Understanding your CP261 notice

Notice details

Notice code

CP261

Category

Filing and non-filer

Severity tier

Tier 1 — Routine. Informational or administrative notice; no response typically required.

Governing law

§6651; §6012 (Internal Revenue Code sections)

Source

IRS.gov — Understanding Your IRS Notice

What this notice is

We've accepted your S Corporation election per Form 2553, Election by a Small Business Corporation.

Source: IRS.gov. Reproduced for reference. General information — not legal or tax advice.

What the IRS says to do

Keep this S corporation approval letter (CP261 Notice), in your permanent records. Timely file Form 1120-S, U.S. Income Tax Return for an S Corporation PDF , reporting income/loss for the S corporation including Schedules K-1 (1120-S), Shareholder's Share of Income, Deductions, Credits, etc. PDF , for all shareholders. Timely file all employment tax returns.

This is the IRS’s own guidance reproduced from the IRS notice page. It describes the IRS’s process — it is not legal or tax advice from TaxRiskOS.

Governing IRS procedure (Internal Revenue Manual)

The IRS’s own internal procedures for handling this notice type are documented in the Internal Revenue Manual:

• IRM 5.1.11 — 5.1.11 Delinquent Return Investigations
• IRM 5.18.1 — 5.18.1 Automated Substitute for Return (ASFR) Program
• IRM 4.12.1 — 4.12.1 Nonfiled Returns

Reference to published IRS procedure. General information — not legal or tax advice.

Official IRS reference

Read the official notice page on IRS.gov: https://www.irs.gov/individuals/understanding-your-cp261-notice

Related tools

TaxRiskOS is workflow software for practitioners — it captures the notice, computes the deadline, surfaces the escalation tier, and builds a document checklist. It documents process; it does not give advice or draft responses.

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