Which year's penalty rates apply to my 972CG?

§6721 penalty tiers are keyed to the calendar year the return was due in, not the tax year. For example, 2024 tax-year Forms 1095-C were due in 2025, so the 2025 due-year rates apply: $60/$130/$330 per return (Rev. Proc. 2023-34).

Guide

What is IRS Letter 972CG?

Q: Is it called Notice 972CG or Letter 972CG?

The IRS calls the document Notice 972CG, titled Notice of Proposed Civil Penalty. Practitioners commonly call it Letter 972CG. It is the same document — a proposal of civil penalties under IRC §6721 for failure to file correct information returns.

Q: How long do I have to respond to Letter 972CG?

IRM 4.19.25.7.6 gives 45 days from the notice date to respond (60 days for filers outside the U.S.) before the penalty is assessed in full. One written extension is available, answered by IRS Letter 1948-C, up to 90 days from the notice date. Always confirm the response date printed on your notice.

Q: Can I be penalized twice for the same information return?

No more than one §6721 penalty applies per return, even if the return had multiple failures. But §6722 furnishing penalties (failure to furnish correct payee statements) are separate exposure at the same rates.

The IRS calls it Notice 972CG — "Notice of Proposed Civil Penalty." Practitioners call it Letter 972CG. Same document: a proposed penalty under IRC §6721 for failing to file correct information returns. Here's what triggers it, how the penalty is computed, and how much time you have.

On this page

What the notice is
What triggers it: the penalty reason codes
The 45-day response clock
The penalty tiers, by due year
What happens if you don't respond
972CG vs. 226-J
Common questions

What the notice is

Notice 972CG proposes civil penalties under IRC §6721 — failure to file correct information returns. For employers, the returns at issue are typically Forms 1094-C and 1095-C: filed late, filed with errors, not filed electronically when required, or filed with missing or incorrect taxpayer identification numbers.

There is no standalone IRS.gov explainer page for this notice. The official coverage lives in the Internal Revenue Manual — IRM 4.19.25 (penalty proposal procedures) and IRM 20.1.7 (information-return penalties) — and on the IRS's information return penalties page.

Sources: IRM 4.19.25; IRM 20.1.7; IRS — Information Return Penalties.

What triggers it: the penalty reason codes

The notice lists one or more penalty reason codes (PRNs) identifying the failure the IRS found:

PRN 500 — late filing.
PRN 501 — failure to file electronically. For returns due in 2024 and later, filers with 10 or more returns must e-file (T.D. 9972 lowered the old 250-return threshold).
PRN 502 — missing or incorrect TIN.
PRNs 504 / 505 / 507 / 510 — combinations of the above.
PRN 537 — intentional disregard. This one is asserted manually by the IRS, not through the standard 972CG proposal process.

The PRN tells you which failure the IRS is penalizing — and therefore which facts your response has to address.

Sources: IRM Exhibit 20.1.7-4 (PRN table); IRM 4.19.25 (IRP program).

The 45-day response clock

IRM 4.19.25.7.6 gives you 45 days from the notice date to respond (60 days for filers outside the United States) before the proposed penalty is assessed in full.

Confirm the printed date. The 45-day figure is the IRM's stated window, but the only date that matters is the response date printed on your notice. One extension is available if requested in writing — the IRS answers it with Letter 1948-C, extending the window up to 90 days from the notice date.

If the deadline passes without a response, the penalty is assessed in full and billed — typically as Notice CP15 or CP215.

Source: IRM 4.19.25.7.6.

The penalty tiers, by due year

§6721 penalties are keyed to the calendar year the return was due in — not the tax year on the form. (2024 tax-year Forms 1095-C were due in 2025, so the 2025 due-year rates apply.) The per-return amount depends on how quickly the failure was corrected:

Returns due in 2025 (Rev. Proc. 2023-34)

$60 per return if corrected within 30 days of the due date.
$130 per return if corrected after 30 days but on or before August 1.
$330 per return if corrected after August 1 or never.

Annual caps: large businesses (average gross receipts over $5 million for the last 3 years) — $664,500 / $1,993,500 / $3,987,000 by tier; small businesses — $232,500 / $664,500 / $1,329,000 by tier.

Returns due in 2026 (Rev. Proc. 2024-40)

$60 / $130 / $340 per return across the same three correction windows.

Annual caps: large — $683,000 / $2,049,000 / $4,098,500; small — $239,000 / $683,000 / $1,366,000.

Returns due in 2024 (Rev. Proc. 2022-38)

$60 / $120 / $310 per return across the same three correction windows (caps: large $630,500 / $1,891,500 / $3,783,000; small $220,500 / $630,500 / $1,261,000).

Limits and related rules

Intentional disregard: $660 per return (2025 due year) / $680 (2026), with no annual cap.
One penalty per return: no more than one §6721 penalty applies to a single return, even if it had multiple failures.
§6722 is separate exposure: failure to furnish correct payee statements (the employee copy) carries penalties at the same rates — on top of §6721.
De minimis: §6721(c)(3) treats returns with small dollar-amount errors ($100 or less; $25 or less for withholding) as correctly filed. Dollar amounts, TINs, and surnames are never treated as inconsequential.

Stale source warning. Old copies of IRS Publication 1586 circulating online still show "$50 per return." That figure is outdated — never compute a penalty from it.

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

What happens if you don't respond

Miss the response date and the proposed penalty is assessed in full — the proposal becomes the bill, issued as Notice CP15 or CP215. After assessment, your options narrow: you can still request penalty relief, but the leverage of the pre-assessment response window is gone. The time to assemble corrections and a reasonable-cause statement is before that happens.

Source: IRM 4.19.25.

972CG vs. 226-J

Both notices can arrive from the same Forms 1094-C/1095-C — but they are different enforcement actions:

Letter 226-J proposes an Employer Shared Responsibility Payment under §4980H — a payment for not offering affordable coverage, driven by your filings plus employees' premium tax credit data.
Notice 972CG proposes penalties under §6721 — for the filing itself: late, incorrect, non-electronic, or bad-TIN returns.

Receiving one does not immunize you from the other. See What is Letter 226-J? and 972CG reasonable cause, explained.

Recompute before you respond. The 972CG Response Pack ($129) recomputes your proposed penalty tier-by-tier, tracks your corrections and their timing, walks through the reasonable-cause test, and assembles your written response. Start with the free deadline check on the 972CG track page.

Common questions

The IRS calls the document Notice 972CG — "Notice of Proposed Civil Penalty." Practitioners commonly call it Letter 972CG. It is the same document: a proposal of civil penalties under IRC §6721 for failure to file correct information returns.

IRM 4.19.25.7.6 gives 45 days from the notice date (60 days for filers outside the U.S.) before the penalty is assessed in full. One written extension is available — answered by IRS Letter 1948-C — up to 90 days from the notice date. Always confirm the response date printed on your notice.

§6721 tiers are keyed to the calendar year the return was due in, not the tax year. 2024 tax-year Forms 1095-C were due in 2025, so the 2025 due-year rates apply: $60/$130/$330 per return (Rev. Proc. 2023-34), with annual caps by business size.

No more than one §6721 penalty applies per return, even with multiple failures. But §6722 furnishing penalties — failure to furnish correct payee statements — are separate exposure at the same rates.

They involve the same Forms 1094-C/1095-C but different statutes and triggers: 226-J proposes an Employer Shared Responsibility Payment under §4980H; 972CG proposes information-return penalties under §6721. Receiving one does not immunize you from the other.

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