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972CG penalty reference numbers (PRNs), explained

Every line of the proposed penalty on Notice 972CG carries a penalty reference number (PRN) — a three-digit code that tells you exactly which failure the IRS found. The code does not set the dollar amount, but it determines which facts your response has to address. Here is the code table, where to find it on the notice, and how each code connects to the penalty math and the response.

1. What a PRN is

A penalty reference number is the IRS's classification of an information-return failure under IRC §6721. When the IRS proposes civil penalties for Forms 1094-C and 1095-C failures, it tags each group of failures with the PRN that best describes what went wrong — late filing, failure to e-file, missing or incorrect taxpayer identification numbers, or combinations of those. The full table lives in IRM Exhibit 20.1.7-4.

Think of the PRN as the diagnosis and the tier tables as the dosage: the code tells you the failure type; the §6721 per-return tiers and annual caps (keyed to the year the returns were due in) tell you the amount. See how to answer Notice 972CG for the response sequence.

Sources: IRM Exhibit 20.1.7-4 (PRN table); IRS — Information Return Penalties.

2. The 500-series code table

The PRNs relevant to 972CG proposals, per IRM Exhibit 20.1.7-4:

• PRN 500 — filed late. The returns were filed after the due date.
• PRN 501 — failed to e-file when required. For returns due in 2024 and later, filers with 10 or more returns must file electronically (T.D. 9972).
• PRN 502 — missing or incorrect TIN. The return was filed but the taxpayer identification number was wrong or absent.
• PRN 504 — late filing and failure to e-file.
• PRN 505 — late filing and missing or incorrect TIN.
• PRN 507 — failure to e-file and missing or incorrect TIN.
• PRN 510 — late filing and failure to e-file and missing or incorrect TIN.
• PRN 537 — intentional disregard. Asserted manually by the IRS, not through the standard 972CG proposal process.

Source: IRM Exhibit 20.1.7-4.

3. Where the PRN appears on the notice

In the notice's proposed-penalty detail, each failure line shows three things together: the penalty reference number, the count of returns with that failure, and the proposed dollar amount. Transcribe all three exactly as printed into your working file — the PRN and count are the inputs your recomputation needs, and the proposed amount is the number you are checking.

If the notice lists multiple PRNs, treat each line as a separate recomputation: different failure types can carry different correction-timing tiers and pull in different parts of the reasonable-cause regulation.

4. How the PRN connects to the penalty math

The §6721 per-return tiers are keyed to the calendar year the return was due in, not the tax year on the form — and the per-return amount depends on when the failure was corrected:

• Due in 2023 (Rev. Proc. 2021-45): $50 if corrected within 30 days; $110 by August 1; $290 after.
• Due in 2024 (Rev. Proc. 2022-38): $60 / $120 / $310 across the same windows.
• Due in 2025 (Rev. Proc. 2023-34): $60 / $130 / $330 across the same windows.
• Due in 2026 (Rev. Proc. 2024-40): $60 / $130 / $340 across the same windows.

Two limits apply on top of the tiers: no more than one §6721 penalty per return, and the annual caps, which differ by filer size — "large" means average gross receipts over $5 million for the three most recent tax years. Intentional disregard (PRN 537) carries a higher per-return amount ($660 for 2025 due-year returns; $680 for 2026) with no annual cap.

Sources: IRS — Information Return Penalties; Rev. Proc. 2021-45; Rev. Proc. 2022-38; Rev. Proc. 2023-34; Rev. Proc. 2024-40; IRC §6721.

5. How the PRN shapes the response

The PRN determines which facts your written statement has to establish under Reg. §301.6724-1:

• 502 / 505 / 507 / 510 (TIN failures) pull in the solicitation regime — the regulation requires an initial solicitation (generally a W-9 request) and annual solicitations thereafter.
• 500 / 504 (late filing) turn on correction timing and the two-prong reasonable-cause test — significant mitigating factors plus responsible action before and after the failure.
• 501 / 504 / 507 / 510 (e-file failures) turn on whether electronic filing was required and whether a hardship or system failure prevented it.

For the full two-prong test, the solicitation mechanics, and worked examples, see 972CG reasonable cause, explained — and for the written statement's four required elements, how to answer Notice 972CG.

Common questions

This guide is general information, not legal or tax advice. Statutes and IRS pages change — verify against the sources linked above.