IRS CP15B Notice: What Is It and How Should You Respond?
Summary:
The IRS CP15B Notice is issued when a business or individual is charged with a Trust Fund Recovery Penalty (TFRP) for not properly paying employment or excise taxes. This penalty applies to individuals responsible for managing the business’s tax obligations, such as owners or financial officers. The notice details the amount owed, payment deadlines, and options to either pay or dispute the penalty. Ignoring the notice can result in increased interest, further penalties, and potential legal action. Prompt action is crucial to resolve the issue and avoid further consequences.
Discovering that you’ve been hit with a Trust Fund Recovery Penalty (TFRP) can feel overwhelming, especially when an IRS CP15B Notice arrives. This notice indicates that the IRS has found a discrepancy in the payment of employment or excise taxes, typically when a business fails to remit taxes withheld from employees’ wages. The IRS holds responsible individuals within the business, such as owners or financial officers, accountable for the unpaid taxes. Understanding why you received this notice and what steps to take next is crucial to resolving the penalty and avoiding further consequences.
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What is the IRS CP15B notice?
The IRS CP15B Notice informs you that the IRS has charged a Trust Fund Recovery Penalty (TFRP). The penalty applies when a business fails to pay employment taxes, such as Social Security and Medicare taxes withheld from employees’ wages, or excise taxes. The IRS holds business owners, directors, and sometimes employees accountable for not meeting these tax obligations.
The Trust Fund Recovery Penalty applies to businesses of all sizes, including small businesses and individual employers. When you withhold employment taxes from employee paychecks, the IRS expects those funds to be held in trust for the government. Failing to send those funds to the IRS can lead to serious consequences because the IRS takes unpaid employment taxes very seriously.
Why did you receive the IRS CP15B notice?
The IRS issued the CP15B Notice because you failed to collect, account for, or pay the required employment or excise taxes. The IRS views this as a “willful” failure, meaning you either knowingly avoided paying these taxes or acted recklessly in handling your tax responsibilities. Even if you were unaware of the problem, the IRS may still hold you responsible if it believes you should have known.
Before sending the CP15B Notice, the IRS conducts an investigation. If it finds that you, or someone in your business, had control over financial matters and failed to pay the taxes, the IRS assesses the TFRP. This penalty may apply to business owners, partners, directors, or any employee responsible for managing tax payments.
Pro Tip
Consult a tax professional as soon as you receive the IRS CP15B Notice. They can guide you through the process of disputing or arranging payment, helping you avoid costly mistakes.
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How the IRS CP15B notice impacts your business
The IRS CP15B Notice can have serious effects on your business. The Trust Fund Recovery Penalty can lead to personal liability, meaning the IRS may go after your personal assets if your business cannot cover the unpaid taxes. The IRS holds individuals involved in the company’s financial decisions responsible, making them liable for the tax debts.
If you ignore the notice, interest will build up, increasing the total amount you owe. The IRS may also take aggressive actions to collect, such as levying your bank accounts or garnishing wages, which can severely disrupt both your business and personal finances.
Consequences of ignoring an IRS CP15B notice
Ignoring the IRS CP15B Notice leads to significant financial consequences. Interest will continue to grow on the unpaid amount, adding to what you owe. If you do not respond, the IRS may take collection actions such as placing liens on your property, seizing assets, or levying your bank accounts.
Additionally, failing to address the notice could result in legal actions against you. The Trust Fund Recovery Penalty is one of the most aggressive penalties the IRS uses, so it’s important to take immediate action.
What to do if you receive an IRS CP15B notice
If you receive an IRS CP15B Notice, act quickly to avoid further penalties. Follow these steps:
- Read the notice thoroughly. Understand the penalty amount, payment options, and due date.
- If you agree with the penalty, pay it as soon as possible to avoid accumulating interest.
- If paying the full amount isn’t feasible, apply for a payment plan, such as an installment agreement, on the IRS website.
- If you disagree with the penalty, dispute it. Pay the penalty tied to one employee for each quarter, then submit a refund claim.
