Why did I receive the Penalty Notice 972CG from the IRS after filing my ACA 1095-C Forms?
354 views | Last modified 11/3/2023 3:10:42 AM EST | Added by ACAwise Team

Once you file your ACA 1094 & 1095 forms with the IRS, here are some potential reasons why you received the 972CG penalty notice under IRC Section 6721.

• Late filing of your ACA Form 1094-C/ Form 1095-C
• Filed using the incorrect media (Electronic filing required but filed through the paper)
• Filed with missing or incorrect TIN/Name 
• Filed in an incorrect format (unprocessable)
• Any combination of the above

Information in the received penalty notice 972CG

If you have received the penalty notice 972CG from the IRS comprising of the following, you need to respond to it within 45 calendar days from the notice date. Foreign filers can file within 60 days. This notice will provide the following:

• The explanation for the proposed penalty and how to respond to the notice.
• A record of each submission considered in the penalty, including the form type, date received (if not filed on time), whether the returns were original or corrected, the transmitter control code (for electronic filers), and the type of penalty that applies (late, incorrect TINs, etc).
• A list of ACA returns filed with missing or incorrect name/TIN combinations.
• Summary of the proposed penalty imposed under IRS Section 6721.
• The notice will have a response page and payment/correspondence slip.

If you need more time to respond, you can submit a written statement signed by the person required to file the return. Send this to the address listed on the notice. Please note, requests must be sent before the end of the 45 or 60 day period for consideration.

If you fail to respond to the Notice 972CG within 45 days, the IRS will charge the full amount of the penalty issuing a balance due notice (CP15 or CP215).

Penalties for Failure to Comply with the IRS

Under IRC 6721, the IRS will impose a penalty ranging from $50 to $260 for each information return that doesn’t meet the filing criteria.

If a return submitted by you has more than one error, the IRS will impose the highest penalty amount for the return.

• For example, if you submit a 1095-B or 1095-C form filed 30 days late with an incorrect TIN, then the penalty will be $260 for the return.

However, the reasonable cause was accepted for TIN failure by the IRS, the late filing penalty of $50 is still applicable to the employer.

If you have received a penalty Notice 972CG from the IRS and not sure how to respond to it, get in touch with our ACAwise team. We will assess to inform you of your options and provide clear instructions for proceeding further.

You can also choose ACAwise for your complete ACA reporting requirements. We take care of validating your employee’s data with TIN matching, IRS business rules, USPS address validations and then accurately e-file your 1094 & 1095 forms with the IRS on-time. We also distribute copies of the 1095-C form to your employees. This way, we prevent you from ever receiving the penalty Notice 972CG from the IRS!