What is a CP 575 Form?

A CP 575 Form is a notice issued by the Internal Revenue Service (IRS) to confirm the unique Employer Identification Number (EIN) they have issued to a new business. The CP-575 Form is from the IRS confirming informing you that an EIN (Employer Identification Number) has been issued.

Author: Brad Nakase, Attorney

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The IRS sends out an EIN confirmation letter for every EIN application it processes. This EIN confirmation letter is called CP 575. A CP-575 form letter serves as a business verification of sorts. These letters authorize the business’ special Employer Identification Number (EIN), so the company can use its new EIN for tax interactions.

The IRS gives every US business an EIN to identify the business for taxation purposes. Confused about why EINs are necessary or what function they serve? Think of companies’ EINs as Social Security Numbers for businesses.

Although CP 575 form may not be on all business owners’ top list of concerns, they serve various purposes. For example, companies need CP 575 form to communicate with government agencies and set up payroll. Businesses also rely on CP 575 form to open bank accounts, begin credit accounts, confirm a Medicare provider, and accomplish other tasks crucial to setting up a successful business.

When submitting a CP 575 form to other parties, sometimes it is enough to give them the company’s EIN. However, some parties value security and require companies to show their Cp 575 letter.

Therefore, business owners must keep their CP 575 form safe and secure, as well as their EINs.

While most business owners need a CP 575 form to do business, company structure determines whether the letter is necessary. Sole Proprietors, for example, do not need a CP 575 form or an EIN to get their businesses running. Why? Sole Proprietors use their Social Security Numbers for all company operations and paying taxes.

However, business owners of Limited Liability Companies (LLCs), partnerships, and other company types must secure a CP 575 form to do business.

In this brief article, we will further explain the significance of CP 575 form so that new business owners understand how to obtain these important documents and use them effectively.

IRS CP 575 Letter Example

What Do CP 575 Form Include?

CP 575 Form all include important information that should stay private to the respective businesses. These valuable documents include the following:

The companies’ new EIN
Valuable information about tax documents

Business owners cannot run their companies without the information that CP 575 Form contain. In addition, when business owners must file tax forms, they rely on the information in CP 575 Form.

An EIN is also vital for companies with workers or employing workers. While sole proprietors do not need EINs, any company with employees needs an EIN, and that is why these companies need to understand the CP 575 Form process.

CP 575 Form does not only include EINs, though that is their main focus. CP 575 Form from the IRS also include:

The company’s official business name
The company’s address for IRS filing purposes
The due date for filing all documents

The SEC has an example of a IRS CP 575 Form. Just as business owners should keep their EIN and CP 575 secure, they should be vigilant about keeping track of the due date for their financial documents and sending every document on time. When a business establishes a pattern of meeting deadlines early on, it is easier to continue to meet all business-related targets and goals.

How Do Business Owners Request a CP 575 Form?

Starting a new company requires owners and their teams to tackle various tasks, and business owners are typically busy. Obtaining a CP 575 Form is one of these crucial tasks new company heads must complete. However, many business owners are unsure how to request a CP 575 Form.

New company owners do not directly apply for or request a CP 575 Form. Instead, they must apply for an EIN for the business. The owner completes this application when they submit the form SS-4 to the IRS on behalf of the business. However, the IRS must approve the business application before the next step occurs.

Is a CP575 Form the same as a 147C letter?

Business owners quickly become familiar with 147C documents if they lose their CP 575 Form. The IRS issues 147C letters to help businesses certify their EINs. Because of this, many refer to 147C forms as EIN Verification Letters.

While it is helpful to know that there is a plan and alternative in case company owners misplace their CP 575 Form, we recommend keeping one’s CP 575 Form safe so that a 147C is never needed.

If the business loses its CP 575 Form, the owner should promptly take action to replace it with a 147C. To do so, the individual can:

Contact the IRS and speak to the service’s support team.
Verify the business with the IRS representative. They will ask for a phone number, address, business name, and more.
Formally ask for a 147C letter.
Await delivery of the 147C letter, and confirm receipt with the IRS

Notably, ordering a 147C replacement form for a CP 575 Form is free for all businesses. While the IRS will not officially “replace” a lost CP 575 Form, business owners can use 147C for the same purposes.

What Is a CP 575 Form Used For?

As noted, CP 575 Form is vital for all businesses. New companies cannot open a credit account, for example, or a business bank account, without a CP 575 Form and the EIN it includes. Likewise, when new business owners seek to apply for loans to support the business or get payroll processing rolling, they rely on their CP 575 Form.

When these transactions occur, the business owner often only needs the EIN to complete them. However, business owners should be prepared because some entities or individuals ask to view the original CP 575 Form to prove its validity. This occurrence is one of the reasons CP 575 Form is an essential document for all businesses except for sole proprietorships.

What is the Difference Between an EIN and a FEIN?

Even the most experienced business owners sometimes confuse EINs and FEINs. So let’s quickly run through the main differences between these numbers to avoid any future confusion.

A FEIN has one purpose: to help identify a company when the business owner files federal tax forms. For example, if a new business owner is finishing their quarterly filings and using form 943, they must include their FEIN. Business owners also use FEINs in forms such as 941 and 940 for annual filings.

EINs are similar, but these numbers function at the state level. For example, California provides new businesses with EINs when they qualify, and then the business uses their EINs on state tax documents.

Some overlap does occur because some states reference companies’ FEINs when giving out state tax IDs. Many states will not allow companies to file taxes without an EIN.

When comparing EINs to FEINs, one can simply relate EINs to the state and FEINs to the country. This distinction will help business owners keep everything straight.

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