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 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.
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.
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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