What the notice means
The IRS notice page is short: “We sent you this notice because we charged you a civil penalty.” The CP215 is notice and demand for a penalty that is not tied to a return's tax module. Miscellaneous civil penalties post to a civil penalty module (MFT 13 for business taxpayers, MFT 55 for individuals) with a penalty reference number (PRN) that identifies the penalty. The PRN is the key to the response; if the notice does not show it, the account transcript for the civil penalty module will.
When an examiner assesses one of these penalties, IRM 20.1.10.4.2.2 explains the mechanics: “Form 8278 not only generates the codes on IDRS, but also initiates CP 215 to be generated and issued to the taxpayer.”
Why the client got it
| Source | What happened | IRM |
|---|---|---|
| Combined Annual Wage Reconciliation (CAWR) | Forms W-2 filed with SSA did not reconcile with Forms 941 or W-3, or were late or incorrect. PRN 549 (intentional disregard) or PRN 550 (failure to file timely or correctly). | IRM 5.1.15.7.1 |
| Examination | An examiner assessed a miscellaneous civil penalty on Form 8278 (for example, information return penalties found in an exam). | IRM 20.1.10.4.2.2 |
| Exempt organizations | Penalty for failing to submit the IRC 506 notification (Form 8976), PRN 713. | IRM 21.7.7.6.23.1; IRM 21.3.8.10.2.8 |
| Other civil penalties | Various penalties assessed on MFT 13 or 55 under their own programs. | IRM 20.1.10 |
For employers, the CAWR path is the most common. IRM 5.1.15.7.1 says employers who do not comply with a request to file correct Forms W-2 are assessed the intentional disregard penalty under IRC 6721(e), and “A CP 215 generates advising the employer of the actual penalty assessment.” For late, missing or incorrect W-2s, the penalty “will appear as a MFT 13, with PRN 550, and a CP 215 is sent to the employer.” For Form 1099 penalties proposed on Notice 972CG, see the 972CG guide on TIN Compliance.
Deadlines and what happens if they pass
The CP215 gives a short window. For the IRC 506 penalty, IRM 21.3.8.10.2.8 describes the three options the notice offers: pay; appeal in writing within 10 days if the organization disagrees or has reasonable cause; or, for any other reason or after the 10 days, pay the penalty and file Form 843 within 2 years from payment.
The 10-day window is not a bar to relief. IRM 21.7.7.6.23.1 instructs: “A taxpayer’s request for penalty relief cannot be refused simply because they failed to respond to the CP 215 within 10 days.” For the CAWR intentional disregard penalty, IRM 5.1.15.7.1 says “The PRN 549 penalty cannot be abated after the 10 day time frame of the CP 215 unless proof of timely filing or reasonable cause can be established,” which means a late request needs evidence, not that it is foreclosed.
Interest: the IRS page says interest is not charged if the full amount is paid by the notice due date, “However, interest adds up on the unpaid amount after that date.”
How to respond
- Identify the penalty. Pull the civil penalty module transcript (MFT 13 or 55) and note the PRN, tax period and assessment date. The PRN tells you which Code section and which IRS function owns the penalty.
- Get the underlying file. For CAWR penalties, gather the W-2s and W-3 as filed, the SSA acknowledgment, the 941s for the year and any IRS correspondence requesting corrections. For an exam assessment, get the examiner's report and penalty lead sheet.
- Choose the ground. Proof of timely and correct filing (the penalty is wrong), reasonable cause under the governing regulation (for information returns, Treas. Reg. 301.6724-1; see the reasonable cause regulation guide), or a computation error.
- Respond in writing within 10 days if possible to the address on the notice, with the notice copy, a signed explanation and the evidence. IRM 5.1.15.7.1 says documentation must accompany the abatement document, so send it all at once.
- If the window has passed, send the same request anyway, or pay and file Form 843. See writing a penalty abatement request.
- Pay or arrange the balance if relief is unlikely, to stop interest. The IRS page points to payment plans.
What the IRS does next
The function that owns the penalty reviews the response. If relief is granted, the penalty is reversed on the civil penalty module (a TC 241 for the amount removed, per IRM 21.7.7.6.23.1). If not, the IRS issues a denial with appeal rights, and the balance follows the normal collection path: reminder notices, then intent to levy. See appealing a denial and the collection process.
Related notices
- CP161: balance due on a business return module, rather than a civil penalty module.
- CP162 series: partnership and S corporation filing penalties.
- Letter 1153: the proposed trust fund recovery penalty, which is assessed on a civil penalty module only after a 60-day preliminary notice.
- CAWR employers can also read the CAWR W-2 reconciliation guide.
Transition to Automatic Exemption from Penalty. The IRS First Time Abate page (reviewed October 2026) says FTA “is transitioning to a new relief called Automatic Exemption from Penalty (AEP), starting Summer 2026”. For Forms 1040, 1065 and 1120, Forms 940 through 945 and Form CT-1, beginning with 2025 tax year returns and 2026 quarterly returns, AEP is applied when the original return completes processing: with three prior years (or 12 consecutive quarters) of timely filing and payment, “The IRS won’t assess penalties for failure to file, failure to pay, or failure to make a deposit” and sends a letter saying the relief was applied; “You don’t need to contact the IRS or respond to the notice.” FTA continues to apply to earlier periods and to returns AEP does not cover, and the page says to contact the IRS if a penalty was assessed that should have qualified. See First Time Abate.
Questions practitioners ask
Is a CP215 the first notice about the penalty?
Sometimes. Some penalties are proposed first; the trust fund recovery penalty, for example, requires a Letter 1153 before assessment. Others, like the IRC 506 notification penalty, are assessed automatically and the CP215 is the first notice.
We missed the 10-day window. Is relief still possible?
Yes. IRM 21.7.7.6.23.1 says a relief request cannot be refused simply because the 10-day window passed; it is considered under reasonable cause rules. For the CAWR PRN 549 penalty, the request needs proof of timely filing or reasonable cause.
Where is the penalty on the transcript?
On a separate civil penalty module (MFT 13 for businesses, MFT 55 for individuals), as a TC 240 with a penalty reference number. It will not appear on the 941 or 1040 module transcript.
Can we appeal a CP215 penalty?
After a written request is denied, the denial letter explains Appeals rights. Some civil penalties can also be paid and contested through a refund claim and suit.
Does First Time Abate apply?
FTA covers failure to file, failure to pay and failure to deposit penalties under IRC 6651, 6698, 6699 and 6656. Most CP215 penalties are other civil penalties, so reasonable cause is usually the route.