What is a CP-575 Form? Explanation, Importance, and Uses

Tax forms. Banking applications. Business name registration. There are a lot of different forms and to-dos to check off your list when opening a new business or acquiring an existing one, but one stands as being particularly important for businesses in the United States—the CP-575 form. This article will explain what the CP-575 form is, why it’s important, and how you can get one for your business.

What is an Employer Identification Number (EIN)?

An Employer Identification Number (EIN), also sometimes referred to as a Federal Employer Identification Number (FEIN), is a unique nine-digit number that the IRS assigns to a business entity that allows them to operate within the United States. An EIN is what the IRS uses to identify a business for tax purposes—similar to how a social insurance number works for individuals. It's typically a permanent number that's assigned to a business, and it doesn't need to be renewed. Think of it as the first key step in starting a business in the United States, making you IRS-official in the eyes of the government. Any business that meets the following specs will likely need an EIN number:

• You have employees
• You operate a business as a corporation or partnerships
• You fill employee, excise, or alcohol, tobacco and firearms tax returns
• You withhold taxes on incomes
• You’re involved with certain types of organization, such as trust, estates, and non-profit organizations
• Purchase or inherit a business
• Start a multi-member limited liability company
• Own a business entity that’s taxed as a corporation
• Change the structure or ownership of your business

While many businesses will need an EIN, it may not be necessary for solo operations or simple businesses. If you’re not sure whether you need an EIN number, head over to the IRS website to make sure. With an EIN in hand, you can do all of those things that make your business, well, a business. That includes:

• Filing your business taxes
• Applying for a business loan
• Opening a business checking account
• Building business credit and hiring employees

Okay, so we’ve talked about what an EIN is. But where does a CP-575 form come into the mix? Let's dig into that now.

What is an IRS form CP-575?

An IRS form CP-575 is a notice from the Internal Revenue service. It confirms you’ve been granted an EIN, and the information that you’ve submitted about your business to the government. The CP-575 form, sometimes called an EIN confirmation letter, includes important information about your small business, including:

• Your Employer Identification Number (EIN)
• Your business name
• Your business’s official filing address
• A list of federal tax forms that your company is required to file

The CP-575 is primarily a document for business entities structured as corporations or partnerships. Most sole proprietors likely don’t need an EIN (and therefore a CP-575 form) because they’ll use their Social Security (SS) number instead for filing tax returns and other business operations. The exception to that would be if the sole proprietor ticks any of the boxes in the previous section. When in doubt, always consult the IRS website. If you need to apply for EIN, and receive your CP-575 form, make sure you keep it somewhere safe. The IRS will only ever send you one of these forms. Treat it like your passport or birth certificate.

What is the purpose of the IRS CP-575 form?

The main purpose of the IRS CP-575 form is that it serves as proof for all of the important details about your business that you’ll need for taxes, banking, and compliance purposes. That includes showing proof of your EIN, business name, filing address, and more. We mentioned passports and birth certificates in the last section. This is a good analogy for the role that a CP-575 form will play in your business. It’s an official document that shows proof of your business’s origin, and specific details and who you are, and what you’re entitled to under United States law. Just like you can’t get a passport without a birth certificate, or travel internationally without a passport, you can’t do a lot of important business things without a CP-575 form. That includes:

• Opening a business account
• Getting a business credit card
• Getting payroll setup with your patrol provider
• Securing a Medicare provider
• Communicating with certain government organizations

Just like a passport or birth certificate, you don't need a CP-575 form for all business tasks. Often you can complete simple administrative and financial tasks just by providing the EIN. But, many organizations may still require that you submit a CP-575 form as proof that the EIN is yours. Because of that—and just to emphasize the importance of this form—it’s really important that you keep your CP-575 record safe, secure, and accessible.

EIN confirmation letter vs. CP-575 form: what’s the difference?

When navigating the world of tax returns and banking applications, you may hear the terms “EIN confirmation letter” or “CP-575 form” thrown around a lot. Don’t get confused. These are different names for the exact same form. EIN confirmation letter and CP-575 form or synonyms that refer to the exact same document. Specifically, an official document from the IRS that confirms the issuance of an EIN, and the information related to it.

How to get a CP-575 letter for your business

Getting a CP-575 form starts with applying for an EIN. And that starts by visiting the IRS website to learn about the different ways to apply. The easiest method is by using the online application portal. But, you can also apply by fax, by mail, and over the phone (that last one is only available for international applications). In all cases, this is a free service that’s available to all applications. Before getting started, we encourage you to read up on the eligibility requirements and time considerations for the EIN application to ensure that you’re filing the right documentation. Now that you're homework is done, start working through the application process below (for online applications).

Steps for getting your paperwork complete

• Visit the IRS website and click on the button that says “Apply Online Now”
• Work through the online prompts to submit all relevant information related to your business. This will include:
  • Declaring your business entity’s legal and tax structure. Options include:
    • Trust
    • Estate
    • LLC
    • Corporation
    • Partnership
    • Sole proprietor
• Provide information about other members in your business if you operation as an LLC or partnership
• Explain why you’re requesting an EIN. Options include:
  • Purchased an active business
  • Changed the type of your organization
  • Banking purposes
  • Hired employees
  • Started a new business
• Identify the responsible party for your business, including their Social Security and Tax Identification numbers.
  • This is a contact person who you will make responsible for handling the business’ tax matters.
• Provide a physical address and phone number for your business
• Provide important details about your business entity, including:
  • Name
  • Trade name
  • Start data
• Answer a series of tax-related questions about your business
• Choose an applicable business categories from a pre-built list of categories
• Choose how you want to receive your CP-575 form for confirmation
• Submit the application and wait for your confirmation form

Final steps to complete your paperwork

For businesses applying by phone or fax, you can complete Form SS-4 independently and send it directly to the IRS for processing. Once your form is received, the IRS reviews—and hopefully approves—your EIN application if everything is in order. Then, sit back and relax until your CP-575 form arrives in the mail within about four to six weeks of approval.