IRS Letters and Notices: What They Mean for Your Foreign-Owned Company

Letters from the IRS reach your company at the address on its IRS record, usually your US business address or a registered agent. When one is forwarded to you, it can be alarming, especially if it mentions penalties. Most IRS letters are routine, a few are urgent, and none should be ignored.

This guide explains the common types foreign-owned companies receive and what to do with each.

How the IRS contacts companies

The IRS contacts businesses primarily by post, to the address on file. It does not open contact through social media, text messages or unexpected emails, and it never asks for payment by gift card or cryptocurrency. Each genuine letter has a notice or letter number in a corner, a date and, often, a response deadline.

That is why your company's mailing address must be current. If letters go to an old address, deadlines can pass without you knowing.

Good-news and routine letters

EIN confirmation (CP 575)

Issued when your company's EIN is assigned. It shows the legal name and EIN. Keep it safe: banks and platforms ask for it. See EIN for non-residents.

EIN verification letter (147C)

A replacement confirmation, issued on request when the original is lost. See lost EIN letter.

Acceptance of an election

If your LLC elected to be taxed as a corporation, or made another election, the IRS may confirm acceptance by letter.

ITIN assignment

Confirms a newly issued ITIN for an individual. See ITIN processing time.

Letters that need a response

Requests for information

The IRS may need a missing signature, a schedule, or clarification on a return. These letters list what is needed and a deadline. A prompt, complete response usually closes the matter.

Notices about a missing return

If IRS records show your company should have filed but did not, for example a missing Form 5472 or partnership return, you may receive a notice asking you to file or explain. This is a signal to act quickly. See missed a US tax filing?

Identity or EIN verification

Occasionally the IRS asks a business to confirm its identity or details before processing a return.

Penalty notices

If a return was filed late, incomplete or not at all, the IRS may assess a penalty and send a notice showing the amount, the reason, a payment deadline and your rights to respond or appeal. For foreign-owned LLCs, the most serious is the $25,000 Form 5472 penalty. See the $25,000 penalty.

A penalty notice is not the end of the road. Depending on your facts, there may be grounds to request abatement, for example reasonable cause. The response deadline on the notice matters, so do not wait.

Balance-due and adjustment notices

These show that the IRS calculates tax owed, or that it changed something on your return. Check them carefully against your records; the IRS can make mistakes too, and changes can sometimes be disputed.

What to do when you receive a letter

1. Note the notice number and the deadline.
2. Do not ignore it. Unanswered notices escalate, and appeal rights can expire.
3. Check it is genuine. Compare the notice number with the IRS's published list and contact details, not the phone number in a suspicious message.
4. Read it fully, including the back pages.
5. Gather your records: the return in question, bank statements and prior correspondence.
6. Respond completely and in time, keeping copies of everything you send.
7. Get help if the letter mentions penalties, adjustments or missing returns.

Spotting scams

Warning signs include: demands for immediate payment, threats of arrest, requests for gift cards, crypto or wire transfers to individuals, unexpected emails with attachments, and pressure not to tell anyone. When in doubt, ask us before responding.

Make sure letters reach you

• Keep the company's IRS address current, especially after changing business address or registered agent.
• Make sure your address service scans and forwards mail promptly.
• If someone else filed your returns, check which address they used.

How UCB helps

We forward and explain IRS correspondence for our clients, prepare responses, file any missing returns and help request penalty relief where appropriate. Our US tax filing service keeps you compliant so most of these letters never arrive.

Received an IRS letter you don't understand? WhatsApp us a photo at +91 8105 199 399 or email info@ucbsolutions.com, and we will tell you what it means and what to do next.