How to Respond to CP259B Notice from the IRS
Summary:
The IRS issues CP259B notice when their records indicate that a private foundation or certain charitable trusts under Section 4947(a)(1) have not filed Form 990-PF. This form is crucial for reporting financials and activities of the foundation. Failure to file or respond could result in penalties or loss of tax-exempt status. The notice details the steps you must take to correct the issue, whether you are required to file or not.
Receiving a CP259B notice from the IRS is a critical reminder that your organization’s Form 990-PF, Return of Private Foundation, has not been filed. This form is mandatory for private foundations and certain trusts to disclose their financial activities, ensuring transparency and compliance with tax-exempt regulations. If you ignore this notice, your organization may face penalties or even revocation of tax-exempt status.
In this guide, we’ll walk you through what a CP259B notice means, what actions you need to take, and what to do if you think the notice was issued by mistake. Staying on top of these issues is key to maintaining your tax-exempt status and avoiding unnecessary fines.
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What is CP259B notice?
The IRS sends the CP259B notice when their records show that your organization hasn’t filed Form 990-PF. Form 990-PF is a crucial document for private foundations and certain Section 4947(a)(1) trusts because it discloses financial details such as grants, assets, liabilities, and more.
This form allows the IRS to keep track of the organization’s financial health and ensures that it is adhering to the obligations of a tax-exempt entity. If you have received a CP259B notice, it’s either because the IRS didn’t receive the form by the due date or there’s a misunderstanding about whether your organization is required to file.
Pro Tip
Set up IRS account alerts online to get real-time notifications on any changes to your tax return or account. This helps you stay updated on adjustments and due dates.
What to do if you receive CP259B notice
Upon receiving the CP259B notice, it is essential to act promptly to avoid further IRS actions. Here’s a step-by-step process to follow:
- Review the notice carefully: Read through the entire CP259B notice to understand why the IRS believes you haven’t filed Form 990-PF.
- Verify filing requirements: Determine whether your organization is required to file Form 990-PF. Some smaller organizations or inactive trusts may not be required to file.
- If you are required to file: Submit Form 990-PF immediately using the IRS e-file system or mail it with any required schedules. Ensure you include any tax payments due along with a completed Response Form.
- If you have already filed: If your organization has already filed Form 990-PF, double-check your records. If the IRS missed your submission, gather proof of filing (such as a copy of the return or filing receipt) and respond with this documentation.
- If you believe you are not required to file: You’ll need to respond to the IRS explaining why your organization is exempt from filing. Be sure to provide all necessary supporting documents.
Pro Tip
File Form 990-PF electronically to reduce processing times and avoid common mailing issues. Electronic filing ensures that your submission is immediately recorded.
How to file Form 990-PF if you haven’t already
Filing Form 990-PF promptly after receiving a CP259B notice is crucial. Here are the steps to file correctly:
1. Filing electronically
Many organizations are required to file Form 990-PF electronically. Using an authorized IRS e-file provider, submit your form and all the required schedules. Make sure you retain copies for your records.
2. Filing by mail
If your organization is exempt from electronic filing, you can submit Form 990-PF by mail. Use the envelope provided with your CP259B notice and send the following:
- The completed and signed Form 990-PF
- Any required schedules
- A check for any tax due, if applicable
- The completed Response Form that was enclosed with the notice
What happens if you ignore CP259B notice?
Ignoring a CP259B notice can result in severe consequences for your organization, including:
- Penalties: Failing to file Form 990-PF can result in daily penalties until the form is submitted. The longer you wait, the higher the fines accumulate.
- Loss of tax-exempt status: If the IRS determines that your organization has failed to comply with filing requirements, they could revoke your tax-exempt status, leading to higher taxes and potential back payments.
- IRS enforcement actions: Continued non-compliance can trigger further IRS actions, including liens, levies, and garnishments.
Pro Tip
Always keep copies of past Form 990-PF filings and IRS correspondence. This ensures you have a record in case of discrepancies or audits.
How to prevent future issues
Preventing future issues with the IRS is simple if you stay proactive about compliance. Here are some strategies to consider:
- Track filing deadlines: Ensure you know when Form 990-PF is due for your organization. Typically, it’s due by the 15th day of the 5th month after the end of your fiscal year.
- Set reminders: Use calendar alerts or reminders to ensure your organization doesn’t miss critical deadlines.
- Hire a tax professional: If you’re uncertain about whether you need to file or how to file correctly, consult a certified public accountant (CPA) or tax attorney who specializes in non-profit filings.
