What this notice means
This notice proposes a penalty that hasn't been assessed yet. It lists each filing the IRS counted, the type of penalty for each, and a summary of the total. If taxpayer identification numbers (TINs) were missing or wrong, it also lists those name and TIN combinations so you can check them against your records.
You can agree, partly agree or disagree. If you can fix a problem the notice points out, the penalty may shrink or go away. If you had reasonable cause, you can ask in writing for a waiver before the penalty is assessed.
Why you got it
- Information returns were filed after the due date.
- You filed on paper when e-filing was required, which generally applies once you have 10 or more information returns.
- A payee's name and TIN were missing or incorrect.
What to do now
- Compare the notice with your records, including the list of returns with missing or incorrect name and TIN combinations.
- Decide whether you fully agree, partly agree or disagree, and send back the matching part of the payment and correspondence slip. Sign it, and include payment if you agree with all or part of the penalty.
- To ask for a waiver, include a written statement that names the waiver provision you're relying on and lays out the facts showing reasonable cause. It must be signed by the person required to file and made under penalties of perjury.
- Don't send copies of your TIN solicitations unless the IRS asks for them.
- If you need more time, mail a written request for an extension to the address on the notice before your 45 or 60 days run out.
If you don't respond
If you don't respond in time, the IRS assesses the full proposed penalty and sends a balance due notice (CP15 or CP215) with your appeal rights. Interest runs from that notice's date unless you pay within the time it gives.
Questions people ask
Does this include the penalty for late payee statements?
No. Notice 972CG only proposes the penalty for the returns filed with the IRS. A separate penalty for payee statements that were late or wrong can apply on top of it.
What happens after I ask for a waiver?
The IRS may send Letter 1948C asking for more details. If it accepts your reasons, Letter 6304C says the penalty won't be assessed. If it doesn't, Letter 854C explains why and lists your appeal rights.
What if one return has more than one problem?
Only one penalty applies to a single information return, even with several failures. The IRS charges the highest one.