What This Notice Means

The IRS accepted your qualified subchapter S subsidiary election. This notice goes to the subsidiary. It is a confirmation, not a problem.

A qualified subchapter S subsidiary, or QSub, is a corporation wholly owned by an S corporation that has elected this treatment. Its activity is reported along with its parent's.

What to Do

  • Keep this notice in your permanent records.
  • Give your parent corporation a copy.
  • If your address has changed, notify the IRS with Form 8822-B, Change of Address or Responsible Party - Business.

How Your Activity Is Reported

Subsidiary information is reported on Form 851, Affiliations Schedule, and other necessary schedules filed with Form 1120-S, U.S. Income Tax Return for an S Corporation. That return is the parent's return.

Make sure the parent's tax preparer has this notice. The reporting depends on the election being in place.

Why Keep This Notice

QSub status comes up later in audits, sales, financing, and changes of accountants. This notice proves the IRS accepted the election. File it with the corporate minute book and other permanent records.

The parent S corporation receives CP279 for the same election. Keep both together.

If Something Looks Wrong

Compare the names, EINs, and details on the notice to the election that was filed. If anything doesn't match, call the number on your notice. A mistake is easier to fix now than after a return has been filed on the wrong basis.

If you received a CP279A notice and have questions about your company's tax setup, call us at (813) 229-7100.