CP15 Notice: How to Resolve Employment Tax Penalties

Last updated 10/30/2024 by

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Summary:

The CP15 Notice is an official letter from the IRS informing a taxpayer of a civil penalty for employment tax issues. This notice usually relates to unpaid or underreported employment taxes, such as federal income tax withholding or FICA (Social Security and Medicare taxes). The CP15 Notice outlines the nature of the penalty, the amount owed, and steps the taxpayer can take to appeal or resolve the issue. Understanding the reasons behind the notice and responding promptly can help prevent additional penalties and interest.

Receiving a CP15 Notice from the IRS can be unsettling. This notice indicates that the IRS has assessed a civil penalty against you or your business related to employment taxes. These penalties often stem from issues like late payments, underreported wages, or failures to file proper tax documents. If you’ve received a CP15 Notice, it’s important to understand the reasons behind it and take the appropriate actions. This article explains what the CP15 Notice is, how it impacts you, and what steps you should take to address the issue.

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What is a CP15 notice?

The CP15 Notice is issued by the IRS when a taxpayer or business is assessed a civil penalty for employment tax violations. Employment taxes refer to taxes paid on wages to employees, including federal income tax withholding, Social Security, and Medicare taxes. The CP15 Notice outlines the type of penalty, the amount due, and the reason for the assessment. Common causes include late filing, failure to deposit taxes on time, or inaccuracies in reported wages.

Why does the IRS issue a CP15 notice?

The IRS issues a CP15 Notice to notify taxpayers about penalties incurred for non-compliance with employment tax requirements. The notice is intended to inform the taxpayer about the nature of the penalty and provide guidance on how to resolve it. Common reasons for issuing a CP15 Notice include:

– Failure to file employment tax returns on time: When employers do not file forms such as Form 941 (Employer’s Quarterly Federal Tax Return) by the due date, the IRS may impose penalties.
– Late payment of employment taxes: Paying employment taxes after the deadline can result in penalties and interest.
– Inaccurate reporting of wages or taxes: If wages are underreported, or the amount of taxes owed is incorrectly calculated, a penalty may be assessed.

Pro tip

Keep detailed payroll records and documentation for at least four years. Accurate records can help resolve disputes, verify compliance, and support any appeals or abatement requests.

How the CP15 notice affects you

When you receive a CP15 Notice, it means the IRS has assessed a penalty that you must address to avoid further complications. The penalties can accumulate interest if not resolved promptly, increasing the total amount owed. Additionally, unresolved penalties can affect your tax account status, potentially leading to additional enforcement actions, such as liens or levies.

Financial implications of the CP15 notice

The penalties outlined in the CP15 Notice can add significant costs to your tax liability. The IRS may charge interest on unpaid penalties, making it crucial to respond quickly to minimize the financial impact. Employers who continually fail to comply with employment tax requirements may also face increased scrutiny or additional penalties in the future.

Steps to take when you receive a CP15 notice

Upon receiving a CP15 Notice, it’s important to act quickly. Here are the steps you should take to resolve the issue:

Review the notice carefully: Understand the nature of the penalty and the specific reasons for its assessment. The notice will include a penalty reference number that can help identify the type of penalty.
Verify your records: Check your payroll records, tax filings, and payment history to ensure accuracy. If you find any discrepancies, gather documentation that supports your case.
Pay the penalty: If you agree with the IRS’s assessment, you can pay the penalty by the due date provided in the notice to avoid further interest charges. Payments can be made through the IRS’s online payment system, by mail, or via direct debit.
Request an abatement or appeal: If you believe the penalty is unjust or due to circumstances beyond your control, you can request an abatement or appeal. The notice will include instructions on how to file an appeal or request a penalty reduction.
Seek professional assistance if needed: If the issue is complex or you need help understanding the notice, consider consulting a tax professional.

How to respond to the CP15 notice

Responding promptly to a CP15 Notice can help resolve the issue quickly and minimize additional costs. Here’s how to handle it effectively:

Steps to take when addressing a CP15 notice

1. Read the notice thoroughly: Make sure you understand the penalty’s details, including the amount owed and the due date.
2. Gather your records: Collect relevant payroll, tax, and payment documentation to verify whether the penalty is accurate.
3. Contact the IRS if necessary: If you have questions or need clarification about the notice, reach out to the IRS using the contact information provided on the CP15 Notice.
4. Submit a request for penalty abatement: If you disagree with the penalty, provide documentation to support your case when requesting abatement. Reasons for abatement may include reasonable cause, such as a natural disaster, illness, or other unforeseen events.
5. Make payment arrangements: If you agree with the penalty but cannot pay it in full, consider setting up a payment plan with the IRS.

Other ways to resolve a CP15 notice

If you are dealing with recurring penalties or need to prevent future issues, consider implementing payroll and tax compliance strategies. These may include automating tax payments, hiring a payroll service, or seeking regular tax advice from a professional.

