What to Do About CP259 Notice From the IRS
Summary:
The IRS sends out CP259 Notices to business owners or entities that are required to file a tax return but have not done so. This notice is essentially a reminder or a warning that the IRS has no record of receiving your required return for the tax periods mentioned in the notice. The notice provides steps on how to file the return, what to do if you think you’re not required to file, and the consequences of failing to respond.
Receiving a letter from the IRS can often feel overwhelming, especially when it concerns a missing tax return. One such letter is the CP259 Notice, which informs business owners or organizations that the IRS has no record of their required return. The CP259 doesn’t necessarily mean you owe taxes, but it does indicate that the IRS believes you’re obligated to file. If you’ve received a CP259 Notice, it’s important to act quickly to either file your missing return or clarify why you may not be required to file. This guide will help you understand the notice, what actions to take, and the potential consequences of ignoring it.
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What is CP259 notice?
A CP259 Notice is sent by the IRS to remind businesses or organizations that they are required to file a tax return for the periods indicated on the notice but haven’t done so. This notice is not a bill, but it is a prompt from the IRS to take action. The CP259 could be issued to sole proprietors, partnerships, corporations, or other types of businesses.
The key message in the CP259 is that the IRS has no record of receiving the tax return that should have been filed. The IRS uses the information it has on file to determine whether a taxpayer is required to file. If you received this notice in error, you can respond by explaining why you don’t need to file, or if you haven’t filed the return, the IRS will expect you to do so promptly.
Pro Tip
Set up IRS account alerts online to get real-time notifications on any changes to your tax return or account. This helps you stay updated on adjustments and due dates.
What should you do when you receive CP259 notice?
If you receive a CP259 Notice, don’t panic, but don’t ignore it either. Here’s what you should do:
Review the notice carefully
The first step is to read the notice in full. The CP259 will state the tax periods that the IRS believes require a return, and it will also outline what your next steps should be. Make sure the information in the notice matches your records.
Determine if you need to file a return
Verify whether you are indeed required to file the business return mentioned. Sometimes, businesses that have no income, no employees, or have been dissolved believe they do not need to file returns. In some cases, this is correct, but you’ll need to confirm with the IRS or your tax professional. If you’re not required to file, use the Response form included with the CP259 Notice to explain your reasoning.
File your return if required
If the IRS is correct, and you were required to file the return in question, it’s important to do so immediately. You can either file the return electronically using an e-file provider or send a paper return. Be sure to include all required schedules with the return. Filing promptly can help you avoid additional penalties or issues with your account.
Respond if you’ve already filed
If you have already filed the return within the past four weeks under the same name and EIN (Employer Identification Number) listed on the notice, you may disregard the CP259. However, it’s a good idea to double-check your records and confirm the IRS has received the return to prevent future complications.
Use the response form if you’re not required to file
If you believe you are not required to file, fill out the Response form that is enclosed with the CP259 Notice. You can mail this form to the IRS or fax it to the number provided in the notice (855-800-5944). When faxing, make sure to protect your information by using a secure service.
Pro Tip
Always use certified mail when sending paper returns or documents to the IRS. This way, you have proof of submission and can track your correspondence.
Why did you receive a CP259 notice?
The IRS typically sends out CP259 Notices when their records show that a business or entity has failed to file a required tax return. Several scenarios could lead to receiving this notice:
- Failure to file a business tax return for a particular period.
- Closing or dissolving a business without notifying the IRS.
- An error in your IRS or tax return records showing that you haven’t filed, even if you have.
- Miscommunication between your business and the IRS.
In some cases, the IRS may send multiple CP259 Notices, especially if several tax periods are affected. It’s important to resolve the issue quickly to prevent further escalation.
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What happens if you don’t respond?
Ignoring the CP259 Notice can lead to significant complications. Here’s what could happen if you fail to respond:
1. Failure to file penalties
The IRS imposes penalties for failing to file required tax returns. These penalties increase the longer the return goes unfiled, and interest may also be applied. Even if you owe no taxes, failing to file could still result in penalties.
2. IRS enforcement actions
If you continue to ignore the CP259 Notice, the IRS may take enforcement actions, including levying fines, placing liens, or even garnishing wages. While these are more extreme measures, it’s important to be proactive and file any required returns or respond with an explanation if you believe you are not required to file.
3. Additional notices
The IRS may send additional notices if no action is taken after the CP259. These notices can escalate to more serious warnings and eventually lead to collections activities. Responding early can help you avoid this process.
Pro Tip
Consider filing your business tax returns electronically. E-filing reduces errors, speeds up processing, and provides immediate confirmation of receipt.