Consequences of ignoring CP259B notice
Ignoring a CP259B notice can lead to several serious consequences for your organization, including:
- Accumulated penalties: The IRS imposes fines for late or non-filing of Form 990-PF. These penalties can quickly add up, affecting your organization’s finances.
- Loss of tax-exempt status: Failure to file required forms may lead to revocation of your organization’s tax-exempt status, resulting in higher taxes and potential liabilities.
- Increased scrutiny: Ignoring IRS notices can trigger further investigations, leading to more audits or inquiries into your organization’s financial activities.
- Legal repercussions: Prolonged non-compliance may result in legal actions taken against your organization, affecting its operations and reputation.
Seeking professional help
If you find yourself overwhelmed or uncertain about how to respond to a CP259B notice, seeking professional help is a prudent step. Here are some options to consider:
- Consult a tax professional: A certified public accountant (CPA) or tax advisor with experience in non-profit tax filings can provide tailored guidance to ensure compliance and proper response to IRS notices.
- Engage a tax attorney: If your situation involves complex legal issues or potential disputes with the IRS, hiring a tax attorney may help you navigate the legal landscape effectively.
- Utilize IRS resources: The IRS website offers tools, publications, and support services for tax-exempt organizations. Familiarizing yourself with these resources can help you better understand your obligations.
- Reach out to taxpayer advocate services: The IRS has taxpayer advocate services that can provide assistance to organizations facing significant challenges with compliance or understanding IRS communications.
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Frequently asked questions
What is the difference between Form 990 and Form 990-PF?
Form 990 is an annual reporting return that most tax-exempt organizations file to provide the IRS with information on the organization’s programs, finances, and operations. On the other hand, Form 990-PF is specifically for private foundations, including non-exempt charitable trusts, and provides a detailed financial snapshot of the foundation, including assets, grants made, and other relevant financial information.
What happens if my organization is no longer operational but still received a CP259B notice?
If your organization has ceased operations but still received a CP259B notice, you must notify the IRS that the organization is no longer active. You may need to file a final Form 990-PF or contact the IRS directly to explain the situation. It’s important to resolve this quickly to avoid potential penalties.
Can I request an extension for filing Form 990-PF after receiving a CP259B notice?
Yes, you can request an extension for filing Form 990-PF by submitting Form 8868, Application for Extension of Time to File an Exempt Organization Return. However, the extension should be filed before the deadline. If you’ve received a CP259B notice, it’s crucial to act promptly, as the notice indicates that the IRS has already noted the absence of the required filing.
Are there penalties for late filing of Form 990-PF?
Yes, the IRS imposes penalties for late filing of Form 990-PF. The penalty is typically $20 per day for small organizations, with a maximum penalty of $10,500. Larger organizations (those with gross receipts of more than $1,067,000) may face penalties up to $105 per day, with a maximum of $54,000. Penalties can be waived if there is reasonable cause for the delay, but it is up to the IRS’s discretion.
How can I confirm if my Form 990-PF filing has been received by the IRS?
After filing Form 990-PF, you can confirm its receipt by contacting the IRS directly or using the IRS Tax-Exempt Organization Search tool on the IRS website. If you filed electronically, you should receive a confirmation notice from your e-filing provider. For mailed returns, it’s recommended to use certified mail and request a return receipt to verify delivery.
Need help understanding other IRS letters and notices? Visit our comprehensive guide to IRS Letters and Notices or search for the document you received in the table below.
