What to do After Receiving Notice CP 15 or CP 215 for Failure to Timely File Form 3520

When receiving a penalty for failure to timely file Form 3520, Notice CP 15 or CP 215 is sent to the taxpayer notifying the taxpayer which requires a timely response. When receiving Notice CP 15 or CP 215 a Taxpayer must act timely in response as there are only 30-days to respond. If a taxpayer does not wish to appeal, they do not need to do anything. A taxpayer may also dispute the penalty by first paying the penalty and then filing a claim at a later date.

If the taxpayer wishes to appeal the penalty, they should submit a persuasive written request to appeal within 30 days from the date of the notice explaining the reasonable cause for failure to report. Persuasive experienced legal advocacy will be very important. This appeal should include all relevant facts and documents supporting the taxpayer’s position.

Once a taxpayer appeals, the IRS Appeals Office conducts a de novo (meaning new and independent) review of the taxpayer’s liability and his or her reasonable cause defense. A taxpayer cannot challenge the underlying liability again in Appeals if he or she has had a prior opportunity for a conference with Appeals, however, one can pay the penalty and file a refund claim for another opportunity to contest the penalty.  Under IRM 8.11.5.1, the penalty cannot be contested after appeal denial in US Tax Court.

A well-written appeal will help the Appeals Officer understand the taxpayer’s arguments and persuade the officer that the taxpayer is correct. Taxpayers who have received this notice should contact Patel Law Offices. Over the years, our office has successfully represented numerous taxpayers with protests of Form 3520 penalties.

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