How to avoid receiving CP259 notices in the future
1. File returns on time
The best way to avoid CP259 Notices in the future is to ensure you are filing your business returns on time, every year. Stay organized and keep track of all filing deadlines to avoid missed returns.
2. Close inactive businesses properly
If you have dissolved or closed a business, make sure you notify the IRS by filing the appropriate final tax returns. This will help prevent the IRS from sending notices for future tax periods.
3. Use electronic filing
Filing your returns electronically can help prevent errors, reduce delays, and provide confirmation that the IRS has received your return. In many cases, electronic filing is free and offers additional benefits like automatic calculations and access to deductions.
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Frequently asked questions
What should I do if I think the CP259 notice was sent in error?
If you believe the CP259 Notice was sent in error, review your business records to confirm that all required tax returns were filed for the tax periods listed. If you’re certain that you’ve already filed the returns, double-check that they were filed using the correct EIN and business name. You should also contact the IRS or fill out the response form included with the notice, explaining why you believe you’re not required to file.
Can I resolve the CP259 notice issue online?
In most cases, you will need to file your return or respond via mail or fax as directed in the notice. However, if your business uses an e-file provider, you may be able to file your missing return electronically. Some information, such as viewing tax records or getting updates, may also be accessible online through the IRS’s secure platform. Be sure to check the specific instructions provided in your notice.
How do I respond if my business is closed?
If your business is no longer in operation, you’ll need to file the final tax return and mark it as “final” to officially close the account with the IRS. The CP259 Notice will still require a response if you haven’t submitted this final return. If you’ve already closed the business and filed all necessary returns, you can use the response form to notify the IRS that no further filings are required.
Will I face penalties if I can’t file by the deadline stated in the notice?
Yes, failing to file your return or respond to the CP259 Notice by the deadline may result in penalties. The IRS imposes penalties for both late filing and failure to file. If you’re unable to meet the deadline, it’s a good idea to file for an extension or contact the IRS directly to explain your situation and avoid additional penalties.
What should I do if I disagree with the IRS about the requirement to file?
If you believe you are not required to file a tax return for the periods specified in the notice, fill out the response form included with the CP259 Notice. In this form, provide a detailed explanation as to why you think you don’t need to file. Supporting documentation, such as records showing that your business didn’t generate income or had no employees, can help clarify your case. Be sure to respond by the deadline to avoid further complications.
Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.
| CP01 | The IRS verified your claim of identity theft and will monitor your account. |
| CP01H | The IRS received a tax return with a social security number that belongs to a dead person. |
| CP02H | Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma. |
| CP03C | You received the First-Time Homebuyer Credit for a house you purchased. |
| CP04 | You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice. |
| CP08 | You may be entitled to additional money due to the Additional Child Tax Credit. |
| CP10 | Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed. |
| CP10A | Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed. |
| CP11 | You owe money because the IRS amended your return due to a miscalculation. |
| CP11A | Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed. |
| CP11M | Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed. |
| CP12 | You are due a bigger refund because the IRS corrected one or more mistakes on your tax return. |
| CP12A | The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return. |
| CP12E or CP12F | The IRS corrected a miscalculation on your return. |
| CP12M | The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return. |
| CP12R | The IRS made changes to the computation of the Rebate Recovery Credit on your return. |
| CP13 | The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero. |
| CP13A | The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero. |
| CP13M | The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero. |
| CP13R | The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero. |
| CP14 | You owe money on unpaid taxes. |
| CP16 | The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts. |
| CP21A | You owe money due to the changes you requested that the IRS make on your tax returns. |
| CP21B | You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks. |
| CP21C | The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero. |
| CP21E | As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes. |
| CP21I | The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes. |
| CP22A | The IRS made the changes you requested, and you owe money as a result. |
| CP22E | As a result of your recent audit, the IRS changed your tax return, and you now owe money. |
| CP22I | The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes. |
| CP23 | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes. |
| CP24 | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes. |
| CP24E | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes. |
| CP25 | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero. |
| CP31 | You need to update your address because your refund check was returned to the IRS. |
| CP45 | The IRS was unable to apply your overpayment to your estimated tax as you requested. |
| CP49 | The IRS used all or part of your refund to pay a tax debt. |
| CP53 | Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit. |
| CP57 | The bank declined your payment, so the IRS was unable to draft funds from your bank account. |
| CP71 | A reminder of the amount you owe in tax, penalty, and interest. |
| CP71A | A reminder of the amount you owe in tax, penalty, and interest. |
| CP71C | A reminder of the amount you owe in tax, penalty, and interest. |
| CP71D | A reminder of the amount you owe in tax, penalty, and interest. |
| CP88 | The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax. |
| CP90 | The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing. |
| CP91 | The IRS will levy up to 15% of your social security benefits for unpaid taxes. |
| CP120 | The IRS needs documentation of your tax-exempt status. |
| CP120A | Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years. |
| CP130 | You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed. |
