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CP261 notice: what it means and what to do
Got an IRS CP261 notice? Here is what it means, your deadline, what to check before you answer, and how to reply. Check your own letter free: it stays on your phone.
Check my CP261 notice freeWhat the IRS says this notice is about
We've accepted your S Corporation election per Form 2553, Election by a Small Business Corporation.
What you need to do
- Keep this S corporation approval letter (CP261 Notice), in your permanent records.
- Timely file Form 1120-S, U.S. Income Tax Return for an S Corporation PDF , reporting income/loss for the S corporation including Schedules K-1 (1120-S), Shareholder's Share of Income, Deductions, Credits, etc. PDF , for all shareholders.
- Timely file all employment tax returns.
Your deadline
Answer by the date printed on your notice. If there is no date, answer as soon as you can, and call the number on the notice if you need more time.
What to check before you answer
Is this letter really from the IRS?
The IRS writes first by mail. A real letter shows a notice or letter number, your name and part of your tax ID number. The IRS does not ask for payment by gift card, crypto or wire transfer. If in doubt, sign in to your IRS online account, where many notices are listed.
You may want to
If your address changes, submit Form 8822-B, Change of Address or Responsible Party - Business PDF , to ensure our records remain correct.
Common questions
Why is the effective date of the election different from what I submitted on Form 2553, Election by a Small Business Corporation?
You did not timely file Form 2553 PDF for the effective date requested.
Can I have the effective date changed?
Relief may be available through Revenue Procedure 2013-30 within late election relief .
How do I request a private letter ruling (PLR)?
The instructions for requesting a PLR are in the first Internal Revenue Bulletin of each calendar year.
Links that you may find useful
- S corporations
- Form 1120-S, U.S. Income Tax Return for an S Corporation
- S corporation compensation and medical insurance issues
- S corporation employees, shareholders and corporate officers
- S corporation stock and debt basis
- Special rules for health insurance costs of 2-percent shareholder-employees ( IRB 2008-2, Notice 2008-1 )
- Publication 542, Corporations PDF
More information on S corporations formed as a limited liability company (LLC)
- Limited liability company
- LLC filing as a corporation or partnership
Related notices
- Letter 2802C
- CP120A notice
- CP136 notice
- CP136B notice
- CP137 notice
- CP137A notice
- CP137B notice
- CP209 notice