| CP01 | The IRS verified your claim of identity theft and will monitor your account. |
| CP01H | The IRS received a tax return with a social security number that belongs to a dead person. |
| CP02H | Money is due on an amended return based on a grant received due to Hurricane Katrina, Rita, or Wilma. |
| CP03C | You received the First-Time Homebuyer Credit for a house you purchased. |
| CP04 | You may be eligible for tax deferment because either you or a spouse served in a combat zone, a qualified contingency operation, or a hazardous duty station during the tax year specified on your notice. |
| CP08 | You may be entitled to additional money due to the Additional Child Tax Credit. |
| CP10 | Your tax return changed due to a miscalculation, and the refund you wanted to apply to an estimated tax payment has changed. |
| CP10A | Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment has changed. |
| CP11 | You owe money because the IRS amended your return due to a miscalculation. |
| CP11A | Your tax return changed due to a miscalculation of the Earned Income Credit, and the refund you wanted to apply to an estimated tax payment also changed. |
| CP11M | Your tax return changed due to a miscalculation of the Making Work Pay and Government Retiree Credit, and the refund you wanted to apply to an estimated tax payment has changed. |
| CP12 | You are due a bigger refund because the IRS corrected one or more mistakes on your tax return. |
| CP12A | The IRS made changes to correct the Earned Income Credit (EIC) claimed on your tax return. |
| CP12E or CP12F | The IRS corrected a miscalculation on your return. |
| CP12M | The IRS made changes to the computation of the Making Work Pay and/or Government Retiree Credits on your return. |
| CP12R | The IRS made changes to the computation of the Rebate Recovery Credit on your return. |
| CP13 | The IRS made changes to your return due to a miscalculation. There is no refund or amount due. Your balance is zero. |
| CP13A | The IRS made changes to your return due to a miscalculation of the Earned Income Credit. There is no refund or amount due. Your balance is zero. |
| CP13M | The IRS made changes to your return due to a miscalculation of the Making Work Pay credit or the Government Retiree Credit. There is no refund or amount due. Your balance is zero. |
| CP13R | The IRS made changes to your return due to a miscalculation of the Recovery Rebate Credit. There is no refund or amount due. Your balance is zero. |
| CP14 | You owe money on unpaid taxes. |
| CP16 | The IRS made changes to your return due to a miscalculation. The refund you were due was applied to other tax debts. |
| CP21A | You owe money due to the changes you requested that the IRS make on your tax returns. |
| CP21B | You are due a refund due to the changes you requested that the IRS make on your tax returns. The money should arrive within 2 to 3 weeks. |
| CP21C | The IRS made the requested changes to your tax return. You will not receive a refund, and there is no tax due. Your balance is zero. |
| CP21E | As a result of your recent audit, the IRS made changes to your tax return, and you owe money as a result of those changes. |
| CP21I | The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes. |
| CP22A | The IRS made the changes you requested, and you owe money as a result. |
| CP22E | As a result of your recent audit, the IRS changed your tax return, and you now owe money. |
| CP22I | The IRS made changes to your tax return relating to the Individual Retirement Arrangement (IRA) taxes. You owe money due to the changes. |
| CP23 | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You owe taxes due to these changes. |
| CP24 | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes. |
| CP24E | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. This resulted in an overpayment of estimated taxes. |
| CP25 | The IRS changed your return because there was a difference between the amount of estimated tax payments listed on your tax return and the amount actually posted to your account. You are not due a refund, nor do you owe any money. Your balance is zero. |
| CP31 | You need to update your address because your refund check was returned to the IRS. |
| CP45 | The IRS was unable to apply your overpayment to your estimated tax as you requested. |
| CP49 | The IRS used all or part of your refund to pay a tax debt. |
| CP53 | Your refund check will be sent by mail because the IRS can’t provide your refund through direct deposit. |
| CP57 | The bank declined your payment, so the IRS was unable to draft funds from your bank account. |
| CP71 | A reminder of the amount you owe in tax, penalty, and interest. |
| CP71A | A reminder of the amount you owe in tax, penalty, and interest. |
| CP71C | A reminder of the amount you owe in tax, penalty, and interest. |
| CP71D | A reminder of the amount you owe in tax, penalty, and interest. |
| CP88 | The IRS is holding your refund because you haven't filed one or more tax returns, and it believes you will owe tax. |
| CP90 | The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy in a Collection Due Process hearing. |
| CP91 | The IRS will levy up to 15% of your social security benefits for unpaid taxes. |
| CP120 | The IRS needs documentation of your tax-exempt status. |
| CP120A | Your organization’s tax-exempt status has been revoked because it failed to file a Form 990 series return for three consecutive years. |
| CP130 | You may no longer need to pay the Alternative Minimum Tax (AMT) because your tax return filing requirements changed. |
| CP152 | The IRS received your return. |
| CP153 | The IRS will send your refund by mail because your direct deposit did not go through. |
