Penalty relief

IRS penalty abatement letters, built from the notice you received.

Enter the notice and FundTaxes picks the relief that fits: first-time abatement, the Rev. Proc. 84-35 small-partnership statement, a reasonable-cause letter structured the way the IRS manual reads it, or the §6724 statement that answers a 1099 penalty. Form 843, an appeal and a cover sheet come with it, for $199 per business.

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One payment per business, every letter type included. Drafts are free to read; you pay to finalize and print.

When penalties start in 2027

Jan 1, 2027Automatic exemption from penalty starts for returns originally due from today (IR-2026-83)Feb 1, 20271099-NEC due: the §6721 and §6722 penalty tiers run from hereMar 3, 2027Last day of the $60-per-return tier (corrected within 30 days)Mar 15, 2027Forms 1065 and 1120-S due: $260 per owner per month after thisApr 15, 2027Form 1120 due: failure-to-file and failure-to-pay penalties startAug 1, 2027Last day of the $130-per-return tier for 1099s

Next date January 1, 2027 Automatic exemption from penalty starts for returns originally due from today (IR-2026-83)

Business compliance

2027 penalty dates for business returns
Date	Line	Filing
January 1, 2027	Business compliance	Automatic exemption from penalty starts for returns originally due from today (IR-2026-83)
February 1, 2027	Business compliance	1099-NEC due: the §6721 and §6722 penalty tiers run from here
March 3, 2027	Business compliance	Last day of the $60-per-return tier (corrected within 30 days)
March 15, 2027	Business compliance	Forms 1065 and 1120-S due: $260 per owner per month after this
April 15, 2027	Business compliance	Form 1120 due: failure-to-file and failure-to-pay penalties start
August 1, 2027	Business compliance	Last day of the $130-per-return tier for 1099s

The letters, and what each answers

Each is drafted from the notice and the business’s record, with the citations in the text.

First-time abatement, or automatic relief
For late filing, late payment and deposit penalties with three clean prior years. For returns originally due from January 1, 2027 the IRS applies it automatically; earlier returns still need the request. IRM 20.1.1.3.3.2.1; IR-2026-83
Reasonable cause
Structured on the manual’s factors: what happened and when, how it prevented filing, how other affairs were handled, and what was done once it ended, with an evidence list. IRM 20.1.1.3.2
Rev. Proc. 84-35 statement
The five representations a CP162A asks of a partnership with 10 or fewer partners, all individuals or estates, signed under penalties of perjury. Rev. Proc. 84-35; PMTA 2020-01
§6724 statement for 1099 penalties
The written waiver request Reg. §301.6724-1(m) requires in answer to a 972CG or CP215: mitigating factors or events beyond your control, and responsible conduct before and after. Reg. §301.6724-1
Appeal letter
When Letter 854C denies the request: the facts, the law and the relief asked for, matched to the notice that carries the appeal rights.
Form 843 and cover sheet
The official Form 843 filled from the business record, and a cover sheet with the notice number, tax period and reply address. Refund claims run three years from filing or two from payment. Instructions for Form 843; IRC §6511

Which notice, which answer

From the IRS notice pages and Pub 1586 (Rev. 8-2026).

Notice	What it means	What answers it	When and where
CP162A	Partnership or S corporation return filed late	First-time abatement, the Rev. Proc. 84-35 statement, or reasonable cause	Return it with the statement; the notice gives the address
CP162B	Return incomplete	Reasonable cause (first-time abatement does not cover it)	The address on the notice
CP162	Partnership did not e-file when required	Reasonable cause; call 800-829-0922 about e-file timeliness	The address on the notice
CP14, CP161	Balance due with penalty and interest	Call for first-time abatement, then Form 843	Pay or respond by the date on the notice
972CG	Proposed 1099 penalty	The written §6724 reasonable-cause statement	45 days (60 for foreign filers), before assessment
Letter 854C	Abatement request denied	The appeal letter	Follow the appeal rights in the next balance-due notice
CP15, CP215	Civil penalty charged	The appeal letter or Form 843	The notice carries the appeal rights

The penalties, in figures

Verified against the IRS pages, the Internal Revenue Manual and Rev. Proc. 2025-32 on October 11, 2026.