| CP152 | The IRS received your return. |
| CP153 | The IRS will send your refund by mail because your direct deposit did not go through. |
| CP161 | You have an unpaid balance due to the IRS. |
| CP166 | Your monthly payment to the IRS did not go through due to insufficient funds in your bank account. |
| CP178 | You may no longer owe excise tax because your tax return filing requirements changed. |
| CP231 | You need to update your address because your refund was returned to the IRS. |
| CP259 | You did not file the business tax return identified in the notice. |
| CP259A | You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard). |
| CP259B | The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation. |
| CP259C | The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation. |
| CP259D | You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return. |
| CP259E | You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax. |
| CP259F | The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return. |
| CP259G | The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations. |
| CP259H | As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax. |
| CP276A | You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time. |
| CP276B | The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time. |
| CP297 | The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing. |
| CP297A | The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing. |
| CP298 | The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes. |
| CP501 | You have a balance due on one of your tax accounts. |
| CP503 | You have an unpaid balance on one of your accounts, and the IRS has not heard from you. |
| CP504 | You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe. |
| CP504B | You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe. |
| CP521 | A reminder that you have an installment agreement payment due. |
| CP523 | You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets. |
| CP601 | Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas. |
| CP603 | No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas. |
| CP604 | Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda. |
| CP604B | Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda. |
| CP621 | Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente. |
| CP623 | Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo. |
| CP711 | Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones. |
| CP721 | Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos. |
| CP722 | Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos. |
| CP771 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP772 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP773 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP774 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP959 | Usted no radicó su planilla de contribución de negocios identificada en este aviso. |
| CP2000 | The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due. |
| CP3219A | The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax. |
| CP3219N | The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days. |
| Letter 0012C | The IRS needs additional information to process your tax return. |
| Letter 0484C | The IRS wants a completed |
| Letter 0525 | Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed. |
| Letter 531 | IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return. |
| Letter 0668D(LP 68) | The IRS released their levy. |
| Letter 0549C | Your tax bill was paid. |
| Letter 0681C | The IRS accepted your payment proposal. However, this is not a formal Installment Agreement. |
| Letter 0757C | You did not adhere to the terms of your Installment Agreement. |
| Letter LT 11 | The IRS plans to seize your property or rights to property. |
| Letter 1058 | The IRS has not received your payment. It plans to seize your property or rights to property. |
| Letter 1615 (LT 18) | You must respond to the IRS within 10 days of this notice regarding past due tax returns. |
| Letter 1737 (LT 27) | Complete and sign Form 433F, Collection Information Statement. |
| Letter 1961C | Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify. |
| Letter 1962C | Your application for a |
| Letter 2050 (LT 16) | The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed. |
| Letter 2257C | The IRS is providing the payoff amount that you requested. |
| Letter 226-J | An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP). |
| Letter 2271C | A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information. |
| Letter 2272C | An IRS letter explaining why your request to pay the balance due in installments was declined. |
| Letter 2273C | A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included. |
| Letter 2318C | A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged. |
| Letter 2357C | The IRS is admitting that it did not send you the balance due notices that it should have. |
| Letter 2603C | The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property. |
| Letter 2604C | The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction. |
| Letter 2761C | The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer. |
| Letter 2789C | An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid. |
| Letter 2840C | Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify). |
| Letter 3030C | Provides an explanation of the tax, penalty, and interest still due on your account. |
| Letter 3127C | A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities. |
| Letter 3174 | A reminder of taxes due after the IRS has sent a Notice of Intent to Levy. |
| Letter 3217C | The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify). |
| Letter 3228 (LT 39) | A request to pay the balance due within 10 days using the envelope provided. |
| Letter 3500 | The IRS has received your documents, and it needs additional time to review them. |
| Letter 3572 | Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment. |
| Letter 4883C | The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately. |
| Letter 4903 (LT 26) | You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response. |
| Letter LP 47 | The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address. |
| Letter LP 59 | The IRS has not received a response to the notice of levy it previously sent. |
| Audit Letter 2205 | The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit). |
| Letter 915 | You recently underwent an audit, and the IRS informs you that you now owe taxes. |
Key takeaways
- The CP259 Notice informs you that the IRS has no record of your required tax return for the specified period.
- Act promptly by filing your return or responding with an explanation if you’re not required to file.
- Failure to file can result in penalties and further enforcement actions by the IRS.
- Filing electronically and keeping organized records can help you avoid future CP259 Notices.
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