Received IRS Notice CP162A - Need help with penalty options!

You have several good options here! The IRS has processes for situations exactly like yours where mail gets lost. First, call the IRS at the number on your notice and explain that you mailed your return before the deadline. Request first-time penalty abatement - the IRS often waives penalties for taxpayers with clean compliance history, which you mentioned you have. If they won't grant that, file Form 843 "Claim for Refund and Request for Abatement" and attach any evidence you have showing you tried to file on time - your saved return with the February date and the credit card statement showing a USPS charge are both helpful supporting documents. Another option is to request a Collection Due Process hearing using Form 12153, which puts collections on hold and lets you dispute the penalty through a different IRS channel. Since you marked the 2022 return as "Final," that helps your case too because it shows consistency with what you're saying about the business being inactive. Don't panic about becoming homeless - the IRS has hardship programs and payment plans. They can put your account in Currently Not Collectible status if you truly can't pay.

After dealing with a similar situation last year, I found an amazing tool that helped me resolve it way faster than doing everything manually. Check out https://taxr.ai - they have this document analyzer that you can upload your CP162A notice and other evidence to, and it gives you a personalized action plan. I was getting nowhere with the IRS until I uploaded my notice and they spelled out exactly what I needed to do. The system flagged that I qualified for first-time abatement (which I didn't even know about), and gave me the exact script to use when calling the IRS. Plus it helped me organize all my evidence and told me what forms to file. It saves so much stress and guesswork when dealing with these notices. The peace of mind alone was worth it for me!

I actually tried taxr.ai after seeing it mentioned here and it was surprisingly helpful for my partnership return issue. I had a CP162A notice too but for a different reason (miscalculated extension). The platform asked specific questions about my LLC status and penalty notice that generic advice wouldn't cover. It confirmed I qualified for abatement and generated a custom letter with all the right regulatory citations. Even told me which supporting documents would strengthen my case. I was able to get my $1800 penalty completely removed within 3 weeks. I think what made the difference was submitting the exact right documentation in the format they recommended. The IRS actually called me directly to confirm they were canceling the penalty instead of sending another notice!

Since you're dealing with a CP162A and worried about your financial situation, I highly recommend using Claimyr to get through to an IRS agent right away. I was in a similar boat with a penalty notice and spent literally DAYS trying to reach someone at the IRS. With https://claimyr.com they got me connected to an actual IRS agent in about 20 minutes when I'd been trying for weeks. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent was able to put a temporary hold on my account while I gathered evidence, which immediately took the pressure off. They also confirmed exactly what documentation I needed to submit for my abatement request and gave me a direct fax number to send it to. Having that direct conversation made all the difference and saved me so much anxiety.

I was completely wrong about Claimyr! After my skeptical comment, I decided to try it since my situation with the IRS was getting desperate (also had a CP162A notice but for $3400). I was shocked when they texted me just 17 minutes after I signed up saying they had an IRS agent on the line. I connected and spent 45 minutes with an incredibly helpful IRS representative who reviewed my case on the spot. The agent confirmed I qualified for first-time penalty abatement AND placed my account on hold status while my request was processing. No more collection notices or worries about levies! She even gave me her direct ID number to reference if I needed to follow up. This saved me thousands of dollars and months of stress. I wish I'd known about this service months ago instead of sending unanswered letters and wasting hours on hold.

Another option nobody mentioned - if you have proof you tried to file (like that USPS receipt and dated return), you can request abatement due to "reasonable cause" not just first-time abatement. Explain that you took reasonable steps to comply with filing requirements. The IRS actually has a specific reasonable cause category for "issues with mail and delivery" - I successfully used this when USPS lost my return last year. Submit a brief, clear letter explaining exactly what happened, include copies of your dated return and postal receipt, and cite "reasonable cause due to mail delivery issues beyond taxpayer control." This approach can work even if you're not eligible for first-time abatement for some reason.

Random tip - make sure when you contact the IRS you update your address with them! Since you mentioned you moved and they're sending notices to your old address, you need to file Form 8822 immediately to update your address. If you don't, you might miss future notices or deadlines even if you resolve this current issue. The IRS will keep sending mail to your last known address until you officially notify them of the change.

I went through almost the exact same situation with my LLC last year - CP162A notice, lost mail, tight finances, the whole nightmare. Here's what worked for me: 1. **Call immediately** - Don't wait. Use the number on your notice and ask specifically for "first-time penalty abatement" or "FTA". Have your notice and EIN ready. The rep can see your clean compliance history instantly. 2. **Document everything** - That saved return with the February date and your credit card statement showing the USPS charge are actually solid evidence. Print them out and keep copies handy. 3. **Currently Not Collectible status** - Since you mentioned your income vs expenses ($1800 vs $2900), you likely qualify for "Currently Not Collectible" status. This stops all collection activity while you're experiencing financial hardship. Ask about this on your call. 4. **Don't panic about housing** - The IRS won't make you homeless over this. They have hardship protections and you have legitimate grounds for abatement. I got my $1,950 penalty completely removed using first-time abatement. The call took about 45 minutes total, and I received confirmation by mail two weeks later. Your situation sounds even stronger than mine was since you have that postal receipt evidence. You've got this! The IRS deals with lost mail situations constantly - it's not as uncommon as you'd think.

