CP261 is the approval notice for 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 1120S, U.S. Income Tax Return for an S Corporation , reporting income/loss for the S corporation including Schedules K-1 (Form 1065), Partner's Share of Income, Deductions, Credits, etc. , 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 , to ensure our records remain correct.
Frequently asked questions
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 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. See IRB 2017-1 .
Links that you may find useful
- S Corporations
- Form 1120S, 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