USTaxPenaltySaverCP162A
MediumPenalty for a Late or Non-Electronic Partnership or S Corporation Return
The IRS charged a penalty because a partnership or S corporation return was filed late, or was not e-filed when it had to be.
Last reviewed: November 10, 2026. Check irs.gov for changes.
Read the full guide to this noticeWhat This Notice Means
CP162A shows a penalty under IRC 6698 (partnerships) or IRC 6699 (S corporations). The penalty is charged per partner or shareholder for each month or part of a month the return is late, for up to 12 months: $255 per person per month for returns due in 2026 and $260 for returns due in 2027 (Rev. Proc. 2024-40 and 2025-32). Pay by the date on the notice if you agree; if you disagree or have reasonable cause, you can call or send a written request for abatement (irs.gov "Understanding your CP162A notice", updated 20 August 2026).
Why You May Have Received This
- 1Form 1065 or 1120-S filed after the due date (including extensions)
- 2Return filed on paper when e-filing was required
Required Actions
For a return due on or after January 1, 2027, first check whether automatic penalty relief (AEP) applied: look for TC 971 AC 996 on the business account transcript or a CP195B notice (IR-2026-83)
If you agree, pay by the date on the notice to limit interest
If the return was filed on time or you have reasonable cause, send a signed written explanation asking for abatement
Small partnerships (10 or fewer partners) can ask for relief under Rev. Proc. 84-35 if they meet all its conditions
Your Options
Use these calculators to understand your situation and explore resolution options.
Consequences If Ignored
- Interest builds on the unpaid penalty
- Collection notices follow if the balance stays unpaid
Tips & Best Practices
- First-Time Abatement covers IRC 6698 and 6699 penalties if the business has a clean 3-year history
- For returns due on or after January 1, 2027, automatic penalty relief (AEP) covers Forms 1065 and 1120-S
- Rev. Proc. 84-35 applies to partnerships only, not S corporations
Related Resources
Legal References
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