Received IRS Notice CP162? Here Is What to Do Immediately
Updated June 2026 · Reviewed by a Form 5472 specialist
Updated June 2026 · Reviewed by a Form 5472 specialist
The short answer
Key takeaways
CP162 is the IRS notice issued after a penalty is assessed for a return filed late, filed incompletely, or not filed at all. For a 25%-foreign-owned US LLC it is sent in over 90% of cases because a Form 5472 was missed — the penalty starts at $25,000.
CP162 is a computer-generated assessment, not a letter from a human examiner. The IRS systems flag an entity that was required to file an information return and did not — or filed it after the deadline — and the penalty is charged automatically. The notice tells you the tax period, the amount assessed, and the date by which you must pay or respond.
For foreign-owned single-member LLCs the trigger is nearly always a missing or late Form 5472. Because forming and funding the LLC counts as a reportable transaction, virtually every foreign-owned SMLLC has a reportable transaction, so almost all must file — and the IRS expects that return. If you have not filed yet, read missed Form 5472 before you do anything else.
The base penalty is $25,000 per Form 5472, per year, per entity, under IRC §6038A(d). There is no maximum cap. After a 90-day IRS demand, an additional $25,000 accrues for every 30 days the failure continues — so three missed years can mean $75,000 or more.
The amount on your CP162 depends on how many years and how many forms were missed. Each year is a separate $25,000 charge, and because there is no statute of limitations on an unfiled information return under IRC §6501(c)(8), a year missed long ago can still be assessed today.
| Years missed | Base penalty | After 90-day demand (per 30 days) |
|---|---|---|
| 1 year | $25,000 | +$25,000 / 30 days |
| 2 years | $50,000 | +$25,000 / 30 days |
| 3 years | $75,000 | +$25,000 / 30 days |
Source: IRC §6038A(d); §6501(c)(8); IRS Instructions for Form 5472. Verified June 2026.
See the full breakdown on the Form 5472 penalty page so you can confirm the figure on your notice is correct.
Most CP162 notices give roughly 30 days from the notice date to pay or dispute the penalty. The exact deadline is printed on the notice. The underlying Form 5472 obligation, however, has no statute of limitations — it never expires until you file.
Two clocks matter here. The first is the response date on the notice itself — pay, set up a plan, or send a written dispute by that date to keep your options open. The second is the underlying filing clock, which never stops: until the missing Form 5472 is on file, the IRS can assess additional periods and the post-demand $25,000-per-30-day penalty can keep stacking.
| Clock | What happens |
|---|---|
| Notice response date (~30 days) | Pay, arrange a plan, or dispute the penalty in writing |
| 90-day IRS demand | Failure to file triggers +$25,000 every 30 days |
| Statute of limitations | None — the Form 5472 obligation never expires until filed |
Source: IRC §6038A(d); §6501(c)(8); IRS CP162 notice guidance. Verified June 2026.
The single most important move is to stop the clock by filing. Start with missed Form 5472.
You file the missing Form 5472 with a pro forma Form 1120 — you cannot e-file a foreign-owned disregarded entity. Mail it to P.O. Box 149342, Austin, TX 78714-9342 or fax 855-887-7737, the only two accepted methods, then attach a reasonable-cause statement.
A foreign-owned single-member LLC is a disregarded entity, so there is no e-file path — the IRS only accepts the pro forma Form 1120 with Form 5472 attached by mail or fax. Keep your certified-mail receipt or fax confirmation; that proof of filing is what you will reference if you dispute the penalty.
| Method | Where | Proof to keep |
|---|---|---|
| P.O. Box 149342, Austin, TX 78714-9342 | Certified-mail receipt | |
| Fax | 855-887-7737 | Fax transmission confirmation |
Source: IRS Instructions for Form 5472 (foreign-owned U.S. disregarded entity). Verified June 2026.
With the late filing, include a signed statement explaining why it was late — for example, you did not know the disregarded-entity-as-corporation rule applied (in effect since 2017 under T.D. 9796). The IRS may abate the penalty for reasonable cause; read Form 5472 penalty abatement for what qualifies. We prepare the filing but do not provide IRS representation.
Sometimes. The IRS may abate the $25,000 penalty if you show reasonable cause and file the missing Form 5472. There is no guaranteed relief, and first-time abatement does not apply to international information-return penalties like §6038A.
Reasonable cause means you exercised ordinary business care but still could not file on time — common examples include reliance on a professional who failed to advise you, or a genuine lack of awareness that a foreign-owned LLC must file Form 5472 at all. The first-time-abatement administrative waiver that covers many domestic penalties does not extend to §6038A, so reasonable cause is usually the only path.
File first, then request relief in writing referencing the CP162 notice number. The full criteria are on the penalty abatement page. Note that we do not act as your representative before the IRS.
No. CP162 is an automatic penalty notice, not an audit. It is triggered by a missing or late filing in IRS systems, not by an examiner reviewing your numbers. Fewer than 1% of these notices are connected to an actual examination.
It is easy to panic and assume CP162 is the start of an audit. It is not. The notice is a systemic assessment generated because a required return was not received on time. An audit is a separate process where an examiner requests records and reviews your reporting in detail.
That said, an unfiled Form 5472 can raise your overall profile, and the two can overlap. If you want to understand what actually triggers examinations, read Form 5472 IRS audit: what triggers it and how to survive.
No. CP162 is an IRS penalty for a tax filing like Form 5472. BOI is a separate FinCEN matter, and under the March 2025 interim final rule, US-formed entities — including foreign-owned US LLCs — are exempt from BOI. Form 5472 is still required.
People often confuse the two because both involve foreign ownership. They are unrelated. Beneficial ownership information (BOI) reporting is administered by FinCEN, not the IRS. Per FinCEN’s March 2025 interim final rule, only foreign reporting companies must file BOI; US-formed entities, including foreign-owned US LLCs, are exempt.
Your CP162 notice has nothing to do with BOI — it is purely a Form 5472 / Form 1120 information-return penalty. Do not let a BOI exemption make you think the Form 5472 obligation went away. Confirm whether you need to file with the do I need to file qualifier.
Filing the missing return is the cheapest move by far: a flat $299 at form5472.tax versus a $25,000 penalty per year left unresolved. Competitors charge $547 (form5472.online) or $1,999/year (doola) for the same filing.
The math is stark. Leaving a CP162 penalty unaddressed keeps a $25,000 charge — and post-demand accruals — on your account. Filing the missing Form 5472 with the pro forma Form 1120 for a flat $299 stops the underlying failure and gives you the documented filing you need to request abatement.
| Option | Cost |
|---|---|
| Leave CP162 unresolved | $25,000+ per form, per year |
| form5472.tax — file the missing return | $299 flat |
| form5472.online | $547 |
| doola annual compliance | $1,999/year |
Source: published competitor pricing; IRC §6038A(d). Verified June 2026.
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We prepare and file your missing Form 5472 and pro forma 1120 for a flat $299 — a fraction of the $25,000 penalty. Or message us first and we answer every question.