Obtaining EIN is your rite of passage into the business world because it ensures that you can file taxes, open a bank account or apply for business loans. The IRS issues Form CP 575 to tell business owners that their EINs are approved.
Besides, you can only start processing payrolls or obtain credit cards after receiving this letter from the IRS.
Misplacing this document can complicate the management of your business operations, as your vendors might postpone their purchases until you submit the EIN verification letter.
Let’s review the EIN registration process to see why IRS Form CP 575 is important for businesses.
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EIN Registration Process Walkthrough
You’ll have to make a series of important decisions before you start a business, such as choosing the business entity, how many employees you want to have, or selecting the most favorable tax type.
These decisions determine whether you need EIN to start and run a business. Single-member LLCs and sole proprietorships don’t need EIN to file federal taxes because owners can use their SSNs on tax returns.
However, you must apply for EIN if you don’t want to be your business’ only employee or register your company as a partnership, nonprofit, or any other business entity. The EIN application is free, and you can complete it online in a few minutes.
Here’s what you need to apply for EIN online:
- Your business must be located within the US or US Territories.
- A responsible person, usually the business owner, must have a valid SSN, TIN, or ITIN.
- Company’s registered name and address.
- Business entity’s structure type (S Corporation, LLC, nonprofit, etc…)
- Company’s principal business activity.
- Reasons why you’re applying for EIN.
The IRS will approve and assign an EIN to your business instantly after you complete the session and send a verification email to the email address you provided in the application.
Third-Party Designees cannot download CP 575 letter because the IRS will send its electronic version to the person listed on the application as the EIN’s responsible party.
The verification email will contain all information included in CP 575 letter. You can download or print the document and keep its electronic version in your email.
Using Paper Forms to Apply for EIN
Even though applying for EIN online is the easiest and fastest way to get an identification number for your business, the IRS also offers you the option to apply for EIN via mail or fax.
You must print and fill out Form SS-4 Application for Employer Identification Number and mail it to the IRS Cincinnati Ohio office. The IRS will need four to five weeks to process your application and three more weeks to send you the CP 575 letter.
Hence, you must submit your EIN application a couple of months before you intend to use your business’ EIN for the first time.
The Contents of the IRS CP 575 Letter
You will receive the paper version CP 575 letter from the IRS approximately a month or two after you apply for EIN. The document will contain the following information:
- Employer Identification Number the IRS assigned to your business.
- A summary with the notice’s date, information from Form SS-4, and the IRS contact number.
- Instructions on how to utilize EIN correctly.
- The tax information you must use when filing returns.
CP 575 letter will list the following forms you’ll have to use when filing returns:
- Form 1120 – US Corporation Income Tax Return
- Form 8832 – Entity Classification Election
- Form 940 – Employer’s Annual Federal Unemployment (FUTA) Tax Return
- Form 941 – Employer’s Quarterly Federal Tax Return
The letter serves as proof of the EIN the IRS assigned to your business. You will need it in the following contexts:
- Opening a merchant account enables your business to accept credit and debit card payments.
- Businesses must provide EINs and EIN certificates when applying for lines of credit, loans, and credit cards.
- EIN is necessary when obtaining a business license.
- Setting up a business bank account without EIN is often impossible.
- You must provide your EIN when requesting a business credit card report.
- Companies that don’t have EIN cannot hire employees or process salaries.
You may have to provide copies of the CP 575 letter to different institutions or vendors to verify your EIN’s authenticity.
Requesting The Replacement for CP 575 Letter
A certain percentage of CP 575 letters sent via post never reach their recipients. You must contact the IRS if you don’t receive this form more than ten weeks after submitting your EIN application.
Moreover, banks and other financial institutions might request the document when you apply for a loan or decide to open a merchant account.
Submitting the document’s original version to a financial institution or misplacing it will leave you with several options:
- You can request Letter 147C from the IRS.
- Ask a bank to send you a copy of Form CP 575.
- Search for EIN on old tax returns.
- Look for the email you received from the IRS after applying for EIN online.
- Call the IRS and ask the agent to find your EIN in the agency’s system.
The IRS doesn’t issue multiple CP 575 letters but allows businesses to request EIN Verification Letter 147C, EIN Previously Assigned.
You cannot receive this document via email due to safety concerns, so the only way to obtain it is to call 1-800-829-4933 and submit your request to the IRS agent over the phone. The agent will verify your identity during the call and ask you to choose the preferred delivery method.
If you opt to receive this letter via mail, the IRS will need four to six weeks to deliver it to your business address. You can get the document during the phone call if you give the IRS agent your fax number.
Only business owners or EIN’s responsible parties can request Letter 147C from the IRS. Although similar to Form CP 575, EIN Verification Letter 147C only contains the business’s EIN and instructions on how to use the identification number and store the document.
Frequently Asked Questions
You can replace Form CP 575 with just one phone call to the IRS. All you need to do is request EIN Verification Letter 147C and ask the IRS agent to fax the document to you.
The replacement process will take four to six weeks if you don’t have a business fax number.
Business entities in the US can’t have more than one EIN. You don’t have to apply for a new identification number if you misplace CP 575 letter or forget your business’ EIN because the number is stored in the IRS system.
Businesses can use their EINs immediately after completing the online application process to open bank accounts, obtain licenses or file a paper tax return.
The IRS needs a couple of weeks to enter an EIN into its permanent records. During that time, you cannot use your business’ EIN to e-file a tax return, complete the TIN matching program or make online payments.
You must call the IRS and inquire about Form CP 575’s status if the document doesn’t reach you more than ten weeks after you have filed Form SS-4 and applied for your business’ EIN.
The Importance of Form CP 575 for The Growth of Your Business
IRS Form CP 575 is proof of your EIN’s authenticity, and you will receive it after applying for this number online or manually.
The letter’s information can help secure business loans, open a merchant account for your company, and file taxes correctly. Applying for EIN online will reduce the chances of misplacing CP 575 because the IRS will send its digital version to your mail.
You’d have to request Letter 147C from the IRS if you misplaced Form CP 575 after using Form SS-4 to apply for EIN because the agency doesn’t issue multiple versions of this document.
In either case, CP 575 Letter informs you that the EIN registration process was successful and instructs you how to use the number on tax and other financial documents.
Author:
Logan is a practicing CPA and founder of Choice Tax Relief and Money Done Right. After spending nearly a decade in the corporate world helping big businesses save money, he launched his blog with the goal of helping everyday Americans earn, save, and invest more money. Learn more about Logan.
