What Happens After Your Tax Professional Responds to Your CP15 Notice: The IRS Review, Appeal Rights and Next Steps

Form 3520 and Form 3520-A are forms that a person or entity may be required to submit under IRS requirements. If a required form is not submitted on time and there is no extension, a CP15 notice will be issued if the IRS catches the problem. The CP15 notice is what triggers the penalty assessment. Not every late filing results in a CP15 notice or a penalty.

A CP15 notice means the IRS has already charged a Form 3520 or Form 3520-A penalty — typically because a return was filed late, was incomplete or inaccurate, or a notice letter went unanswered. Receiving one can be unsettling. Depending on how the case reached this point, a reasonable-cause response may already be on file, or it may still be possible to submit one. Either way, the IRS reviews the explanation and supporting records: it may ask for more information, uphold the penalty, or abate it in full or in part. Understanding the review process, and the next steps if the IRS disagrees, helps you protect your rights and keep the response organized.

How the IRS reviews the reasonable-cause response to a CP15 notice

The next step depends on how the case reached the CP15 stage. Where the case began with an IRS notice letter, the IRS considers the reasonable-cause statement before deciding whether to assess the penalty; the CP15 arrives after that review, or after no response was received, or when a late-filed return is processed by the campus. Once the penalty is assessed, your tax professional can still ask the IRS to reconsider it through a written post-assessment abatement request.

Under IRC section 6677 and the Form 3520 instructions, relief may be available when the failure was due to reasonable cause and not willful neglect. The IRS’s IRM 20.1.9 guidance addresses international information return penalties, including Forms 3520 and 3520-A. The facts and documents you provide matter: a general statement that you did not know about a filing requirement may not explain why you could not comply despite exercising ordinary care.

The IRS may review the notice, filing history, prior correspondence, and the explanation of what prevented timely filing. It may also request additional information. Your tax professional should respond to any request using the instructions and address provided, and keep a complete copy of everything sent on your behalf.

What to do after you receive a CP15 notice for Form 3520 or Form 3520-A

Take these steps so your tax professional can make the request clear and supportable:

1. Share the notice. Give your tax professional the CP15 notice and confirm the tax year, form, penalty basis, amount, and any stated response instructions, comparing these details with your filing records and earlier IRS correspondence.
2. Rebuild the timeline together. Describe when the filing was due, what prevented timely compliance, when the obstacle ended, and what you did to correct the problem, so the statement can present these facts in order.
3. Hand over the supporting records. Provide relevant records, such as correspondence, trust documents, evidence of efforts to obtain information, or documentation of an event that affected your ability to file.
4. Confirm corrective action. Tell your tax professional when you filed or corrected the return and whether any other required years remain outstanding. The IRS may consider the broader compliance record when reviewing the request.

The IRS delinquent international information return procedures describe how to submit certain late information returns with a reasonable-cause statement. For background on the notice itself, see CP15 Notice From the IRS. The notice itself explains the charge, the payment options, and how to file a claim for refund, as shown in IRM Exhibit 20.1.9-6.

What happens if the IRS upholds the Form 3520 penalty

If the IRS denies the written abatement request, read the denial letter carefully with your tax professional. It should explain the decision and whether a request for review by the IRS Independent Office of Appeals is available. Follow the specific instructions and deadline in that letter. Appeals is a separate review stage where the disagreement and supporting facts can be presented on your behalf.

The procedure differs from many income-tax disputes. Penalties under IRC section 6677 are generally assessable without deficiency procedures, as described in IRM 20.1.9. That means you should not assume the same pre-assessment review route applies. For additional context, see Form 3520 Penalties in 2026.

First-Time Abate is not generally available for Form 3520 or Form 3520-A penalties. A clean compliance history may be relevant background, but it does not replace a fact-specific reasonable-cause explanation. The strongest request, prepared with your tax professional, addresses the particular failure, provides supporting evidence, and explains the steps taken to correct it.

When a refund claim may be another option

Depending on your circumstances, payment followed by a refund claim may be considered as a separate route to challenge an assessed penalty. This option has its own requirements and time limits, so review the applicable rules with your tax professional before deciding whether to pursue it. The IRS penalty relief page provides general information; your CP15 notice and subsequent IRS letters should guide the next action for your case.

Keep copies of your notice, the response prepared on your behalf, supporting exhibits, proof of delivery, and all IRS replies. If the IRS asks for more information, pass each question to your tax professional and retain a copy of the complete submission. A careful record makes it easier to understand the status of your request and evaluate what options remain.

Get help understanding your CP15 response and next steps

A Form 3520 or Form 3520-A penalty review can involve complex reporting facts and significant financial consequences. If you are unsure how to respond to an IRS request or denial, a qualified tax professional can help assess your records and procedural options and manage the correspondence for you from response through review.

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