Template from tincompliance.com. A written appeal to the IRS Independent Office of Appeals after Letter 854-C denies a Notice 972CG reasonable-cause request. Under IRM 4.19.25.17.3 any relief request after an 854-C is treated as an appeal; the examiner first re-reviews the case for abatement and, if not abated, forwards it to Appeals with Letter 86-C. The request must be signed by the taxpayer or by a representative under Form 2848 that lists "Civil Penalty", the form series and the years; Form 8821 and a Level H (unenrolled preparer) 2848 are not accepted (IRM 4.19.25.17.3.1). An unsigned request with a phone number gets one call and three business days to fax a signature; otherwise the case is closed. Not legal advice; have your adviser review.
[Company legal name]
EIN: [00-0000000]
[Address]
[Date]
Internal Revenue Service
[Address shown on Letter 854-C]
Re: Appeal of penalty under IRC 6721; Letter 854-C dated [date]; Notice 972CG dated [date]; tax year [year]; Forms [1099-NEC / other]; penalty reference number [PRN on the letter]
Request for Appeals consideration
Dear Sir or Madam:
[Company] appeals the denial in the above letter of its request for waiver of the information return penalty for reasonable cause, and requests that the case be forwarded to the Independent Office of Appeals. [Company] also requests that the examiner re-review the case for abatement on the basis of the information in this letter before forwarding it, as IRM 4.19.25.17.3 provides.
1. The reason stated in Letter 854-C and the response to it
Quote the open paragraph of the 854-C and answer it directly. The IRS does not request the same information twice and sends only one 854-C per account; this is the place to cure exactly what it named.
The letter states that the request was denied because [quote the reason]. [Respond specifically: for example, "The annual solicitations for the listed payees were made by first-class mail on [dates]; copies of the letters and the mailing log are enclosed as Exhibit A. The earlier response described the solicitations but did not enclose them." / "The returns were filed electronically through [FIRE / IRIS] on [date]; the acknowledgment is enclosed as Exhibit B and shows the filing fell within the [tier]." / "The prior response was signed by [title]; this appeal is signed by [officer]."]
2. Reasonable cause
[Company] acted in a responsible manner before and after the failure and the failure was due to [a significant mitigating factor / an event beyond its control], as follows.
Reacted timely: [what was done on discovery, with dates].
Prevention: [what changed, with dates, and the current-year result: [count] failures on [count] returns compared with [count] on [count] the prior year].
Factor: [compliance history / first-time filer / event, with the documentary evidence enclosed].
[For TIN failures:] The solicitation schedule for each listed payee is enclosed as Exhibit A; each annual solicitation was made by [mail / telephone].
3. Additional grounds
Delete what does not apply.
- Supervisory approval: the penalty was sustained after an examiner evaluated [Company]'s response. [Company] requests confirmation that written supervisory approval under IRC 6751(b) was obtained before the assessment, as IRM 4.19.25.6 requires once a response has been evaluated.
- Filer size: the penalty was computed with the [large] filer maximums. [Company]'s average annual gross receipts for [years] were $[amount], and the [small] filer maximums apply (IRC 6721(d); IRM 4.19.25.7.1.14).
- Returns not required: [count] of the listed returns were below the reporting threshold and should be removed from the count.
- Tier: the returns were filed on [date], within the [tier] period; the notice charged the [higher tier].
- Statute: the returns were due [date] and filed [date]; the assessment on [date] falls outside the three-year period of IRC 6501 [if applicable].
4. Request
[Company] requests that the penalty be abated in full [or: reduced to $[amount] as computed in section 3]. If the examiner does not abate, [Company] requests forwarding to the Independent Office of Appeals and a conference. [Company] requests that collection be held while the appeal is pending. Please direct correspondence to the address above and questions to [name, title], [phone], [email].
Under penalties of perjury, I declare that I have examined this appeal, including the accompanying exhibits, and to the best of my knowledge and belief it is true, correct and complete.
[Signature]
[Name], [Title: an officer of the company, or a partner]
[Date]
Enclosures: Letter 854-C; Notice 972CG; Exhibit A, solicitation letters and mailing log; Exhibit B, filing acknowledgment; [Form 2848, if a representative signs]
Form 2848 checklist for a representative
☐ Form 2848, not Form 8821. An 8821 authorizes disclosure only and is not accepted for an appeal.
☐ Representative is an attorney, CPA or enrolled agent (Levels A, B or C), not an unenrolled preparer (Level H).
☐ Line 3 description of matter: "Civil Penalty" (not "Income").
☐ Line 3 tax form number: the information return series, for example "1099" or "1099-NEC".
☐ Line 3 years or periods: each calendar year on the notice, listed.
☐ Signed and dated by the taxpayer's officer and by the representative, with the representative's CAF number.
☐ A copy attached to this appeal; the original faxed to the CAF unit.