I'm dealing with a very similar situation right now - got a CP162A notice for my dissolved LLC and panicked when I saw the penalty amount. Reading through all these responses has been incredibly helpful, especially learning about first-time penalty abatement. One thing I wanted to add that hasn't been mentioned - if you do end up needing to submit written documentation, make sure to send everything certified mail with return receipt. I learned this the hard way when the IRS claimed they never received my first abatement request (which I sent regular mail). Also, keep detailed notes of every phone conversation including the rep's name, ID number, and what was discussed. I wish I had done this from the beginning because when I had to call back about a different issue, having that information made the follow-up call so much smoother. The financial hardship angle is really important too. Don't be embarrassed to explain your situation honestly - the IRS has these programs specifically for people in tough financial spots. They're not trying to make you homeless over a filing penalty, especially when you have legitimate reasons like lost mail. Hope this helps and that you get it resolved quickly!

I want to echo what others have said about first-time penalty abatement - it's definitely your best first option given your clean compliance history. However, I'd also suggest preparing a backup plan in case you run into any issues with that approach. Since you mentioned the LLC has been inactive since 2020 and is now closed, make sure to emphasize this to the IRS rep when you call. An inactive business with zero income that filed a final return in 2023 is a strong indicator that this was an honest mistake, not tax avoidance. One additional form to consider if the phone call doesn't fully resolve things: Form 656-L (Offer in Compromise for doubt as to liability). This is specifically for cases where you believe you don't actually owe the penalty - which applies to your situation since you did file on time but the return was lost in the mail. Also, when you update your address with Form 8822, consider filing Form 8822-B specifically for business entities. Even though your LLC is closed, this ensures any final correspondence gets to the right place. The key thing is don't let this consume you with worry. You have multiple strong options, solid evidence of timely filing, and legitimate financial hardship protections available. The IRS deals with lost mail situations regularly - you're not the first person this has happened to, and you won't be the last.

Just wanted to add one more resource that might be helpful - if you're feeling overwhelmed by all the different options and approaches mentioned here, the IRS Taxpayer Advocate Service (TAS) can be a great backup resource if your initial attempts don't work out. TAS is an independent organization within the IRS that helps taxpayers resolve problems when normal IRS channels aren't working. You can reach them at 1-877-777-4778 or through their website. They're especially helpful in cases involving financial hardship, which definitely applies to your situation. What I like about TAS is that they assign you a specific advocate who stays with your case from start to finish, so you're not explaining your situation to a different person every time you call. They can also put holds on collection activities while they work on your case. That said, definitely try the first-time penalty abatement approach first - it's much faster and you have a great chance of success given your clean history. But it's good to know TAS is there as a safety net if needed. Also wanted to mention that when you do call tomorrow, if the first rep you speak with doesn't seem helpful or knowledgeable, it's totally okay to politely end the call and try again. Sometimes you just get connected with someone who's more experienced with penalty abatement cases. Don't feel bad about advocating for yourself! Good luck with your call - you've got this! 🙂

Reading through your situation, I can definitely relate to the panic you must be feeling right now. I went through something very similar with my S-Corp a couple years ago - got a CP162A notice for over $3,000 and thought my world was ending. The good news is that you actually have a really strong case here. The combination of your clean compliance history, the evidence you have (that February-dated return and USPS charge), and your genuine financial hardship gives you multiple paths to get this resolved. Here's what I'd recommend doing immediately: **Call the IRS first thing tomorrow morning** using the number on your notice. Ask specifically for "first-time penalty abatement" - don't get sidetracked explaining the whole lost mail situation initially. Just say "I'm requesting first-time penalty abatement for this failure to file penalty." Have your EIN and notice number ready. **If they approve it on the call** (which is very likely given your clean history), you're done! Get a confirmation number and ask when you'll receive written confirmation. **If for some reason FTA doesn't work**, then pivot to reasonable cause due to the lost mail. Your evidence is actually pretty solid - that saved return with the February timestamp plus the USPS charge the next day tells a clear story. **Don't forget to mention your financial hardship** - with income of $1,800 vs expenses of $2,900, you likely qualify for Currently Not Collectible status, which would stop all collection activity regardless. The most important thing is to not let this overwhelm you. The IRS has processes for exactly these situations, and you have legitimate grounds for relief. You're not going to lose your housing over this - they have protections in place for people in financial hardship. Keep us updated on how the call goes! You've got this! 💪