IRS Notice CP207: missing or incorrect deposit schedule (ROFTL)

Per the IRS, a ROFTL is rejected for incorrect, missing, illegible or negative entries, or when total liability doesn't equal total tax on the return. To be accepted, your reply should:

• Report each liability — monthly totals if you're a monthly depositor, each pay date's liability if you're semiweekly (Schedule B).
• Report only liabilities, not deposits.
• Show no negative amounts; apply decreases to the corresponding liability without going below zero, carrying any remaining decrease forward.
• Total exactly to the return's tax liability.

The IRS figures the penalty by averaging total liability across the tax period and applying deposits in the order received. It then charges the failure-to-deposit penalty tiers: 2% for 1–5 days late, 5% for 6–15 days, 10% for 16 or more days or when required EFTPS deposits weren't used, and 15% if not paid within 10 days of the first notice. If your response is late, the IRS assesses the penalty and then adjusts after reviewing your reply.

The IRS can't consider removing deposit penalties without a correct ROFTL. If a deposit was late for reasonable cause, include a statement signed under penalty of perjury with your reply. First Time Abate may also apply — see payroll penalty abatement.

Confirm a CP207 is genuine before acting on it. Sign in to your IRS business tax account or request a business account transcript and check that the period and amount match. If you call, use the number printed on the notice only after confirming it matches the one IRS.gov lists for that notice. The IRS doesn't demand payment by gift card, cryptocurrency or wire transfer to an individual.

Most CP207s come from using the wrong deposit schedule or reporting deposits instead of liabilities. Confirm your schedule (see CP136 and the deposit schedule guide) and have your payroll provider generate Schedule B from pay-date liabilities. Use the business assessment if penalties have left a balance you can't pay.