What's the purpose of an IRS CP-575 form letter?

CP-575 form letter: What is it and do I need one?

A CP-575 form letter serves as a business verification of sorts. For starters, the letter includes your nine-digit, newly assigned EIN number (some even think of it as a company’s social security number). An EIN is important for businesses that have employees or anticipate having employees. It is not necessary, however, for sole proprietors, who can simply use their Social Security number for business identification purposes.

Additional information you’ll see on a CP-575 includes your official business name, official filing address, a list of the tax forms your business is required to file, and (even more importantly) the due date(s) for filing those forms – which, of course, you won’t want to miss.

How do I know if I need to apply for an EIN?

To help you determine whether you need to apply for an EIN, the IRS has a brief test. But don’t worry — it’s fairly straightforward. The 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?

Answer “yes” to any of the questions in Uncle Sam’s quick quiz, and you’ll need to apply for an EIN.

When do I receive my CP-575 form letter?

OK, once you’ve established that you need to apply for an EIN, the next thing to do is complete Form SS-4. While most people take care of this form online, you can also complete a hardcopy of the form and mail or fax it to the IRS.

When your application is approved, you’ll receive the EIN confirmation letter CP-575. The timing of when you receive the letter depends on how you handle submitting form SS-4.

If you complete the application online, the IRS automatically sends you the EIN Confirmation Letter (CP-575) digitally, which you can download at your convenience.

If, on the other hand, you apply by mail or fax, you’ll receive the CP-575 confirmation letter by mail, which can take a while — it usually arrives within four to six weeks of your EIN application.

It’s important to keep in mind that you’ll only receive your CP-575 form letter one time: when your EIN number is initially assigned. You won’t receive a new one annually, so it’s important to keep the confirmation letter in a safe place.

What does an IRS CP-575 form letter look like?

As already mentioned, your IRS CP-575 form letter will include information such as your EIN number, business name, and address. Here’s what it looks like:

What happens if I lose my original CP-575 letter?

Should you lose track of your letter, there’s no reason to panic. Even though the IRS will not replace the original CP-575 letter you received, if you need a copy, you can request the EIN Verification Letter (147-C).

To obtain a 147-C, you’ll need to contact the IRS at 1-800-829-4933 between 7:00 AM to 7:00 PM, Monday through Friday, in your local time zone. There are a couple of exceptions: if you’re located in Alaska & Hawaii, follow Pacific time when calling. It’s important to point out that you can’t request the letter online or via email. The IRS will only send a 147-C letter via mail or fax. You can find more information about this process on the IRS website.

Once received, you can use 147-C as a valid replacement for CP-575. And in the meantime, while you’re waiting for the 147-C, the IRS suggests taking a few other steps if you need to track down your EIN for use completing other documents, including:

• Finding the computer-generated notice of your EIN that was issued by the IRS when you originally applied for the number. (Check your email history!)
• If you used your EIN to open a bank account, or to apply for any type of state or local license, you might also consider contacting the bank or agency to recover your EIN information.

Finally, you can check previous tax returns for your business (if you have filed a return).  Your federal tax filing should include your FEIN.

Safeguard your CP-575 

We’re by no means trying to cause anxiety, but with identity theft on the rise, it can be a good idea to safeguard your CP-575 letter since it contains important information regarding your business. Even though the risk of someone getting their hands on your CP-575 is probably low, it’s not a bad idea to keep it under lock and key. And while we’re on the subject of organizing files, you may also find our article on how long to keep payroll records useful as you begin to hire employees.

Congratulations on getting your business off the ground. If you’re looking to dive a bit deeper, use our guides on processing payroll for more insights and information on paying your team for the first time.

This article is for informational purposes only and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors for formal consultation.