Penalty Form 8971

I am trying to determine what the penalty for a late filed Form 8971 could be. The instructions say $50 per Form 8971 if filed within 30 days of the due date, with a maximum penalty of $532,000 (or the lower max of $186,000). For over 30 days, it is $260 per Form 8971 up to a max of $3,193,000, or the lower max of $1,064,000.

The maximum penalties don't make any sense to me. There is generally one Form 8971 per estate, right? So how could the penalty ever get to those absurd maximums? There seems to be no correlation between the max penalties and the per-form penalty. What am I missing?

Edit: I see there is also a separate penalty for failure to file Schedule A, so I see how the penalty gets multiplied for several beneficiaries. But I still don't see how the maximum penalty could possibly be applied with Form 8971.

Each beneficiary gets one that lists their respective inheritance.

Maybe they are trying to cover really big extended families.

Or more likely, note that the penalties apply to information returns in general, not just 8971s. So we are looking at all the 1099s you can dream up, W-2s, and whatever else are spelled out very specifically in the Code and regs. Take a look at the regs. under 6721, 6722, and 6724.

Nilodop that is what I was thinking. Form 8971 is a new form, so just wanted to make sure I was not missing something.