- If you’re unsure about the process or the penalty amount, consult a tax professional, especially if the penalty is substantial.
Pro Tip
If you apply for a payment plan, make sure to stay on top of your monthly installments. Missing a payment could result in additional penalties or cancellation of the agreement.
How to dispute an IRS CP15B notice
Disputing an IRS CP15B Notice is possible, but you need to follow specific steps. If the penalty seems wrong, take these actions:
Steps to dispute the IRS CP15B notice
- Pay the minimum amount : Before disputing the TFRP, pay the penalty related to one employee’s withheld tax for each quarter in question.
- File Form 843 : Submit Form 843, Claim for Refund and Request for Abatement, to request a refund or a penalty reduction.
- Post a bond : To pause collection efforts during the review, post a bond with the IRS. The bond must be 1.5 times the balance owed.
- Await a response : Once the claim is filed, the IRS reviews your case. If they find the penalty was incorrectly assessed, they will refund your payment and abate the penalty.
Pro Tip
Keep detailed financial records, especially regarding payroll taxes, to avoid future penalties. Accurate documentation can also help in case you need to dispute a TFRP assessment.
IRS payment options for the CP15B notice
If paying the full penalty isn’t an option, the IRS provides different payment plans to ease the financial burden:
Installation agreements
You can apply for an installment agreement, which allows you to spread the payments over time. Use the IRS online application process to set up the plan. Once approved, you can make monthly payments, which lowers the risk of additional penalties or interest.
Offer in compromise
If paying the full penalty would cause severe financial hardship, you may qualify for an Offer in Compromise (OIC). This option allows you to settle the debt for less than the full amount if you can provide financial difficulty.
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Frequently asked questions
What is the trust fund recovery penalty?
The Trust Fund Recovery Penalty (TFRP) is charged when someone responsible for withholding and paying employment taxes fails to do so. It applies to taxes such as federal income, Social Security, and Medicare taxes withheld from employees’ wages, as well as excise taxes. The IRS holds individuals, not just the business, responsible for unpaid taxes, so immediate action is necessary.
Who can be held responsible for the TFRP under the IRS CP15B notice?
Anyone with decision-making authority over a business’s finances can be held responsible for the Trust Fund Recovery Penalty. This includes business owners, directors, officers, and employees in charge of collecting and paying taxes. If they will completely fail to meet tax obligations, they can be personally liable under the IRS CP15B Notice.
What happens if the IRS CP15B notice is ignored?
Ignoring the IRS CP15B Notice leads to serious consequences. The IRS will continue charging interest on the unpaid penalty, increasing the total owed. The IRS may also take collection actions, such as placing liens on property, garnishing wages, or levying bank accounts. Prolonged inaction could lead to legal consequences for the responsible party.
Can the trust fund recovery penalty be reduced or waived?
In some cases, the TFRP can be reduced or waived, especially if there’s a valid reason to dispute the penalty. To request a reduction or waiver, file Form 843, Claim for Refund and Request for Abatement. The IRS reviews the claim and decides if a reduction or abatement is justified. Usually, a portion of the penalty must be paid before submitting this claim.
How long does it take to resolve the IRS CP15B notice?
The time needed to resolve a CP15B Notice depends on how quickly the taxpayer responds and the complexity of the case. If full payment or a payment plan is arranged, resolution can be quick. However, disputing the penalty may take longer, especially if additional documents or a bond is required. Tax professionals can help speed up the process by ensuring all necessary paperwork is correctly submitted.
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.
| 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 IRS CP15B Notice indicates you’ve been charged a Trust Fund Recovery Penalty for failing to pay employment or excise taxes.
- You can either pay the penalty in full or apply for a payment plan through the IRS to settle the balance over time.
- If you disagree with the penalty, you can dispute it, but you must pay a portion of the penalty and file Form 843 to request a refund.
- Ignoring the notice can lead to escalating interest, penalties, or legal action from the IRS.
- Seeking assistance from a tax professional can help ensure you respond appropriately and avoid further complications.
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