CP 575 Letter
The CP 575 Letter is a legal document sent by the Internal Revenue Service (IRS) to a business entity once its Employer Identification Number (EIN) has been granted. This important document confirms the EIN and includes its associated tax responsibilities. If lost, it's un-reproducible but businesses can acquire a verification of their EIN from the IRS.
Last updated: August 20, 2023 • 3 min read
What Is CP 575 Letter?
A CP 575 Letter is a document sent by the Internal Revenue Service (IRS) to a taxpayer to confirm the assignment of an Employer Identification Number (EIN). This letter serves as the legal proof of the EIN for the entity.
What Are Some Examples of EIN Confirmation Letter?
The following are some examples of EIN confirmation letters:
CP 575 Notice: This is the original confirmation letter sent by the IRS to acknowledge when an EIN has been assigned to a new company.
147C Letter: This is the official IRS confirmation of EIN that's sent upon request of the taxpayer if the original confirmation (CP 575) is lost or never received.
SS-4 Confirmation Letter: This is the letter a business receives from the IRS after successfully applying for an EIN using the SS-4 form.
Please note that the exact letter sent might vary based on the entity type and specific situation.
What's the Difference Between CP 575 Letter and IRS Form SS-4?
The IRS Form SS-4 is the application form that a business entity submits to the Internal Revenue Service (IRS) to apply for an Employer Identification Number (EIN).
On the other hand, a CP 575 is the confirmation letter sent by the IRS to the business entity, acknowledging that an EIN has been assigned to it. This letter serves as the legal proof of the EIN for the entity. So, the key difference is, the Form SS-4 is what you submit to get an EIN, while the CP 575 is what you receive as proof of having obtained one.
What Value Does a CP 575 Letter Provide to a Business Entity?
A CP 575 Letter provides significant value to a business entity in several ways:
Proof of Registration: It serves as legal proof that the business has successfully registered for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS).
Tax Reporting: The EIN mentioned in the letter is necessary for businesses to report their taxes, pay employees, open bank accounts, apply for business licenses, and fulfill other business requirements.
Verification: It can be used by other organizations, financial institutions, and potential partners to verify the business' tax identity.
Record Keeping: Keeping this letter safe is crucial for a business entity as it might be required for any future correspondence or verification with the IRS.
Which Employers Are Likely to Be Affected by CP 575 Letter?
The employers that are likely to be affected by a CP 575 Letter include:
Newly incorporated businesses: When a business is first incorporated, it applies for an EIN with the IRS. The IRS then issues a CP 575 Letter to confirm and acknowledge the assignment of an EIN to the business.
Businesses changing structure: If a business changes from a sole proprietorship to a corporation, or undergoes any major structural change that requires a new EIN, the business will receive a CP 575 Letter.
Non-profit organizations: Non-profit organizations also need an EIN for managing their operations and thus, they will receive a CP 575 Letter when they get their EIN.
Trusts and Estates: Trusts and estates that have income requiring tax filing will need an EIN and consequently, a CP 575 letter.
Employers hiring employees for the first time: If a business hires employees for the first time, it needs an EIN for tax purposes, leading to the issuance of a CP 575 Letter.
Employers who have lost their original EIN confirmation: If an employer loses their original EIN confirmation, they can request a verification letter (147C) similar to the CP 575 Letter from the IRS.