Federal tax deposit penalty

CP276 · CP220 · Balance-due notice showing a failure-to-deposit penalty

What it is

A penalty for employment tax deposits made late, in the wrong amount, or by the wrong method; the rate rises with the number of days late. A CP276 is the courtesy notice that deposits were not made correctly but no penalty was charged this time; when the penalty is charged it arrives on an account-adjustment notice such as a CP220 or on the balance-due notice. First-time abatement applies, and the regulation contains its own reasonable-cause standard and a first-year safe harbor for new depositors.

The clock it starts

Pay or respond by the date on the notice, generally 21 days. An abatement request can be made while the account is open.

What a response has to establish

The deposit history with the dates, the relief that applies (first-time abatement, reasonable cause, the new-depositor rule, or a deposit misapplied by the IRS), and the request.

Authority

• IRC §6656
• Treas. Reg. §301.6656-1
• IRM 20.1.4
• IRS Publication 15

For tax professionals. The date printed on the notice controls. CitedTax is a research and drafting tool; the reviewing professional validates every item before reliance.