Fixed quote after we review your notice
IRS Penalty Notices on Forms 5471, 5472 and 3520
International information return penalties can be large even when no tax is due. If you have a notice, the dates on it matter. We review the notice and your facts, prepare the response and deal with the IRS for you. Work is led by Gurleen Kaur, CPA licensed in British Columbia and Washington State.
Quick answer
Can an IRS penalty on Form 5471, 5472 or 3520 be removed?
It can be, but the IRS decides, and it depends on the facts. The main route is reasonable cause, which the IRS decides case by case on all the facts and circumstances (IRS). You can call the number on your notice, or ask in writing on Form 843. First Time Abate should not be assumed: the IRS administrative relief page lists failure to file, failure to pay and failure to deposit penalties on certain returns, not the penalties for these forms, and it excludes returns filed once or infrequently.
At a glance
- Form 5471
- US$10,000 per corporation per year, and up to US$50,000 more after notice
- Form 5472
- US$25,000 per form, with more after notice. See Form 5472 penalties
- Form 3520
- Foreign gifts: 5% a month, up to 25%. Foreign trusts: generally the greater of US$10,000 or 35%, or 5% for a trust with a US owner
- Main relief
- Reasonable cause, based on your facts
- Source
- IRS, checked November 1, 2026
The penalties
| Form | Penalty | More information | Source |
|---|---|---|---|
| 5471 | US$10,000 for each annual accounting period of each foreign corporation; a further US$10,000 per 30-day period starting 90 days after notice, up to US$50,000 | Late Form 5471 | IRS |
| 5472 | US$25,000 per form; a further US$25,000 for each 30-day period continuing more than 90 days after notice | Form 5472 penalties | IRS |
| 3520 | Foreign gifts: 5% a month up to 25%. Foreign trust transfers and distributions: the greater of US$10,000 or 35% | Form 3520 service | IRS |
| 3520-A | The greater of US$10,000 or 5% of the trust assets treated as owned by a US person | Form 3520-A | IRS |
How relief works
- Reasonable cause. Decided case by case. For information returns, the IRS page looks at acting responsibly before and after the failure, together with significant mitigating factors or events beyond your control (IRS).
- By phone or in writing. The IRS may reduce or remove some penalties over the phone, using the number on your notice. If it cannot, you can ask in writing on Form 843.
- First Time Abate and Automatic Exemption from Penalty. The IRS is moving from one to the other from Summer 2026. Its list of eligible penalties does not name the penalties for these forms (IRS), so we do not rely on them here.
- What is not enough. For foreign trusts, the instructions say a foreign country's penalties for disclosure, or a reluctant trustee, are not reasonable cause (IRS).
We do not promise any outcome; the IRS decides penalties.
What to have ready
- The notice, with its date and the amount
- The form and years involved, and what was filed and when
- Why the filing was missed, in order, and when you found out
- What you did once you knew
- Advice you relied on, if any
Please do not send tax IDs or statements through the website form. If we work together, documents come in through our secure client portal.
If you received a CP215
The IRS says a CP215 means it charged you a civil penalty. The notice explains the due date, the amount and the payment options, and you can call the number on it if you disagree (IRS). The IRS page does not tie this notice to one form, so check which form and year it refers to.
Watch the dates, because further penalties can start 90 days after a notice of failure on these forms.
What we can take on
Notice review
We read the notice and your filing history, and tell you what it covers and what your options look like.
Response to the IRS
A written reasonable-cause request, with Form 2848 so that we can deal with the IRS for that year.
Appeals and Tax Court are quoted separately. Each engagement starts with a written scope and fixed quote, after we review the notice.
Common questions
Does First Time Abate apply to Form 5471 or 5472 penalties?
Do not assume it. The IRS list of penalties eligible for First Time Abate and its replacement names failure to file, failure to pay and failure to deposit on certain returns, and the page excludes returns filed once or infrequently. It does not name these penalties.
How do I ask the IRS to remove the penalty?
You can call the number on your notice and ask for relief for reasonable cause. If that does not resolve it, you can ask in writing on Form 843.
What counts as reasonable cause?
It is decided on all the facts and circumstances, and it depends on the penalty. Why the forms were missed and what you did once you knew are central.
Should I file the missing forms first?
Often the missing information has to be dealt with, because further penalties can follow a notice. The order depends on your facts and the dates on the notice.
Can you deal with the IRS for me?
Yes. As a CPA, Gurleen Kaur can represent you before the IRS with a signed Form 2848.
How much does this cost?
We give a written scope and fixed quote after reviewing the notice and your filing history.
Sources
Every rule and figure on this page links to the IRS, CRA or other official source it comes from. Amounts change; we re-check them before each engagement.
- IRS: Penalty relief due to reasonable cause (reviewed June 21, 2026)
- IRS: Administrative penalty relief
- IRS: About Form 843
- IRS: Understanding your CP215 notice
- IRS: Instructions for Form 5471
- IRS: Instructions for Form 5472
- IRS: Instructions for Form 3520
- IRS: Delinquent international information return submission procedures
Gurleen Kaur, CPA licensed in British Columbia and Washington State. Last updated November 1, 2026. This page is general information, not tax or legal advice for your situation.
Related guides: Late Form 5471, Form 5472 penalties, Form 3520 service, Behind on US filings.
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