What Is a CP-575 Letter and Do I Need One?
What is a CP-575 Letter?
A CP-575 is a notice received via mail from the Internal Revenue Service (IRS) that confirms an Employer Identification Number (EIN) issued to a new business. This letter includes:
- The EIN (a nine-digit tax ID number used for filing federal payroll taxes)
- The business name
- The official filing address for your business
- A list of federal tax forms that your business is required to file (i.e. Form941, Form 940, and Form 1120)
- The due dates for those forms
Purpose of a CP-575 Letter
The letter serves as proof of your EIN and all other information listed above. This letter is required to open business bank accounts/credit cards, set up payroll with a payroll provider, correspond with particular government agencies, and get a Medicare provider.
Do I need a CP-575 Letter?
If you run a business with employees, or if you plan to hire employees in the near future, then you will need a CP-575. The IRS offers a brief test that you can take if you are unsure whether or not to apply. These questions include:
Do you have employees?
Do you operate your business as a corporation or a partnership?
Do you file any of these tax returns: Employment, Excise, or Alcohol, Tobacco and Firearms?
Do you withhold taxes on income, other than wages, paid to a non-resident alien?
Do you have a Keogh plan?
CP-575s aren’t necessary for sole proprietors who opt to use their social security number for business operations.
How to Receive Your CP-575
If you answered “yes” to any of the questions above, then you will need to apply for an EIN using the Application for Employer Identification Number: Form SS-4. This form can be filled out online, or it can be printed out and either mailed or faxed to the IRS. Once approved, the CP-575 letter will be sent to the address listed on the form within four-six weeks.
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