Answer your 972CG before the 45-day window closes.
Notice 972CG proposes civil penalties under IRC §6721 for information-return failures — late or incorrect Forms 1094-C/1095-C, bad TINs, missed e-filing. It is not a final assessment. This pack recomputes the penalty tier-by-tier against your correction dates, walks you through the reasonable-cause test, and assembles your written response.
What the pack does
- 45-day deadline calculator from your notice date
- Tier recomputation — per-return penalties × your counts, with caps
- Correction tracker — timing that sets your penalty tier
- Reasonable cause — the two-prong test as a checklist
- Written statement assembly + evidence checklist + filing guide
Mechanics per IRS: Information return penalties, IRM 4.19.25, and IRM 20.1.7.
A proposed penalty is not a final penalty
Notice 972CG (the IRS calls it "Notice 972CG, Notice of Proposed Civil Penalty" — practitioners say "Letter 972CG") is generated from the IRS's filing records when your information returns don't match what was required: filed late, filed on paper when e-filing was required, missing or incorrect taxpayer identification numbers, or combinations of these. Each failure carries a penalty reference number (PRN) on the notice — 500 for late filing, 501 for e-file failures, 502 for TIN problems, and combination codes.
The proposed amount can be reduced or eliminated on three independent grounds:
- Wrong tier or count. The per-return penalty depends on when you corrected — within 30 days, by August 1, or later — and on the calendar year the return was due in. Corrections filed after the notice was generated can drop you a tier.
- The annual cap. Total §6721 penalties are capped per year (caps differ for large vs. small businesses) — recompute it; don't assume the notice did.
- Reasonable cause. Under Reg. §301.6724-1 the penalty is waived if you establish both significant mitigating factors (or an event beyond your control) and responsible conduct before and after the failure. This is a facts-and-documents test, not a form letter.
The pack's job is to recompute the arithmetic exactly, then structure the reasonable-cause showing the regulation actually requires.
Sources: IRM 4.19.25.7.6; IRS — Information return penalties.
Every step shows its work
Deadline + eligibility (free)
Enter your notice date for the 45-day deadline, then answer five questions to confirm the pack fits: 972CG in hand, failure type, due year, correction status, business size.
Notice intake
Transcribe the notice: PRN failure groups, return counts, the proposed penalty, the due year, and your business size for the caps.
Penalty recomputation
Each failure group recomputed at its correction tier — per-return amount × count, annual cap applied — then compared line-by-line against the IRS proposal.
Correction tracker
Log every corrected return with its filing date and method. Timing sets the tier — and prompt correction is half the reasonable-cause test.
Reasonable-cause builder
The Reg. §301.6724-1 two-prong test as an interactive checklist: mitigating factors or impediment, responsible manner, TIN solicitation regime — then your written statement drafted to the regulation's four requirements.
Response packet + filing guide
Cover sheet, recomputation table, statement draft, evidence checklist, and exactly where/how to file — plus what Letter 1948-C and Letter 854-C mean next.
Penalty tiers and the reasonable-cause test
§6721 tiers — returns due in 2025
Per-return amounts keyed to correction timing (large business shown; small businesses share the per-return rates with lower caps):
- $60 — corrected within 30 days of the due date (cap $664,500)
- $130 — corrected after 30 days but by August 1 (cap $1,993,500)
- $330 — corrected later, or never (cap $3,987,000)
Intentional disregard: $660 per return, no cap (assessed manually, not via 972CG).
Source: IRM Exhibits 20.1.7-1/20.1.7-2 (Rev. Proc. 2023-34). One §6721 penalty max per return, even with multiple failures.
Reasonable cause — two prongs, both required
Prong A — why it happened: significant mitigating factors (first-time filer, history of compliance) or an event beyond your control (records destroyed, reasonable reliance on wrong IRS writing, agent or payee failure).
Prong B — responsible manner: reasonable care before and after — extensions requested, impediments removed, failures rectified promptly (ordinarily within 30 days). For TIN failures: the solicitation regime (initial + annual W-9 requests).
Source: Reg. §301.6724-1. First Time Abatement does not apply to information-return penalties.
Letter 972CG questions
No — it is a proposed penalty. You have 45 days from the notice date (60 for overseas filers) to respond before the IRS assesses it. If you don't respond, the proposed amount is assessed in full and billed as CP15/CP215.
Each failure type on the notice carries a PRN: 500 = filed late, 501 = failed to e-file when required (10+ returns, due 2024+), 502 = missing or incorrect TIN, and 504/505/507/510 = combinations. PRN 537 (intentional disregard) is assessed manually, not through 972CG.
Often yes — the penalty tier follows when each correction was filed: within 30 days of the due date, by August 1, or later. Corrections filed after the notice was generated can still move you to a lower tier. The builder's correction tracker maps each group to its tier.
The IRS may ask for more information (Letter 1948-C), waive the penalty, or assess it and send Letter 854-C — which explains the disallowance and carries your appeal rights. If you need more time to respond, ask in writing before the deadline; the IRS replies with Letter 1948-C granting an extension.
No. The pack recomputes your penalty against IRS-published tiers and structures the reasonable-cause showing the regulation requires. It does not recommend positions, select defenses, or predict outcomes. What you assert in your response is your decision (ideally with professional advice).