| CP161 | You have an unpaid balance due to the IRS. |
| CP166 | Your monthly payment to the IRS did not go through due to insufficient funds in your bank account. |
| CP178 | You may no longer owe excise tax because your tax return filing requirements changed. |
| CP231 | You need to update your address because your refund was returned to the IRS. |
| CP259 | You did not file the business tax return identified in the notice. |
| CP259A | You should have filed these forms but did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax, or Form 990-N (e-Postcard). |
| CP259B | The IRS requires you to file these forms but did not – Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation. |
| CP259C | The IRS believes that you are a private foundation, but did not file the required Form 990-PF, Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation. |
| CP259D | You must file this form, but you did not – Form 990-T, Exempt Organization Business Income Tax Return. |
| CP259E | You should have filed this form, but you did not – Form 990-N (e-Postcard) or Form 990/990-EZ, Return of Organization Exempt From Income Tax. |
| CP259F | The IRS requires you to file this form but did not – Form 5227, Split-Interest Trust Information Return. |
| CP259G | The IRS requires you to file this form, but you didn’t – Form 1120-POL, U.S. Income Tax Return for Certain Political Organizations. |
| CP259H | As a tax-exempt political organization, you must file this form, but you did not – Form 990/990-EZ, Return of Organization Exempt From Income Tax. |
| CP276A | You submitted your tax liability schedule incorrectly. The IRS typically charges a Federal Tax Deposit (FTD) penalty for this but did not this time. |
| CP276B | The IRS did not receive the correct amount of tax deposits. It normally charges a Federal Tax Deposit (FTD) penalty but did not this time. |
| CP297 | The IRS is notifying you of its intent to levy certain assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing. |
| CP297A | The IRS has levied your assets for unpaid taxes. You have the right to dispute the levy at a Collection Due Process hearing. |
| CP298 | The IRS notifying you of its intent to levy up to 15% of your social security benefits for unpaid taxes. |
| CP501 | You have a balance due on one of your tax accounts. |
| CP503 | You have an unpaid balance on one of your accounts, and the IRS has not heard from you. |
| CP504 | You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy your state income tax refund to apply it to the amount you owe. |
| CP504B | You have an unpaid amount due on your account. If you do not pay immediately, the IRS will levy certain property or rights to property to apply it to the amount you owe. |
| CP521 | A reminder that you have an installment agreement payment due. |
| CP523 | You have defaulted on your payment agreement. Therefore the IRS is terminating the agreement and will levy your assets. |
| CP601 | Usted tiene un saldo pendiente de pago (dinero que le debe al IRS) en una de sus cuentas contributivas. |
| CP603 | No hemos recibido respuesta de parte de usted y todavía tiene un saldo sin pagar en una de sus cuentas contributivas. |
| CP604 | Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará cualquier reembolso de impuestos estatales al que tenga derecho y aplicarlo al pago de su deuda. |
| CP604B | Usted tiene un saldo sin pagar en su cuenta. De no pagar esta cantidad inmediatemente, el IRS embargará ciertas propiedades o derechos de propiedad y lo aplicará al pago de su deuda. |
| CP621 | Este aviso es para notificarle que usted tiene un plan de pagos a plazos vencido. Por favor, envíe el pago inmediatamente. |
| CP623 | Este aviso es para informarle nuestra intención de cancelar su plan de pagos a plazos y confiscar (embargar) sus bienes. Usted incumplió en su acuerdo. |
| CP711 | Nosotros realizamos cambios a su planilla debido a que entendemos que hubo un cálculo erróneo. Como resultado de estos cambios, usted adeuda dinero por sus contribuciones. |
| CP721 | Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos. |
| CP722 | Hicimos el(los) cambio(s) que usted solicitó a su declaración de impuestos para el año tributario que aparece en su aviso. Como resultado de éste(estos) cambio(s) usted debe dinero en sus impuestos. |
| CP771 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP772 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP773 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP774 | Usted recibió este aviso para recordarle sobre la cantidad que adeuda en contribuciones, multas e intereses. |
| CP959 | Usted no radicó su planilla de contribución de negocios identificada en este aviso. |
| CP2000 | The income or payment information on file doesn’t match your tax return. The discrepancy may result in an increase or decrease in your tax due. |
| CP3219A | The IRS has received information that is different from what you reported on your tax return. This may result in an increase or decrease in your tax. |
| CP3219N | The IRS didn’t receive your tax return, so it calculated your return based on the information received from employers, financial institutions, and others. If you want to challenge the proposed tax, you have 90 days from the date of this notice. If you are outside the country, you have 150 days. |
| Letter 0012C | The IRS needs additional information to process your tax return. |
| Letter 0484C | The IRS wants a completed |
| Letter 0525 | Updates you on proposed changes after an IRS examination. Any changes are explained and details the refund due or taxes owed. |
| Letter 531 | IRS Notice of Deficiency. The information the IRS received about you was different from what you reported on your return. |
