How long do I have to respond to IRS CP162B?

Pay or dispute by the date on the notice. Check the date and any response deadline printed on your notice, and follow the notice's instructions.

What should I do if I received IRS CP162B?

Decide whether the penalty is correct, then pay it or have an authorized partner or officer dispute it before the date on the notice. If you are unsure, have a tax professional review the letter before you respond to the IRS.

IRS CP162B Notice: Partnership or S Corp Return Penalty

The IRS charged your partnership or S corporation a penalty for an incomplete return or for not filing electronically. Pay it or dispute it by the date on the notice.

What This Notice Means

The IRS charged a penalty against your partnership or S corporation. A CP162B goes out for one of two reasons. The return was incomplete, or the entity didn't file electronically when it was required to.

This is a penalty on the business entity. Read the notice to see which problem the IRS found.

What to Do

If you agree with the penalty, pay it in full by the date on the notice. Paying on time stops additional interest.

If the return left out required information, send that information as soon as possible. This penalty keeps running until the IRS gets the missing information, for up to 12 months. It's figured per partner or shareholder, per month, so it adds up quickly. Mail the documents to the IRS office where you filed the return.

Required information means anything the return instructions list as required.

If You Disagree

An authorized officer or partner, or a representative authorized on Form 2848, can call the number on your notice if:

The penalty was for not filing electronically, and the partnership wasn't required to e-file that year or had a waiver. Have the waiver or proof of the number of partners ready.
The penalty was for missing information, and you believe that information wasn't required. Be ready to explain why.

If the penalty was correct but the entity had reasonable cause, mail a written explanation with the missing information, signed under penalty of perjury. The IRS will tell the entity if it accepts the explanation. If you can't get the missing information through no fault of your own, explain that in writing and ask for a reasonable cause waiver.

Small Partnership Relief

A partnership with 10 or fewer partners may qualify for relief from the missing-information penalty under Revenue Procedure 84-35. Reasonable cause is presumed if all of these are true:

No more than 10 partners for the year. A married couple filing jointly counts as one partner.
Each partner was a natural person (not a nonresident alien) or the estate of a natural person.
Each partner's share of every partnership item was the same.
The partnership didn't elect into the consolidated audit proceedings rules.
All partners reported their shares on timely filed returns.

If you qualify, return the notice with a statement signed under penalty of perjury saying so. Get it right. A materially false statement lets the IRS reassert the penalty and charge a separate penalty for false statements.

If your partnership or S corporation received a CP162B and you want the penalty challenged, call us at (813) 229-7100.