Receiving a tax notice or letter is never a pleasant experience. It can be confusing and frustrating if you don't understand why you received the notice in the first place. That's why we wrote The Ultimate Guide to Tax Notices and created a tax notice library filled with the most common tax notices and letters you might receive. We believe the process of staying compliant with your taxes should be as effortless as possible.
General Information
- What is the notice number? CP261
- What government agency sends this notice? The Internal Revenue Service (IRS)
- What is this notice about? The IRS has accepted your S Corporation election per Form 2553, Election by a Small Business Corporation.
- What should you do if you receive this notice?
- Keep this S corporation approval letter in your permanent records. If you use a tax return preparer, give them a copy of it too.
- Timely file Form 1120-S, U.S. Income Tax Return for an S Corporation, reporting income/loss for the S corporation including Schedules K-1 (1120-S), Shareholder's Share of Income, Deductions, Credits, etc., for all shareholders.
- Timely file all employment tax returns.
FAQs & Additional Information
- 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 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.
What does it look like?
Resources
Looking for more information about this notice? Here are some helpful resources:
- About the notice - https://www.irs.gov/individuals/understanding-your-cp261-notice
- Example copy of the notice - https://www.irs.gov/pub/notices/cp261_english.pdf
How can we help you today?
Are you looking for more information about your tax notice or other challenges? DiMercurio Advisors has a dedicated team supporting tax notices, audits and more. We are passionate about ensuring you are well-informed and in control of your tax situation.
