Can I get first time penalty abatement for late Form 5472 filed with a late 1120 return?

You're in luck! First Time Abatement (FTA) is definitely something you should pursue in your situation. The IRS does offer this relief for taxpayers with a clean compliance history, which sounds like you have. For the Form 1120, the FTA can typically be requested for failure-to-file and failure-to-pay penalties. You can request this either by calling the IRS directly or responding to the notice you received with a written request explaining that this is your first time being late and that you have a history of timely filing and payment. However, Form 5472 penalties are a bit different. The standard penalty is $25,000 per form per year (or $10,000 for older years), and these penalties are sometimes considered "international information return" penalties rather than standard late filing penalties. The good news is that many taxpayers have successfully had these waived through reasonable cause requests, especially when it's a first-time issue. I would recommend requesting FTA for both penalties in the same letter, explaining your supplier issues as reasonable cause, and emphasizing your prior perfect compliance history.

I went through a similar nightmare with late 5472s last year when our accountant completely dropped the ball. After getting hit with massive penalties, I discovered https://taxr.ai which literally saved us thousands. You upload your notices and details about your situation, and it analyzes everything to build a customized penalty abatement request. What impressed me was that their system knew exactly how to frame the argument for Form 5472 penalties specifically - apparently the approach is different than for regular late filing penalties. The letter they generated cited all the relevant IRS policies and precedents for first time abatement with international information forms. We submitted exactly what they recommended and got the entire penalty waived.

Following up on my question about taxr.ai - I decided to try it after seeing the response here. Our CPA had estimated we'd be hit with at least $20K in penalties for our late 5472s. The system was surprisingly straightforward - uploaded our rejection notice, answered questions about our filing history and the reasons for lateness. It generated a letter that specifically addressed the "reasonable cause" requirements for international information returns, which apparently is the key approach for Form 5472 penalties. We submitted exactly what it recommended, and just got notice yesterday that the entire penalty is being abated! Literally saved us $25,000. Our CPA was shocked it worked - he'd been telling us these penalties were basically impossible to get removed.

If you're getting nowhere with written requests, I highly recommend trying to reach someone at the IRS directly. I spent WEEKS trying to call about my company's penalty abatement request and literally couldn't get through. Then I found https://claimyr.com which honestly sounds like a scam but actually works - there's a demo video at https://youtu.be/_kiP6q8DX5c showing how it works. They basically hold your place in the IRS phone queue and call you when an agent picks up. I was able to speak directly with someone at the IRS who processed my first time abatement request for our late 1120 and 5472 immediately while I was on the phone. The agent told me that phone requests for FTA often get processed faster than written ones that go into a massive backlog.

Well I stand corrected on Claimyr. After my skeptical comment, I decided to try it myself since I was getting nowhere with the IRS. After three months of sending letters about my late 5472 penalties and getting zero response, I was desperate. The service got me through to an IRS agent within a day. The agent was able to review my account history, confirm I qualified for first time abatement, and process the penalty removal while I was on the phone. She even explained that my written requests had been received but were sitting in a processing queue that was months long. I hate admitting I was wrong, but in this case I'm glad I gave it a shot. Saved me $25k in penalties and who knows how many more months of waiting and worrying.

I work with foreign-owned corps and deal with 5472 issues constantly. Here's what you need to understand: Form 5472 penalties are considered "international information return" penalties, which are treated differently than regular failure-to-file penalties. For first-time abatement specifically, the key is making a reasonable cause argument rather than just relying on the standard FTA policy. Focus your request letter on: 1) Your prior compliance history (clean record) 2) The specific circumstances that prevented timely filing (supply chain disruptions) 3) Steps you've taken to ensure it doesn't happen again Don't just say "I qualify for first time abatement" - you need to build a reasonable cause case. The IRS is much more lenient with first-time issues, but they want to see that you understand the seriousness of international reporting requirements.

Slightly different experience to share - we got hit with the 5472 penalty last year (first time late) and thought it would be automatically abated under FTA. We were WRONG. Our letter simply requesting FTA was denied because we didn't provide enough "reasonable cause" documentation. Had to go back and submit a much more detailed explanation with actual evidence of the circumstances (emails showing the confusion with our foreign parent company, timeline of events, etc). Second request was approved. Don't assume the IRS will be lenient just because it's your first offense with 5472s. The $25K penalty is considered different from regular late filing penalties. Document EVERYTHING.

I've been following this thread closely since I'm dealing with a similar situation with our LLC that's foreign-owned. Just wanted to add some practical timing advice based on what happened to us. We received our penalty notice for late 5472 in January and immediately submitted our abatement request. The IRS initially denied it because we only requested "first time abatement" without providing enough detail about reasonable cause. After reading some of the experiences shared here, we resubmitted with a much more comprehensive letter that included: - Timeline of events leading to the late filing - Email correspondence showing the confusion with our foreign parent company - Documentation of our perfect compliance history (printed directly from IRS transcripts) - Specific steps we've implemented to prevent future issues The second request was approved in about 6 weeks. The key lesson for me was that 5472 penalties really do require more than just saying "this is our first time being late." The IRS wants to see that you understand the importance of international reporting and that the delay was truly due to circumstances beyond your control, not just poor planning. Also, for anyone still waiting on responses - consider calling the practitioner priority line if you have a POA on file. We were able to get status updates that way when our letter seemed to disappear into the system.

I've been through this exact scenario with our manufacturing company last year - late 1120 and 5472 due to complications with our German parent company's restructuring. What I learned from the experience might help you. First, you're absolutely right to pursue first-time penalty abatement, but as others have mentioned, the approach for 5472 penalties is more nuanced. The IRS treats these as "accuracy-related" penalties rather than simple late-filing penalties, so you need to build a stronger reasonable cause argument. Here's what worked for us: I created a detailed timeline starting from when the supplier issues began in Asia, showing how that cascaded into other business disruptions, and ultimately affected our ability to gather the necessary information for the 5472. The key was demonstrating that despite our best efforts, circumstances truly beyond our control prevented timely filing. Also, don't just focus on the supplier disruption itself - explain how that affected your internal processes. For example, if key personnel were dealing with supply chain crises instead of tax preparation, or if the chaos affected your ability to get necessary documentation from your foreign parent entity, include those details. One practical tip: if you haven't already, file the returns immediately if you haven't done so. The IRS is much more receptive to penalty abatement requests when the underlying compliance issue has been resolved. Good luck!

I've been dealing with IRS penalty abatements for over a decade, and your situation is actually quite favorable for getting relief. The combination of a clean compliance history and legitimate business disruption creates a strong foundation for both first-time abatement (for the 1120) and reasonable cause relief (for the 5472). A few critical points based on what I've seen work consistently: 1) **Timing is everything** - File your abatement request within 60 days of receiving the penalty notice if possible. The IRS is more receptive to timely responses. 2) **Documentation strategy** - Create a clear cause-and-effect narrative. Start with the supplier issues in Asia, then show specifically how this impacted your tax preparation timeline. Include dates, correspondence, and any attempts you made to meet the deadline despite the challenges. 3) **Separate but coordinated approach** - Address both penalties in one letter but use distinct arguments. For the 1120, emphasize your clean history and qualify for standard FTA. For the 5472, focus on reasonable cause while still mentioning this is your first violation. 4) **Professional language** - Use phrases like "ordinarily exercised prudent business care" and reference your "established pattern of compliance" to align with IRS terminology. The supplier disruption angle is actually quite strong for reasonable cause - international supply chain issues are well-documented business realities that the IRS generally accepts as legitimate obstacles to normal operations.