USTaxPenaltySaverCP195B
InformationalAutomatic Penalty Relief Applied (Business)
The IRS removed an eligible failure-to-file, failure-to-pay or failure-to-deposit penalty on a business return automatically (AEP).
Last reviewed: November 10, 2026. Check irs.gov for changes.
What This Notice Means
Businesses get CP195B or CP895B when the IRS applies the Automatic Exemption from Penalty (AEP) announced in IR-2026-83 (July 8, 2026). It covers Forms 1065, 1120, 1120-S, 940, 941, 943, 944 and 945 (CT-1 only by manual review). The account transcript shows an unreversed TC 971 AC 996. Tax, interest and any other penalties are still due.
Why You May Have Received This
- 1Business return filed, or tax paid or deposited late, with a clean 3-year history
Required Actions
Keep this notice with the business tax records
Pay any tax, interest or other penalties still due
You do not need to ask for First-Time Abatement for the penalty that was removed
Your Options
Use these calculators to understand your situation and explore resolution options.
Consequences If Ignored
- Unpaid tax and interest keep growing until paid
Tips & Best Practices
- Employment returns also need fewer than 4 FTD waivers and no EFTPS avoidance in the lookback
- Automatic relief or FTA in the last 3 years blocks automatic relief for the next 3 years
Related Resources
IRS Resources
Legal References
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