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In the IRS’s own words · not reviewed by VALID
CP261 notice explained, in the IRS’s own words
We've accepted your S Corporation election per Form 2553, Election by a Small Business Corporation.
Read the full CP261 page on irs.gov ↗
What this notice is about
We've accepted your S Corporation election per Form 2553, Election by a Small Business Corporation.
What you need to do
- Keep this S corporation approval letter (CP261 Notice), in your permanent records.
- Timely file Form 1120-S, U.S. Income Tax Return for an S Corporation PDF, reporting income/loss for the S corporation including Schedules K-1 (1120-S), Shareholder's Share of Income, Deductions, Credits, etc. PDF, for all shareholders.
- Timely file all employment tax returns.
You may want to
If your address changes, submit Form 8822-B, Change of Address or Responsible Party – Business PDF, to ensure our records remain correct.
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 PDF 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.
How do I request a private letter ruling (PLR)?
The instructions for requesting a PLR are in the first Internal Revenue Bulletin of each calendar year.
Links that you may find useful
- S corporations
- Form 1120-S, U.S. Income Tax Return for an S Corporation
- S corporation compensation and medical insurance issues
- S corporation employees, shareholders and corporate officers
- S corporation stock and debt basis
- Special rules for health insurance costs of 2-percent shareholder-employees ( IRB 2008-2, Notice 2008-1)
- Publication 542, Corporations PDF
More information on S corporations formed as a limited liability company (LLC)
- Limited liability company
- LLC filing as a corporation or partnership
What to do next
- Write down the date on the letter today.
- Look the number up on irs.gov yourself. Don’t trust a link or phone number from anyone else.
- If it says you owe money or proposes changes to your return, take it to a licensed CPA, EA or tax attorney before that date.
Not advice. Not a filing. Verify with a licensed professional. Rules change by year and facts.