IRS Notice CP162: What It Means and What to Do
The CP162 tells a partnership (or similar entity) that the IRS charged a penalty because its return was not filed electronically when e-filing was required. Related versions (CP162A, B, C and E) cover partnership or S corporation returns that were late or incomplete. You can pay the penalty or, if it doesn't apply to you, ask the IRS to remove it.
CP162 key facts
| Official name | We charged you a penalty because you didn't file your return electronically, as required |
|---|---|
| Who gets it | Businesses |
| Severity | 3 of 5: Moderate: respond by the deadline It is a penalty bill with a payment date, and relief may be available, but there is no enforcement yet. |
| Response window | If you agree with the penalties, mail your full payment by the date shown on your letter to avoid additional interest charges. |
| Deadline basis | The date printed on the notice. |
Severity is RAHA Financials' own 1 to 5 rating of how urgent the notice usually is. It is not an IRS classification.
How long do I have to respond to a CP162?
Use the date printed on your notice. The IRS doesn't give a fixed number of days for CP162. Use the date printed on your notice.
The date printed on your notice always controls. Open CP162 in the IRS Notice Decoder.
Why did I get a CP162?
Common reasons include:
- A partnership required to e-file filed on paper (partnerships with more than 100 partners must e-file, and beginning in 2024 partnerships that file 10 or more returns of any type during the year must also e-file)
- A partnership or S corporation return was filed late or was incomplete (CP162 variants)
- No approved waiver of the electronic filing requirement was on file
- A REMIC filing Form 1066, which is treated as a partnership for this penalty, did not e-file
What should I do?
- Read the notice to see which penalty was charged (e-filing, late filing or incomplete return) and for which tax period.
- If you agree, pay the full amount by the date on the notice to avoid more interest.
- If you believe e-filing wasn't required (the IRS CP162 page mentions having fewer than 101 partners) or you had an approved e-file waiver for that year, have an authorized person call the number on the notice and be ready to provide proof. Note that the Form 1065 instructions say that, beginning in 2024, partnerships filing 10 or more returns of any type during the year must also e-file, so check which rule applied to your tax year.
- If required information was missing through no fault of your own, send a signed written explanation asking for reasonable cause relief.
- Take steps so future returns are filed on time, complete, and electronically if required.
What documents do I need?
- The CP162 notice
- A copy of the return as filed and proof of the filing date
- Records showing the number of partners for the year
- Any approved electronic filing waiver
- Form 2848 if a representative will contact the IRS
What should I avoid?
- Don't have someone call who isn't authorized; the IRS limits who may discuss the partnership's account.
- Don't ignore the payment date; interest may be added after it.
- Don't file future returns on paper if e-filing is required.
What if I disagree with a CP162?
If you believe the penalty was charged in error, for example because e-filing wasn't required for that year or you had an approved e-file waiver, an authorized person may call the number on the notice and provide proof. The IRS CP162 page cites having fewer than 101 partners; the Form 1065 instructions add that, beginning in 2024, partnerships filing 10 or more returns of any type during the year must also e-file. If you couldn't obtain required information through no fault of your own, submit a signed written explanation asking for a reasonable cause waiver. The IRS page says only the tax matters partner, or someone that partner authorizes with Form 2848, may contact the IRS on the partnership's behalf; for corporations, an officer may call.
What happens if I ignore a CP162?
If the penalty isn't paid by the date on the notice, interest may be charged on the unpaid amount, and the balance may move into further collection notices.
What else should I know about CP162?
The IRS now splits this notice family by reason. The current CP162 page covers only the failure-to-e-file penalty. CP162A covers returns that were late or not e-filed, CP162B covers incomplete returns or returns not e-filed, and CP162E adds a missed partnership tracking report, so check the exact code printed on your notice. The e-file defenses are fact-based: the CP162 page points to having fewer than 101 partners or an approved waiver, but the Form 1065 instructions add a second trigger, so that beginning in 2024 a partnership filing 10 or more returns of any type in the year (including Forms W-2 and 1099) must also e-file. A small partnership with employees or contractors can therefore be required to e-file even with only a few partners. Having partner counts, a count of returns filed for the year, or the waiver letter ready often settles the question quickly.
Want a professional to handle your CP162 response?
IRS Notice Response Plan
Fixed price, quoted before any work startsFixed fee.
- Review of your notice and account transcript
- A written plan: agree, partly agree, or dispute
- Draft response and list of supporting documents
- Deadline tracking so nothing lapses
CP162: frequently asked questions
What information must the return include?
The IRS says all information listed in the return's official instructions must be included.
What if we couldn't get the missing information?
If you couldn't obtain the information through no fault of your own, send a written explanation asking the IRS to waive the penalty for reasonable cause.
Who can call the IRS about this notice?
The IRS CP162 page says only the tax matters partner, or someone the tax matters partner authorizes using Form 2848, may contact the IRS on the partnership's behalf. For corporations, an officer may call.
Does this apply to a REMIC?
Yes. The IRS says REMICs filing Form 1066 are treated as partnerships for this penalty.
Our partnership has fewer than 101 partners. Does that mean the penalty is wrong?
Not necessarily. The IRS CP162 page lists fewer than 101 partners as a possible reason the penalty doesn't apply, but the Form 1065 instructions say that, beginning in 2024, partnerships that file 10 or more returns of any type during the tax year (including information, income tax, employment tax and excise tax returns) must also file electronically. Check which rule applied to the year on the notice.
