The CP215 is a penalty notice for your business tax account. The IRS assessed a penalty related to your business return, and the notice shows the penalty type, amount, and the resulting balance due.
Common Business Penalties
The most frequent penalties on CP215 notices include the failure-to-deposit penalty (IRC Section 6656) for late or insufficient employment tax deposits, the failure-to-file penalty for late business returns, the failure-to-pay penalty for late payment of assessed business taxes, and accuracy-related penalties for errors on business returns.
The failure-to-deposit penalty is tiered: 2% for deposits 1-5 days late, 5% for 6-15 days late, 10% for 16+ days late, and 15% for amounts not deposited within 10 days of a delinquency notice. These percentages are applied to the underdeposited amount for each period.
Penalty Abatement Options
First-Time Abatement applies to business penalties too. If the business has been compliant for the past three years, FTA can remove the failure-to-file and failure-to-pay penalties for one period. One phone call to the number on the CP215 can save thousands.
Reasonable cause abatement requires documenting circumstances beyond the business's control. Common reasonable cause arguments for businesses include natural disasters affecting operations, key personnel illness, bank errors affecting deposit timing, and reliance on a payroll service that failed to make timely deposits.
Don't Just Pay
Business penalties can be substantial. A 10% failure-to-deposit penalty on $50,000 in quarterly employment taxes is $5,000. Before paying, spend five minutes determining whether FTA applies. If it does, one phone call eliminates the penalty.
If you've received a CP215, call us at (813) 229-7100. We request business penalty abatement regularly and know what works.