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In the two sentences below, that has the same meaning, is the first one incorrect or is it just less formal than the second?

i) I recommend you to take a vacation.

ii) I recommend that you take a vacation.

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Nalini Rajeev is the first one incorrect

Yes, if it is supposed to mean the same as (ii).

(It could conceivably be correct -- or less wrong anyway -- if the speaker is recommending which person should take a vacation, but this is an unusual meaning and not likely to be intended.)