CP 213 - Proposed Penalty Notice
The IRS has recently issued CP 213, Proposed Penalty Notice notices, in some cases in error, to plan sponsors who filed a late or incomplete IRS Form 5500. Employee Plans News - Issue Number: 2010-11 November 26, 2010 confirms that you need to respond within 30 days, even if the notice was issued in error:
If you believe you received a CP 213, Proposed Penalty Notice, in error, please respond to the notice within 30 days of receipt. In your response, be certain to submit:
- A copy of the CP 213 Notice,
- Any appropriate supporting documents, and
- Evidence that the return was timely filed or a reasonable cause statement, or
- Evidence that the return was corrected with an amended return.
Please send your responses to the following address:
Ogden Accounts Management Center
EP Accounts Unit, Mail Stop 6270
Ogden, UT 84201
We recommend you send your responses by certified mail or a traceable private delivery service.
The IRS has defined the purpose of the notice and answered other frequently asked questions on CP 213 Notices:
The CP 213 Notice is not a bill. The notice contains a "proposed" penalty amount due to a late filed and/or incomplete Form 5500, 5500-SF or 5500EZ.
The CP 213 Notice is issued to plan sponsors who filed:
- a late Form 5500 series return.
- an incomplete Form 5500 series return that may also have been filed late. The long version of the notice indicates what return information is missing by means of a series of check boxes.
In many instances, there are two letters sent out by the Department of Labor (EFAST Contractor) asking for the missing information or addressing the late-filed return. If there is no response to either of the letters, DOL processes the return as is, and provides the information to the IRS. In some other instances, this CP 213 Notice is the first correspondence between the filer and the IRS.
The proposed penalty listed on the notice will be assessed unless the IRS's Accounts Management Center in Ogden receives written correspondence (accounts cannot be resolved over the phone) within 30 days of the date the IRS issued the notice which:
- Establishes reasonable cause,
- Provides the required information from the filer, or
- Demonstrates that an error was made on the part of the IRS or the DOL.
If the filer does not respond to the CP 213 Notice, the next correspondence will inform the filer of the assessment.
The proposed penalty notice (CP 213I) generates based on the original filing of the 5500 series return. Therefore, even if the filer filed an amended return to correct/complete the original submission, the filer may receive a CP 213I if the original filing was incomplete. If you filed an amended return to correct/complete the original submission, respond to the notice indicating you filed an amended return.
The Internal Revenue Manual shares a look at how the IRS processes the CP 213 Notice.