Tax
Form 5472 late filing: penalty recovery and IRS abatement procedures
Late Form 5472 filings carry $25,000 penalty per occurrence. Penalty abatement is possible in some situations.
Penalty structure
Form 5472 late filing penalty: $25,000 per occurrence (each year missed counts separately). Failure to maintain records can add additional penalties.
IRS sends penalty notices typically 6-12 months after filing deadline. Notice arrives by mail to registered agent's address.
First-time abatement
IRS First-Time Abate (FTA) program: available for filers with clean compliance history (no penalties in prior 3 years). Eliminates one penalty per year. Apply by phone (800-829-4933) or written request.
FTA does not require explanation of why you filed late; just confirms clean history.
Reasonable cause abatement
For repeated penalties or when FTA does not apply: reasonable cause abatement. Requires documented justification (medical emergency, natural disaster, professional misconduct by prior CPA, etc.).
Submit written request with documentation. Engage CPA experienced with abatement procedures; success rate higher with professional preparation.
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