A CP259 says the IRS shows that your business is required to file a tax return for the periods listed on the notice, and it has not received one. It is the business version of the individual no-record notices, and it applies to businesses with an Employer Identification Number. Because penalties for late business returns can build quickly, this is a notice to handle immediately.
Why you received it
The notice means the IRS expected a return based on your EIN account and did not receive it. If several forms or periods are delinquent, you receive a separate notice for each. The cause may be a return that was never filed, a return filed under a different name or EIN, a return that was rejected, or a filing requirement that should have ended but was never closed with the IRS.
What to do
- Look at the form and period. The notice lists them. Compare them with what you filed and what your business actually did that period.
- If you did not file, file the required return immediately. Electronic filing through an e-file provider is available if eligible. Otherwise file on paper with all required schedules.
- If you filed in the last four weeks under the same name and EIN shown on the notice, the notice may have crossed with your return. Confirm the return was accepted and keep the proof of filing.
- If you believe you are not required to file, complete the response form enclosed with your notice and mail it in the provided envelope, or fax it to the number on the notice. If you use an online fax service, understand its privacy and security policies.
- If you had no employees or no business activity for a period, you still need to respond to the IRS. Generally you do not need to file a return for that period, but you must tell the IRS. If you made deposits or payments for that period, you must file a signed return to get a refund.
- If you cannot pay when you file, request a payment plan. See installment agreements.
Which return is it?
| Return named on the notice | Typically relates to |
|---|---|
| Form 941 | Quarterly federal payroll tax. See Form 941 |
| Form 940 | Annual federal unemployment tax. See Form 940 |
| Form 1120 | C corporation income tax. See C corporation taxes |
Other business returns, such as Forms 1065 and 1120-S, can generate similar delinquency notices. The penalties for those are covered in S corporation and partnership late filing penalty and CP162 notices.
Penalties and interest
The IRS page does not list specific amounts and refers to its penalties page. Late-filing penalties generally accumulate each month a return is late, and interest runs on any tax unpaid. See failure-to-file penalty and employment tax penalties overview. Penalty relief may be available. See first-time penalty abatement.
What happens if you do not respond
The IRS says to file immediately. If a return is still not filed, further notices follow, penalties continue, and the IRS may prepare a return for you using the information it has. For payroll tax returns, that can include a bill and collection steps that reach the owners. See unfiled tax returns.
Common mistakes
- Assuming a closed or dormant business has no filing obligations. Tell the IRS in writing and file final returns where required.
- Ignoring a CP259 because payroll is outsourced. The business is still responsible.
- Using an old address, so notices never arrive. File Form 8822-B to update your address.
- Filing the wrong form because the notice's form number was misread.
- Waiting for a bill before filing.
When to involve a CPA
Delinquent business returns often involve missing books. A CPA can reconstruct the records, prepare the returns in order, and request penalty relief. With a signed Form 2848, we can communicate with the IRS while the work is underway. Our bookkeeping and payroll services can help get you current.
How we can help
We can review the notice, determine which returns are really due, and prepare and file them. See our IRS representation services or contact us.
Frequently asked questions
What if my business is inactive?
Respond to the IRS. Generally you do not need to file for a period with no employees or activity, but you must tell the IRS using the response form.
Can I e-file the missing return?
The IRS says electronic filing is available through an e-file provider if you are eligible. Otherwise file on paper.
Does the notice mean penalties have been charged?
The notice itself does not state penalties. Late-filing penalties can apply once a return is late, so file quickly.
Is this the same as a CP59?
No. A CP59 is for individual returns. See the unfiled return notices.
Official sources
This page is a plain-language summary. The official source controls if there is any difference.
General information only, not tax, legal or accounting advice for your situation. Rules, limits and deadlines change; confirm the current rules with the official source or a qualified professional before you act. Reading this page does not create a professional relationship with CPA Tax Payroll and Accounting Corp.