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CP162A notice: what it means and what to do
Got an IRS CP162A notice? Here is what it means, your deadline, what to check before you answer, and how to reply. Check your own letter free: it stays on your phone.
Check my CP162A notice freeWhat the IRS says this notice is about
We charged you a penalty because:
- your partnership or S corporation return was late or,
- you didn't file your return electronically, as required.
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 PDF .
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 may call.
What you need to 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 800-829-0922 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 filing late when it filed the return on time. Be prepared to fax documentary evidence of filing a timely extension, timely mailing, etc. Note: Protect yourself when sending digital data by understanding the fax service’s privacy and security policies.
- 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, it may qualify for a waiver of the penalty under Revenue Procedure (Rev. Proc.) 84-35. Note: For the purpose of this penalty a Real Estate Mortgage Investment Conduit (REMIC) is treated as a partnership, and a REMIC return (Form 1066) is treated as a partnership return.
Revenue Procedure 84-35
Reasonable cause for failure to file a timely and complete partnership return will be presumed if the partnership (or any of its partners) is able to show that all of the following conditions have been met:
- The partnership had no more than 10 partners for the taxable year. (A husband and wife filing a joint return count as one partner.)
- Each partner during the tax year was a natural person (other than a non-resident alien), or the estate of a natural person.
- Each partner's proportionate share of any partnership item is the same as his proportionate share of any other partnership item.
- The partnership did not elect to be subject to the rules for consolidated audit proceedings under Internal Revenue Code (IRC) Section 6221 through 6234.
- All partners reported their distributive share of partnership items on their timely filed income tax returns.
If all of the above conditions are met, you may return this notice with your statement, signed under penalty of perjury, that you qualify to have the penalty removed for reasonable cause under the provisions of Rev. Proc. 84-35.
The penalty can be reasserted if it was removed based on a statement with respect to Rev. Proc. 84-35, and it is later determined that such statement was false in any material respect. Additionally, a penalty for making false statements may be asserted under IRC Section 7206.
Your deadline
Answer by the date printed on your notice. If there is no date, answer as soon as you can, and call the number on the notice if you need more time.
What to check before you answer
Send the documents the IRS asks for
Make copies, number the pages, and send them so they arrive by the date on your letter. If you need more time, call before the date and ask for it.
Is this letter really from the IRS?
The IRS writes first by mail. A real letter shows a notice or letter number, your name and part of your tax ID number. The IRS does not ask for payment by gift card, crypto or wire transfer. If in doubt, sign in to your IRS online account, where many notices are listed.
You may want to
Take necessary steps to prevent a similar penalty in future years.
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 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.
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