CP264: your S corporation election (Form 2553) was denied

What a CP264 means

A CP264 says the IRS denied your Form 2553, the election to be taxed as an S corporation. The notice explains why it couldn't approve the election. [1]source 1

Nothing has to be done if you don't want S status. If you do, file a new, complete Form 2553 with all required statements; the IRS says there's no waiting period. [1]source 1

The timing matters more than the form. If the election date has passed, the instructions to Form 2553 explain late-election relief, and we'd read those before refiling.

Why people get one

• The election was incomplete or missing a required statement, for example, or couldn't be approved for another reason the notice gives. [1]source 1

First steps

1. Read the notice for the reason the election was denied. [1]source 1
2. If you need a copy of what you filed, request it with Form 4506; there's a fee. [1]source 1
3. File a new, complete and timely Form 2553 with every required statement and signature. [1]source 1
4. Hold off filing Form 1120-S as an S corporation until the election is accepted, or talk to your tax preparer about the year affected.

What not to do

• Don't assume the business is an S corporation because you sent the form. This notice says it isn't, yet.
• Don't pay through a link or phone number in an unexpected email or text. Use irs.gov, typed in yourself.

Keep reading

• S corporation

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