How does an employer respond to the notice 972CG?
356 views | Last modified 1/11/2021 12:21:51 PM EST | Added by ACAwise Team

The employer receives a penalty notice 972CG with the proposed penalty from the IRS under IRC section 6721 for late or incorrect filings. 

When the employer receives the Notice, they must respond to it within 45 calendar days from the date on the Notice to eliminate the proposed penalty and a balance due Notice (CP15 or CP215) from the IRS.

Here's how the employer can respond to Notice 972CG 

You will have a response page, and payment/correspondence slip in the received penalty notice, which is for the employers to respond to the IRS for the proposed penalty.

Three-course of action

In the correspondence slip portion, the employer has three checkboxes (A, B, and C). 

After reading the information in the penalty notice, the employer can check box (A) with the signature and date if they agree with the proposed penalty. Any employer choosing this option should follow the payment instructions provided in the Notice.

Next, if the employer partially disagrees with the Notice, the employer can check box (B).

If the employer entirely disagrees with the Notice, the employer will check box (C).

Seeking Waiver

When the employer checks the box (B) and (C), the employer must submit a written statement to the IRS explaining why the employer disagrees with the IRS penalty Notice.

The statement is to convince the IRS, the employer's late filing (or incorrect filing) of the Forms 1094-C and 1095-C was due to a "reasonable cause."

The written statement must also contain the signature of the person required to file the return and the declaration made under penalties of perjury.

Letter 1948C

When the IRS reviews the written statement, it may issue a letter 1948C to the employer asking for additional information to support the request to waive the proposed penalty.

The letter 1948C is also issued if the submitted written statement was accepted by the IRS, and the proposed penalty will not be assessed.

Letter 854C

If the submitted written request does not establish a reasonable cause or partially establish a reasonable cause, the penalty will be assessed. The IRS will send the letter 854C, explaining the reason for denial, including the employer's appeal rights.

When there is no response to the penalty notice 972CG within 45 calendar days, the IRS will charge the full amount of the proposed penalty by issuing a balance due notice (CP15 or CP215).

So, any employers who receive a Notice 972CG must take action immediately. If you are not confident about how to respond to it accurately, you can get in touch with ACAwise at (704)-954-8420 or email your concerns along with the Notice you have received to [email protected]. We offer a free assessment of your options and instructions to proceed further.