| Letter 0668D(LP 68) | The IRS released their levy. |
| Letter 0549C | Your tax bill was paid. |
| Letter 0681C | The IRS accepted your payment proposal. However, this is not a formal Installment Agreement. |
| Letter 0757C | You did not adhere to the terms of your Installment Agreement. |
| Letter LT 11 | The IRS plans to seize your property or rights to property. |
| Letter 1058 | The IRS has not received your payment. It plans to seize your property or rights to property. |
| Letter 1615 (LT 18) | You must respond to the IRS within 10 days of this notice regarding past due tax returns. |
| Letter 1737 (LT 27) | Complete and sign Form 433F, Collection Information Statement. |
| Letter 1961C | Your application for a Direct Debit Installment Agreement was declined. It explains why and what you need to do to qualify. |
| Letter 1962C | Your application for a |
| Letter 2050 (LT 16) | The IRS is trying to collect unpaid taxes from you from returns that have been filed or from returns that have not been filed. |
| Letter 2257C | The IRS is providing the payoff amount that you requested. |
| Letter 226-J | An IRS letter to large employers notifying them that they may be liable for an Employer Shared Responsibility Payment (ESRP). |
| Letter 2271C | A request for an Installment Agreement has been approved. It explains the fees and how to qualify for a Low Income Fee Reduction. The letter may also request missing information. |
| Letter 2272C | An IRS letter explaining why your request to pay the balance due in installments was declined. |
| Letter 2273C | A confirmation letter of your request to pay the balance due in installments. It contained the amount to pay, fees charged, and where to send payment. Instructions on how to apply for the Low Income Fee Reduction included. |
| Letter 2318C | A response to a request to pay taxes due to payroll deductions. It also explains the fees that are charged. |
| Letter 2357C | The IRS is admitting that it did not send you the balance due notices that it should have. |
| Letter 2603C | The IRS accepted your installment agreement. The IRS will file a Notice of Federal Tax Lien on your personal property. |
| Letter 2604C | The IRS has accepted your request for installment payments. This IRS letter provides the monthly payment, the address where to send it, and the fees charged. The letter also provides instructions on how to apply for the Low Income Fee Reduction. |
| Letter 2761C | The IRS is requesting your combat zone service dates to ensure that it provides you with the special provisions and protection of the combat zone deferment. Copies of military orders or other documentation to support your time served may be requested. Civilians working in support of the Armed Forces may be required to provide a Letter of Authorization or a letter from their employer. |
| Letter 2789C | An annual reminder notice, as required by law, of the balance due to the IRS. It explains that penalties and interest continue to accrue until the balance is fully paid. |
| Letter 2840C | Confirms your Installment Agreement request and includes the payment amount and due date. This IRS letter explains the fees charged for paying monthly and explains how to apply for the Low Income Fee Reduction (if you qualify). |
| Letter 3030C | Provides an explanation of the tax, penalty, and interest still due on your account. |
| Letter 3127C | A confirmation of your request to make a change to your Installment Agreement. This IRS letter explains the fees for the change. Changes can be to the payment amount or due date, or it can include additional liabilities. |
| Letter 3174 | A reminder of taxes due after the IRS has sent a Notice of Intent to Levy. |
| Letter 3217C | The IRS has accepted your request to pay the balance in installments. This IRS letter provides your payment amount, the due date, and fees charged. The letter also provides instructions on applying for the Low Income Fee Reduction (if you qualify). |
| Letter 3228 (LT 39) | A request to pay the balance due within 10 days using the envelope provided. |
| Letter 3500 | The IRS has received your documents, and it needs additional time to review them. |
| Letter 3572 | Your Federal Income Tax Return has been selected for examination. The IRS auditor requests that you call to schedule an audit appointment. |
| Letter 4883C | The IRS received your federal income tax return but needs more information to verify your identity in order to process your tax return accurately. |
| Letter 4903 (LT 26) | You must file your tax returns immediately. The IRS has previously contacted you, but it did not receive a response. |
| Letter LP 47 | The IRS is trying to locate the person identified in the letter and is requesting that you provide their new address. |
| Letter LP 59 | The IRS has not received a response to the notice of levy it previously sent. |
| Audit Letter 2205 | The IRS manages audits either by mail or through an in-person interview to review your records. The interview may be at an IRS office (office audit) or the taxpayer’s home, place of business, or accountant’s office (field audit). |
| Letter 915 | You recently underwent an audit, and the IRS informs you that you now owe taxes. |
Key takeaways
- CP259B is sent to notify organizations of missing Form 990-PF filings.
- Act promptly by either filing the required form or responding with a clarification if not required to file.
- Failure to file could result in penalties, enforcement actions, or loss of tax-exempt status.
- Organizations can file electronically or by mail, following specific IRS instructions.
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