(a) The commissioner is authorized to require that every payment settlement entity, third party settlement organization, electronic payment facilitator, or other third party acting on behalf of a payment settlement entity, all as defined in § 6050W of the Internal Revenue Code (26 U.S.C. § 6050) and referred to herein as a “reporting entity,” required to file information returns pursuant to that section shall, within thirty (30) days of the filing due date, file with the department in such form and manner as prescribed by the commissioner either a duplicate of all such information returns or a duplicate of such information returns related to taxpayers or participating payees, as defined in Section 6050W of the Internal Revenue Code, with a Tennessee address. The commissioner may require that such duplicate information returns be filed electronically.

(b) Any information received by the department on a duplicate information return filed pursuant to this section concerning a person who is not subject to tax in Tennessee may not be used by the department.

(c) Any reporting entity failing to file a duplicate information return required pursuant to this section within the time prescribed shall be subject to a penalty of one thousand dollars ($1,000) for each failure, if the failure is for not more than one (1) month, with an additional one thousand dollars ($1,000) for each month or fraction of a month during which each failure continues. The total amount of penalty imposed on a reporting entity may not exceed ten thousand dollars ($10,000) annually. The commissioner is authorized to waive the penalty imposed by this section, in whole or in part, for good and reasonable cause under § 67-1-803.