Pro tip

Consider using a payroll service provider to ensure timely and accurate filing of employment taxes. This can reduce the likelihood of errors and missed deadlines, minimizing the risk of penalties.

Further support options for addressing a CP15 notice

If you’re having trouble resolving the CP15 Notice on your own, there are several resources available:

Taxpayer Advocate Service (TAS): If you’re facing hardship or have trouble communicating with the IRS, the TAS can assist in resolving the issue.
IRS website: The IRS’s website provides information on employment taxes, penalty relief options, and how to appeal a decision.
Certified tax professionals:CPAs, tax attorneys, or enrolled agents can provide guidance on how to dispute the penalty or request abatement.

Professional assistance is particularly beneficial for complex situations or if you have multiple notices.

Potential penalties or next steps if you don’t respond

Ignoring a CP15 Notice can result in more serious consequences, including:

Increased penalties and interest: The longer the penalty goes unpaid, the more interest accumulates, increasing the total amount due.
Enforcement actions: The IRS may place a lien on your property, levy your bank accounts, or garnish wages to collect the debt.
Legal ramifications: In extreme cases, persistent non-compliance with employment tax requirements can lead to criminal charges.

To avoid these outcomes, respond to the notice as soon as possible, even if you need more time to pay or appeal the penalty.

Pro tip

If you face recurring penalties, request a compliance check from the IRS. This voluntary review can help identify problem areas and provide guidance on how to improve your tax practices.

What potential outcomes are possible?

Depending on how you respond to the CP15 Notice, several outcomes may occur:

If you pay the penalty: Your account will be brought current, and no further actions will be needed.
If you request a penalty abatement and it’s approved: The penalty will be reduced or removed, and you may not owe any additional amount.
If you appeal and the appeal is successful: The penalty may be adjusted based on the evidence you provide.
If the IRS denies your appeal: You may still owe the penalty and will need to make payment arrangements.

Timely responses can help resolve the issue with minimal disruption to your finances.

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Frequently asked questions

What types of employment tax penalties can result in a CP15 notice?

A CP15 Notice can be issued for various employment tax violations, including failure to file employment tax returns on time, late payment of federal income tax withholding or FICA taxes, and inaccuracies in wage or tax reporting. The notice specifically details the penalty assessed, allowing you to identify the violation.

Can I request penalty relief if I’ve received a CP15 notice due to circumstances beyond my control?

Yes, you can request penalty relief if the penalty was caused by circumstances beyond your control, such as a natural disaster, serious illness, or other unforeseen events. When submitting a request for abatement, be sure to provide documentation that supports your claim of reasonable cause.

How does interest accrue on the penalties mentioned in a CP15 notice?

Interest on the penalties assessed in a CP15 Notice begins to accrue from the date the penalty is imposed and continues until the total amount is paid in full. The interest rate is determined quarterly by the IRS and compounds daily, meaning that delaying payment can significantly increase the total amount owed.

Can receiving multiple CP15 notices indicate a larger compliance issue?

Receiving multiple CP15 Notices can suggest ongoing compliance problems with employment taxes, such as repeated late payments, recurring inaccuracies, or persistent filing issues. It may be beneficial to review your payroll and tax practices, consider hiring a payroll service, or seek professional tax advice to address underlying issues.

What should I do if I’ve already paid the penalty mentioned in the CP15 notice but still received the notice?

If you have already paid the penalty but still received a CP15 Notice, contact the IRS immediately using the information provided in the notice. It’s possible that the payment was not properly recorded, or additional information may be needed. Be prepared to provide proof of payment to resolve the issue quickly.

Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.

