IRS Notice CP259A: Why You Received It and How to Respond
Summary:
IRS Notice CP259A is issued to taxpayers who are required to file a business tax return but failed to do so by the deadline. The notice serves as a reminder and informs taxpayers that if they don’t act quickly, they may face penalties, interest, or even the IRS filing a substitute return on their behalf. This article will explain what CP259A is, how to respond, and ways to avoid these issues in the future.
Receiving a notice from the IRS can be nerve-wracking, especially when it concerns an unfiled business tax return. IRS Notice CP259A is a notification that the IRS has not received your required business tax return for a specific tax period. It urges you to submit your return as soon as possible to avoid penalties and interest charges. Failing to address this notice may lead to more severe consequences, such as the IRS filing a Substitute for Return (SFR) on your behalf. In this article, we’ll explain in detail what IRS Notice CP259A means, the next steps you should take, and how to ensure this doesn’t happen again.
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What is IRS Notice CP259A?
IRS Notice CP259A is sent to business taxpayers who have failed to submit their business tax return by the deadline for a specific tax period. This notice serves as a formal request to file the missing return immediately. The IRS assumes that based on your business’s status, you are required to file and expects a response.
This notice typically applies to businesses that need to file:
- Form 1120 – U.S. Corporation Income Tax Return
- Form 1120S – U.S. Income Tax Return for an S Corporation
- Form 1065 – U.S. Return of Partnership Income
- Form 1041 – U.S. Income Tax Return for Estates and Trusts
If you do not respond to this notice, the IRS may file an SFR (Substitute for Return), which could result in additional penalties, interest, and a higher tax liability than you might owe if you filed the return yourself.
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.
Why did I receive IRS notice CP259A?
You received IRS Notice CP259A because the IRS believes you were required to file a business tax return for a certain period and did not submit it by the deadline. The IRS identifies businesses that need to file tax returns based on various records such as employer identification numbers (EINs), business activity, and past tax filings. If they don’t receive the return on time, they send CP259A to remind you to file.
Here are the most common reasons for receiving this notice:
- You missed the deadline for filing your business tax return.
- You may have misunderstood whether your business needed to file for that tax period.
- The IRS did not process your return yet, and the notice was generated in error.
If you filed your return within the past four weeks, you might be able to disregard the notice, but it’s important to confirm that the IRS has received and processed it.
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Next steps: How to respond to IRS notice CP259A
Upon receiving IRS Notice CP259A, it’s important to act quickly to avoid further complications. Here’s what you should do next:
- Review the notice carefully: Verify which tax period the notice refers to and save a copy for your records.
- Check your records: Ensure that you haven’t already filed the required tax return. If you filed recently, the IRS may still be processing it.
- File your business tax return: If you haven’t filed, submit the return along with any required schedules immediately. Include a signed and dated return, and use the response form and envelope provided in the notice.
- If you don’t need to file: Complete the response form included with the notice, indicating why you believe you’re not required to file. You can mail the form or fax it to the IRS using the number provided (855-800-5944).
- Request a payment plan if necessary: If you can’t pay your taxes in full, set up a payment plan with the IRS to avoid penalties and interest.
Failure to respond by the deadline could result in the IRS filing a Substitute for Return on your behalf, which often results in higher taxes due, as the IRS won’t consider deductions or credits you might be entitled to.
Pro Tip
Always keep copies of your filed tax returns, confirmation emails, and any IRS communications. Proper record-keeping can help you quickly resolve any issues or disputes.
Consequences of ignoring IRS notice CP259A
Ignoring IRS Notice CP259A can lead to several consequences:
- The IRS may prepare a Substitute for Return (SFR) based on information available to them, which likely won’t include deductions, credits, or business expenses.
- Interest and penalties will continue to accumulate on any unpaid tax amounts.
- You may face enforcement actions such as wage garnishments, liens, or levies.
The penalties for not filing your business tax return on time can be severe. The IRS imposes a failure-to-file penalty of 5% of the unpaid taxes for each month the return is late, up to a maximum of 25%. Interest also accrues on the unpaid taxes, which further increases the amount you owe.
What if I don’t think I need to file?
If you believe you aren’t required to file a business tax return for the period in question, you should still respond to IRS Notice CP259A. The IRS provides a response form with the notice, where you can indicate why you think you do not need to file. Common reasons for not needing to file include:
- Your business was inactive or closed during the tax period.
- You filed under a different EIN.
- You are exempt from filing for specific reasons (such as certain nonprofits).
Pro Tip
If you’re unsure about the requirements for your business tax return, consult with a tax professional. This can help you avoid penalties and ensure compliance with IRS regulations.
How to avoid receiving IRS notice CP259A in the future
To avoid receiving IRS Notice CP259A in the future, make sure you follow these tips:
- Keep accurate records: Ensure that you keep track of filing deadlines and the types of returns you are required to submit for your business.
- Use a tax professional: Hiring a CPA or tax preparer can help you stay compliant with IRS regulations and avoid mistakes in filing.
- File extensions if necessary: If you need more time to complete your business tax return, submit Form 7004 to request an extension. This gives you additional time to file without facing penalties for late filing.
- Monitor IRS communications: Regularly check for any IRS notices sent to your business address or online IRS account to ensure you don’t miss any important deadlines.
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Frequently asked questions
What should I do if I already filed my business tax return?
If you have already filed your business tax return but still received IRS Notice CP259A, it’s possible that your return is still being processed. The IRS can take up to four weeks to process returns, especially during peak filing periods. Ensure you have proof of filing, such as a receipt or confirmation number. If more than four weeks have passed since filing, you may contact the IRS using the phone number provided on the notice to verify the status of your return.
Can the IRS file a substitute return on my behalf?
Yes, if you fail to respond to IRS Notice CP259A, the IRS may file a Substitute for Return (SFR) on your behalf. The SFR is based on information the IRS has but does not consider deductions, credits, or expenses that you may qualify for. As a result, the tax amount calculated in an SFR is often higher than what you might owe if you had filed the return yourself.
What penalties could I face for not filing my business tax return?
Failing to file your business tax return can result in several penalties. The IRS imposes a failure-to-file penalty of 5% of the unpaid taxes for each month your return is late, up to a maximum of 25%. Additionally, interest accrues on any unpaid tax amounts, which increases the total amount you owe. Ignoring IRS Notice CP259A may also result in enforcement actions such as liens or wage garnishment.
Can I set up a payment plan if I cannot pay the taxes in full?
Yes, if you cannot pay the full amount of taxes due, you can request a payment plan from the IRS. Filing a return, even if you can’t pay the taxes immediately, is critical because it helps reduce penalties. To set up a payment plan, you can include a request with your response to the notice, or visit the IRS website to apply for an installment agreement.
What should I do if my business was closed or inactive during the tax period?
If your business was closed or inactive during the tax period in question, you might not be required to file a return. However, you still need to respond to IRS Notice CP259A. Complete the response form provided with the notice and indicate that your business was inactive or closed. You may need to provide supporting documentation, such as proof of dissolution or a statement explaining the business’s inactivity during the specified tax period.
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
- IRS Notice CP259A is sent when a business tax return has not been filed by the deadline.
- Responding promptly can help avoid penalties, interest, and the IRS filing a Substitute for Return on your behalf.
- If you don’t think you are required to file, you should still respond to the notice by explaining your situation and providing supporting documentation.
- If you can’t pay the taxes due in full, you can request a payment plan from the IRS to avoid additional penalties.
- Ignoring the notice can lead to more severe consequences, including penalties, interest, and potential IRS enforcement actions such as wage garnishments or liens.
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