizations that are required to file certain information returns electronically. The penalties can accumulate quickly, leading to significant financial consequences for those who do not comply with the electronic filing rules.