IRS Letter or Notice Number

Notice Description

CP01	The IRS verified your claim of identity theft and will monitor your account.
CP01H	The IRS received a tax return with a social security number that belongs to a dead person.
CP02H	Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma.
CP03C	You received the First-Time Homebuyer Credit for a house you purchased.
CP04	You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice.
CP08	You may be entitled to additional money due to the Additional Child Tax Credit.
CP10	Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed.
CP10A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP11	You owe money because the IRS amended your return due to a miscalculation.
CP11A	Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed.
CP11M	Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed.
CP12	You are due a bigger refund because the IRS corrected one or more mistakes on your tax return.
CP12A	The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return.
CP12E or CP12F	The IRS corrected a miscalculation on your return.
CP12M	The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return.
CP12R	The IRS made changes to the computation of the Rebate Recovery Credit on your return.
CP13	The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero.
CP13A	The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero.
CP13M	The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero.
CP13R	The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero.
CP14	You owe money on unpaid taxes.
CP16	The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts.
CP21A	You owe money due to the changes you requested that the IRS make on your tax returns.
CP21B	You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks.
CP21C	The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero.
CP21E	As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes.
CP21I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP22A	The IRS made the changes you requested, and you owe money as a result.
CP22E	As a result of your recent audit, the IRS changed your tax return, and you now owe money.
CP22I	The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes.
CP23	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes.
CP24	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP24E	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes.
CP25	The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero.
CP31	You need to update your address because your refund check was returned to the IRS.
CP45	The IRS was unable to apply your overpayment to your estimated tax as you requested.
CP49	The IRS used all or part of your refund to pay a tax debt.
CP53	Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit.
CP57	The bank declined your payment, so the IRS was unable to draft funds from your bank account.
CP71	A reminder of the amount you owe in tax, penalty, and interest.
CP71A	A reminder of the amount you owe in tax, penalty, and interest.
CP71C	A reminder of the amount you owe in tax, penalty, and interest.
CP71D	A reminder of the amount you owe in tax, penalty, and interest.
CP88	The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax.
CP90	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing.
CP91	The IRS will levy up to 15% of your social security benefits for unpaid taxes.
CP120	The IRS needs documentation of your tax-exempt status.
CP120A	Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years.
CP130	You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed.
CP152	The IRS received your return.
CP153	The IRS will send your refund by mail because your direct deposit did not go through.
CP161	You have an unpaid balance due to the IRS.
CP166	Your monthly payment to the IRS did not go through due to insufficient funds in your bank account.
CP178	You may no longer owe excise tax because your tax return filing requirements changed.
CP231	You need to update your address because your refund was returned to the IRS.
CP259	You did not file the business tax return identified in the notice.
CP259A	You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard).
CP259B	The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259C	The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation.
CP259D	You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return.
CP259E	You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP259F	The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return.
CP259G	The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations.
CP259H	As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax.
CP276A	You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time.
CP276B	The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time.
CP297	The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP297A	The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing.
CP298	The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes.
CP501	You have a balance due on one of your tax accounts.
CP503	You have an unpaid balance on one of your accounts, and the IRS has not heard from you.
CP504	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe.
CP504B	You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe.
CP521	A reminder that you have an installment agreement payment due.
CP523	You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets.
CP601	Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas.
CP603	No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas.
CP604	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda.
CP604B	Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda.
CP621	Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente.
CP623	Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo.
CP711	Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones.
CP721	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP722	Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos.
CP771	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP772	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP773	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP774	Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses.
CP959	Usted no radicó su planilla de contribución de negocios identificada en este aviso.
CP2000	The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due.
CP3219A	The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax.
CP3219N	The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days.
Letter 0012C	The IRS needs additional information to process your tax return.
Letter 0484C	The IRS wants a completed
Letter 0525	Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed.
Letter 531	IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return.
Letter 0668D(LP 68)	The IRS released their levy.
Letter 0549C	Your tax bill was paid.
Letter 0681C	The IRS accepted your payment proposal. However, this is not a formal Installment Agreement.
Letter 0757C	You did not adhere to the terms of your Installment Agreement.
Letter LT 11	The IRS plans to seize your property or rights to property.
Letter 1058	The IRS has not received your payment. It plans to seize your property or rights to property.
Letter 1615 (LT 18)	You must respond to the IRS within 10 days of this notice regarding past due tax returns.
Letter 1737 (LT 27)	Complete and sign Form 433F, Collection Information Statement.
Letter 1961C	Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify.
Letter 1962C	Your application for a
Letter 2050 (LT 16)	The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed.
Letter 2257C	The IRS is providing the payoff amount that you requested.
Letter 226-J	An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP).
Letter 2271C	A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information.
Letter 2272C	An IRS letter explaining why your request to pay the balance due in installments was declined.
Letter 2273C	A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included.
Letter 2318C	A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged.
Letter 2357C	The IRS is admitting that it did not send you the balance due notices that it should have.
Letter 2603C	The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property.
Letter 2604C	The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction.
Letter 2761C	The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer.
Letter 2789C	An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid.
Letter 2840C	Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify).
Letter 3030C	Provides an explanation of the tax, penalty, and interest still due on your account.
Letter 3127C	A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities.
Letter 3174	A reminder of taxes due after the IRS has sent a Notice of Intent to Levy.
Letter 3217C	The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify).
Letter 3228 (LT 39)	A request to pay the balance due within 10 days using the envelope provided.
Letter 3500	The IRS has received your documents, and it needs additional time to review them.
Letter 3572	Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment.
Letter 4883C	The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately.
Letter 4903 (LT 26)	You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response.
Letter LP 47	The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address.
Letter LP 59	The IRS has not received a response to the notice of levy it previously sent.
Audit Letter 2205	The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit).
Letter 915	You recently underwent an audit, and the IRS informs you that you now owe taxes.

Key takeaways

The CP15 Notice is an IRS notice regarding civil penalties for employment tax violations.
Common reasons include late payments, inaccurate reporting, or failure to file tax forms on time.
Responding quickly can help avoid additional interest, penalties, and enforcement actions.
Penalties can be disputed or abated if you can provide evidence of reasonable cause.

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