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CP277 notice: what it means and what to do

Got an IRS CP277 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.

What the IRS says this notice is about

We accepted your Form 8832, Entity Classification Election. Acceptance of this form is based on the accuracy of the information provided.

What you need to do

• File the return that matches your entity classification election.
• Notify us if your address has changed.
• Keep this notice for your records.

Which form should I file?

It depends on how many and what types of owners your eligible entity has.

For an eligible entity with a single owner that elected to be disregarded as a separate entity

U.S. individuals and resident aliens file Form 1040, U.S. Individual Income Tax Return , and report all of the entity’s income and expenses on Schedules C, E or F.

Nonresident aliens file Form 1040-NR, U.S. Nonresident Alien Income Tax Return , and report all of the entity’s income and expenses on Schedules C, E or F.

U.S. direct owners of foreign disregarded entities file Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs) with their returns.

Certain U.S. indirect owners of foreign disregarded entities, including through a controlled foreign corporation, a controlled foreign partnership, or another foreign disregarded entity may need to file Form 8858 with their returns.

For an eligible entity that elected to be classified as an association taxable as a corporation

Domestic corporations generally file Form 1120, U.S. Corporation Income Tax Return .

Foreign corporations that are engaged in a U.S. trade or business or have U.S. source income that is not fully paid by withholding of tax at source generally file Form 1120-F, U.S. Income Tax Return of a Foreign Corporation .

Foreign corporations engaged in trade or business within the United States must file Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (Under Sections 6038A and 6038C of the Internal Revenue Code) .

The U.S. owners (and in certain cases, U.S. officers and directors) of foreign corporations may need to file Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations or Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund with their returns.

Certain U.S. corporations that are at least 25% owned by a foreign person (and foreign owned U.S. disregarded entities that are treated as U.S. corporations for this purpose) may need to file Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (Under Sections 6038A and 6038C of the Internal Revenue Code) with their returns.

For an eligible entity that elected to be classified as a partnership

Domestic partnerships generally must file Form 1065, U.S. Return of Partnership Income .

Foreign partnerships that have gross income that is (or is treated as) effectively connected with the conduct of a trade or business within the United States (ECI) or have gross income (including gains) derived from sources within the United States (U.S.-source income) generally need to file Form 1065 .

The U.S. partners of foreign partnerships may need to file Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships with their returns.

How to withdraw this election

To withdraw your entity classification election, send a written request to the address where you filed Form 8832 . The request must be received by the due date of your tax return for the date you want to withdraw.

Other items you may find useful

• About Publication 3402, Taxation of Limited Liability Companies
• About Publication 515, Withholding of Tax on Nonresident Aliens and Foreign Entities
• About Publication 542, Corporations
• About Publication 541, Partnerships

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.

Related notices

• Letter 2802C
• CP120A notice
• CP136 notice
• CP136B notice
• CP137 notice
• CP137A notice
• CP137B notice
• CP209 notice

Source

1. IRS: Understanding your CP277 notice