CP215 Notice
A CP215 notice is the IRS letter that tells a business a civil penalty has been charged, most often $25,000 for a late or missing Form 5472. It states the amount, the tax year, and starts the clock on additional penalties if the failure continues.
A CP215 is the letter nobody wants from the IRS. It is a civil penalty notice sent to businesses, and for foreign-owned LLCs it usually means one thing: the IRS has assessed the $25,000 penalty under section 6038A for a Form 5472 that arrived late, arrived substantially incomplete, or never arrived at all. The notice shows the penalty amount, the tax year involved, the form it relates to, and instructions for paying or disputing the charge.
The letter often surprises founders because assessment is largely automatic. When a late pro forma Form 1120 with Form 5472 is processed, the system can generate the penalty without any human deciding your case deserves it. A founder in India who discovered the rule late, filed voluntarily in June for a return due April 15, may still open a CP215 assessing $25,000 a few months later. Filing late and receiving the notice does not mean the fight is over; it means the abatement process begins.
Timing is the dangerous part. If the failure to file continues, section 6038A adds $25,000 for each 30-day period once 90 days have passed after IRS notification. So a CP215 for a form you still have not filed is urgent: file immediately, then contest. For a form you already filed, the continuation clock is not the issue, and the work shifts entirely to getting the assessed $25,000 removed.
The response is a reasonable cause statement: a letter explaining who you are, why the filing was late, what care you took, and how quickly you fixed it, sent with supporting documents to the address on the notice. First-time abatement generally does not cover this penalty, so the quality of your reasonable cause story carries the case. Many first-time, no-tax-due foreign owners who filed voluntarily do win abatement, but only when they respond rather than freeze.
What to do when a CP215 arrives
- Read it carefully: confirm the form, tax year, and penalty amount
- If the return still is not filed, file it immediately to stop continuation penalties
- Send a reasonable cause statement with evidence to the address on the notice
- Track deadlines in the letter and keep copies of everything you send
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