What CP169 means
CP169 is short and to the point. The IRS says it is missing your return. It asks you to send the return, either your original signed copy or a newly completed one, so the IRS receives it by the due date on the notice.
The IRS page for CP169 refers callers to the number on the notice for help with your business return, so expect this notice in connection with a business filing. The notice itself identifies which return and which period.
Why you got it
There are three common reasons:
- The return was never filed.
- The return was filed, but the IRS rejected or returned it, often for a missing signature or missing information.
- The return was filed under a different identification number or for a different period than the one the IRS is tracking.
The IRS's own suggestion is worth taking seriously: review your records to make sure the IRS did not send your original return back because of a missing signature or missing information. A return without a valid signature is not a filed return.
The deadline
Use the due date on the notice. The IRS asks you to send the return so it is received by that date. Received, not mailed. Build in time for delivery, or ask the number on the notice whether another submission method is available for your return type.
If you miss it, the IRS says it may consider the return delinquent and begin collection enforcement to secure the return.
A missing return is not a paperwork glitch. To the IRS, a return that never arrived is a return that was never filed.
What to do now
- Read the notice for the form and period. The IRS says to review your notice to determine which return it needs.
- Find your copy. If you have the original, send a copy of it with an original signature.
- If you don't have a copy, complete and sign a new return using the forms and instructions for that year.
- Check the identifiers. Make sure the name, EIN, form, and period on what you send match the notice exactly.
- Send it to arrive on time and keep proof of delivery.
Why the IRS cares so much
A missing return has consequences that build on each other.
Penalties. For returns that report tax, IRC 6651(a)(1) adds 5 percent of the tax required to be shown for each month or partial month the return is late, up to 25 percent, unless the failure is due to reasonable cause and not willful neglect. For partnerships, IRC 6698 imposes a monthly penalty for up to 12 months for failing to file Form 1065 on time. For S corporations, IRC 6699 does the same for Form 1120-S. Those two penalties apply even when the entity owes no tax.
IRS-prepared returns. IRC 6020(b) authorizes the IRS to prepare a return when a person fails to file one, using whatever information it can obtain. Those returns rarely include the deductions and credits you would claim.
No statute of limitations on assessment. IRC 6501(c)(3) says that when no return is filed, tax may be assessed at any time. The clock that normally protects you from old assessments never starts.
The IRS's CP169 page points to the statutes of limitations for assessing, collecting, and refunding tax for exactly this reason.
Penalty relief is possible
Every one of those filing penalties has a reasonable cause exception written into the statute. The IRS also has an administrative waiver. IRM 20.1.1.3.3.2.1 describes First Time Abate, which can provide relief from the failure to file penalty under IRC 6651(a)(1), IRC 6698(a)(1), or IRC 6699(a)(1) the first time a taxpayer is subject to it for a return, if the taxpayer meets the criteria. The criteria include having filed the same type of return for the 3 preceding years without unreversed penalties. Get the return filed first. Then ask about relief. Our guide on requesting penalty abatement walks through the process.
If the return was rejected for a signature
This is more common than people think. A return signed by the wrong person, unsigned, or signed only by a preparer may be returned. For a business return, the signature generally has to come from someone authorized to sign for the entity under the form's instructions. Check the instructions for the specific form before you sign and send it again.
If you can't pay what the return shows
File anyway. The failure to file penalty is generally larger than the failure to pay penalty, and filing stops the filing penalty from growing. You can then address the balance with a payment plan or other option. Our guide to IRS letters for business owners covers the collection notices that may follow.
Gather the records before you rebuild a return
If you have to prepare the return from scratch, start with what the IRS already has. For employment tax returns, that means payroll records and the Forms W-2 that were filed. For income tax returns, it means bank statements, Forms 1099 issued to the business, and the prior year's return. A return that matches the IRS's information is processed faster and raises fewer questions.
If you believe no return was required
Call the number on the notice and explain. If the business closed, changed its form, or stopped having employees, the IRS may still have it set up to file returns that are no longer required. Ask how to update the filing requirement so the notices stop.
What not to do
Do not send an unsigned copy. It will not fix the problem.
Do not assume the IRS has the return because your software or preparer says it was transmitted. If the IRS says it is missing, get proof of acceptance or send a signed copy.
Do not wait for a second notice. The next step may be enforcement.
The law behind CP169
IRC 6651(a)(1) imposes the failure to file penalty. IRC 6698 and 6699 impose monthly late filing penalties on partnerships and S corporations for up to 12 months. IRC 6020(b) allows the IRS to prepare returns for nonfilers. IRC 6501(c)(3) removes the assessment deadline when no return is filed.
If you need help reconstructing and filing a missing business return, call us at (813) 229-7100.