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Understanding Your CP162 Notice

We charged you a penalty because your partnership or s-corporation return was either late or incomplete, or you didn’t file it electronically, as required.


What you must do

  • If you agree with the penalties, mail your full payment to us by the date shown on your letter to avoid additional interest charges
  • If you think we incorrectly charged a penalty and you meet any of the criteria below, an authorized officer or partner can call us at 800-829-1040 to discuss the account:
    • We charged a penalty against the partnership for failure to file electronically and it has fewer than 101 partners or it received a waiver of the requirement to file electronically for the year in question. Be prepared to provide a copy of the waiver or evidence of the number of partners in the partnership at any time during the year.
    • We charged a penalty against the partnership or s-corporation for failure to include all required information on its return and you believe the missing information wasn’t required. Be prepared to explain why the missing information wasn’t required.
    • We charged a penalty against the partnership or s-corporation for filing late when it filed the return on time. Be prepared to fax documentary evidence of filing a timely extension, timely mailing, etc.
  • If we correctly charged the partnership or s-corporation a penalty for failure to include required information, you should submit the missing information as soon as possible. The penalty continues to accrue until we receive the missing information, for up to 12 months. If you believe the partnership or s-corporation had reasonable cause for not including the information, send a written explanation with the missing information, signed under penalty of perjury. Mail your documents to the IRS office where you filed the return. We’ll notify the partnership or s-corporation if we accept your explanation.
  • If we correctly charged the partnership or s-corporation a penalty for filing late, but you believe it had reasonable cause for doing so, you can mail a written explanation requesting abatement of the penalty to the IRS office where you filed the return. We’ll notify the partnership or s-corporation if we accept your explanation.
  • If the partnership is a small partnership of 10 or fewer partners and we assessed a penalty for filing late or for failure to include required information, it may qualify for a waiver of the penalty under Revenue Procedure 84-35. For more information, see “Revenue Procedure 84-35” in the notice.

You may want to

  • Take necessary steps to prevent a similar penalty in future years.

Answers to Common Questions

What information am I required to include in the return?
If it’s listed in the instructions for the return as required information, you must include it.

What is the penalty if I don’t include required information?
The penalty is $195 for each person who was a partner or shareholder at any time during the year, for each month or part of a month following the return due date that the information remains missing, for up to 12 months.

What if I can’t get the missing information, due to no fault of my own?
If you can’t get the missing information, you can submit a written explanation and ask for a waiver of the penalty for reasonable cause.

Who can call the IRS about this notice?
In the case of a small partnership that hasn’t designated a tax-matters partner, any partner can call us. Otherwise, only the tax matters partner or someone who the tax matters partner authorizes using Form 2848, Power of Attorney and Declaration of Representative.

In the case of a corporation, any corporate officer authorized to bind the corporation with his or her signature or anyone who the corporation’s chief officer authorizes using Form 2848.

Page Last Reviewed or Updated: 11-Jan-2017

Printable samples of this notice (.pdf)

 

 

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