If you've received an IRS CP162A notice, you're not alone — it's one of the most common penalty notices the IRS sends to partnerships and S-corporations, and for many NYC small business owners it's the first sign something went wrong with a tax filing. Here's what a CP162A means, what it costs, and how to respond.

What Is a CP162A Notice?

A CP162A is a penalty notice the IRS issues when a business return — usually Form 1065 (partnerships) or 1120-S (S-corporations) — was filed late, filed incompletely, or not filed electronically when required. It is a failure-to-file penalty, separate from any tax you may owe.

How Much Is the CP162A Penalty?

This is what surprises owners most: the penalty is charged per partner or shareholder, for every month the return is late — currently around $245 per partner, per month (the IRS adjusts the amount each year), for up to 12 months. A small two-partner business just three months late can already owe roughly $1,500.

Why Did You Get a CP162A?

Can the CP162A Penalty Be Removed?

Often, the penalty can be reduced or even removed entirely — but it is time-sensitive and easy to get wrong. The IRS offers specific relief programs, each with strict eligibility rules and deadlines, and a single incorrect answer on the request can get it denied. This is not a notice you want to guess your way through.

What to Do If You Received a CP162A

  1. Don't ignore it — the penalty grows every month the return stays unfiled.
  2. Don't just pay it assuming you have to — you may qualify for removal.
  3. File any missing or corrected return right away.
  4. Have a CPA review your notice to determine whether you qualify for relief and to handle the request correctly.

NYC Small Business Owners: We Can Help

At Li CPA Group, we help New York City partnerships and small businesses respond to CP162A notices — reviewing your situation, determining whether the penalty can be removed, and handling the request with the IRS for you.