---
title: "CP259: Notice of Failure to File a Tax Return"
description: Got an IRS CP259 notice? Learn why, what it means for your business, & the next steps to resolve it before it escalates into penalties.
---

[IRS Notice Library - Understand the Notice Your Business Received ](https://www.ledgerfi.co/irs-notice-library)

# [CP259: Notice of Failure to File a Tax Return](https://www.ledgerfi.co/irs-notice-library/cp259-notice-of-failure-to-file-a-tax-return)

 Written by [Nathan Hodgens](https://www.ledgerfi.co/irs-notice-library/author/team-ledger) | Mar 27, 2025 6:13:49 PM

## TL; DR 

**Meaning: **A CP259 notice from the IRS means they believe your business was required to file a tax return, and they haven’t received it. It’s not a penalty notice—yet. But it’s a warning, and if you don’t respond, it can lead to serious consequences, including Failure to File penalties.

**Next Steps**: Review your previous return against the CP259. This will help you tailor your response and documentation accordingly.

**What to Do: **Once you receive your CP259, you have three options: file the required return, resubmit your already submitted return, or submit a response form explaining why you don’t need to file 

## **What Is a CP259? **

The CP259 is a **non-filing notice **the IRS sends to businesses when they believe you were required to file a return for a certain tax period, but **they didn’t receive it**. 

It's commonly related to: 

- **Employment taxes (Form 941, Form 940) **
- **Corporate income taxes (Form 1120) **
- **Excise taxes (Form 720) **

**Translation: **The IRS thinks your business skipped a required tax return. 

## **Why Did You Get a CP259 Notice? **

There are several common reasons why the IRS might issue this notice:

1. ### ** You didn’t file a return they expected **

You may have missed filing a payroll return (like a quarterly **Form 941**) or your annual **Form 1120**. If the IRS was expecting it and didn’t get it, you’ll get a CP259. 

1. ### ** You filed late, and the return wasn’t processed yet **

Sometimes businesses file close to or after the deadline, but the IRS runs its non-filer check before your return is processed. 

1. ### ** You stopped operating but didn’t tell the IRS **

If you **closed your business**, but didn’t file a **final return **or mark the return as "final," the IRS will continue to expect future filings. 

## **What to Do When You Receive a CP259 Notice **

**Don’t ignore it. **A CP259 isn’t a penalty yet, but it can quickly become one. **Here’s what you should do: **

1. ### **Review the notice carefully. **

         ○ It will list the tax form and period the IRS expected but didn’t receive.

### 2. **Determine if you actually needed to file. **

○ If you did, **file the return ASAP**. 

○ If you already filed it, check that it was accepted and **resubmit it **if needed. 

○ If you didn’t need to file, there’s usually a **response form or box to check **stating that. 

1. ### **Mail or fax your response **to the address or fax number listed on the notice.
2. ### **Work with your tax professional **to confirm compliance and ensure you’re up to date.

## **Failure to File Penalty **

If you ignore the CP259, and the IRS determines you were required to file, they may:

● Assess a **Failure to File Penalty **(usually 5% of the unpaid tax per month, up to 25%).

● File a substitute return on your behalf, often without deductions or credits.

● Begin **collection actions**. 

**Responding quickly can help avoid penalties. **

### **Understanding the CP259 Notice (Page-by-Page Breakdown) **

### **Page 1: Summary of the Issue**

### ****

- Lists the **form(s) **and **tax period(s) **the IRS expected. 
- Includes basic contact info and a response deadline.

### **Page 2: Response Options **

****

- Usually a **checkbox section **where you can indicate: 

○ You filed already 

○ You are not required to file 

○ You’ll file soon 

- Includes **mailing instructions **and a space for a signature. 

### **Page 3+: Explanation and Next Steps **

- May include a **reminder of penalties **for failure to file. 
- Provides more detail on how to respond or get assistance.

## ****

## **Summary**** **

A **CP259 notice **is a heads-up from the IRS that your **business may have missed a required tax filing**. It’s not a bill or penalty—yet—but it’s a clear sign that you need to **take action**. 

- **File the return **or explain why you don’t need to. 
- **Respond by the deadline **listed. 
- **Avoid future notices or penalties **by staying on top of filing obligations. 

Need help sorting it out? LedgerFi can help you respond to IRS notices, clean up missed filings, and stay compliant year-round. [Reach out](https://meetings.hubspot.com/jeremy721/web-consultation?uuid=ca861878-cb0c-4847-bcce-aac584da8203) to our team for expert bookkeeping and tax support.

[View full post](https://www.ledgerfi.co/irs-notice-library/cp259-notice-of-failure-to-file-a-tax-return)

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