Late partnership or S corporation return: $260 per partner or shareholder for each month or part of a month late, up to 12 months, for returns due in 2027. The same rate applies to an incomplete return. IRC §§6698, 6699; Rev. Proc. 2025-32 §§4.55–4.56
Failure to file or pay (Forms 1120, 1041): 5% of the unpaid tax per month, up to 25%, with a minimum of $535 when more than 60 days late; failure to pay is 0.5% a month. IRC §6651
1099 penalties: $60 per return if corrected within 30 days, $130 by August 1, $340 after that, for returns due in 2027. First-time abatement does not cover them. IRC §§6721, 6722; Rev. Proc. 2025-32 §4.57
A 972CG notice: Gives you 45 days to answer with a written reasonable-cause statement before the penalty is assessed. Pub 1586 (Rev. 8-2026)
Interest: 7% a year in the fourth quarter of 2026, compounded daily, on the tax and the penalties until paid. Rev. Rul. 2026-15

How it compares

From the alternatives’ public pages, October 2026.

Tax-resolution software for practitioners$74 to $189 a user a month

Letter templates$0 to $13, not built from your notice

Calling the IRS yourselfFree: first-time abatement by phone

FundTaxes letters$199 per business, one time

If the notice is a simple late-filing penalty with three clean years, call the number on it first: the IRS grants first-time abatement by phone.

What we don’t do

So you can plan around it.

Represent you before the IRS or call on your behalf; a CPA or attorney can quote for that from the same page.
Promise relief: the letters state your facts and the standard that applies.
Mail the letters: you print, sign and send them to the address on the notice.
Answer accuracy-related penalties or penalties on Forms 706, 709, 990, 3520, 5471 or 5472.

$199

one time, per business

Every letter type, every notice for that business. Drafts are free to read. Start a 14-day free trial

Questions

Which notice am I looking at?

CP162A: a partnership or S corporation return filed late (it includes the Rev. Proc. 84-35 instructions). CP162B: the return was incomplete. CP162: a partnership failed to e-file when required. CP14 and CP161: a balance due with penalty and interest. 972CG: a proposed 1099 penalty. CP215: a civil penalty, usually after a 1099 penalty is assessed.

Do I need a letter for first-time abatement?

Not always. For a failure-to-file or failure-to-pay penalty you can call the number on the notice and ask; the IRS checks the three-year history on the call. A letter is for when the call does not resolve it, when you also want reasonable cause considered, or when the penalty is a §6698 or §6699 partnership or S corporation penalty you are answering in writing.

What changes in 2027?

Automatic exemption from penalty replaces first-time abatement for eligible returns with original due dates on or after January 1, 2027: qualifying filers simply are not assessed. Returns due in 2026 or earlier still use the request. The letters branch on the return’s original due date.

Does the IRS accept Rev. Proc. 84-35 after the 2015 audit-rule changes?

Yes. The IRS confirmed in PMTA 2020-01 that the procedure still applies to tax years after 2017, and the current CP162A notice (updated August 2026) tells small partnerships how to use it. Partnerships with a corporation or trust as a partner are not covered.

What does the $199 cover?

One payment per business covers every letter type for that business, every notice, for as long as the business is in your account: reading and drafting are free, finalizing and printing is what you buy. It does not include representation; a CPA or attorney can be asked for a quote from the same page.

Can you promise the penalty goes away?

No. Relief depends on the facts and the IRS’s review. The letters state the facts you give and cite the standard that applies to them; they do not invent a story, and the app says so before you finalize.

Related guides

All guides

First-time penalty abatement: who qualifies, what it excludes, how to ask, and the 2027 switch to automatic reliefOct 12, 2026, 9 min read
Partnership and S corporation late filing penalty: $260 per owner per month, and four ways to get it removedOct 12, 2026, 9 min read
K-1 deadline 2027: when Schedule K-1s are due, the $340 late penalty and what investors can doOct 12, 2026, 8 min read

Answer the notice this week

Add the business and the notice; the draft letters are free to read. $199 per business to finalize and print, no subscription required.

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