IRS Notice CP 287
What IRS Notice CP 287 means
IRS Notice CP 287 is a notice tied to the account issue described in CP 287. That sounds dry, but the practical point is simple: the IRS has a question, a proposed change, a balance, a refund issue, or a missing piece in its file. The notice number matters because the IRS uses that number to describe the type of problem it believes exists.
A taxpayer should not treat IRS Notice CP 287 like generic junk mail. The IRS says most notices deal with a specific issue and usually explain what action, if any, the taxpayer should take. The problem is that IRS letters are written for the IRS first and the reader second. They can be technically correct and still hard to follow. One paragraph might refer to a tax year. Another might mention a refund, balance, credit, penalty, or deadline. The job is to slow down and read the notice like evidence, not like a threat.
Most account notices are not dramatic, but they still need attention. IRS Notice CP 287 is tied to a tax year, a return, a payment, a penalty, a credit, or another account entry. The notice is the IRS version of a paper trail. Read it against the return and the transcript before deciding what it means.
Why you received IRS Notice CP 287
You received IRS Notice CP 287 because the IRS believes something connected to the account issue described in CP 287 needs attention. The trigger could be a tax return entry, a payment posting, a missing form, a third-party income document, a refund adjustment, a credit review, a penalty, or an account mismatch. Sometimes the IRS changed the return during processing. Sometimes it compared the return to W-2s, 1099s, K-1s, brokerage records, payroll filings, or other data sent by someone else.
Do not assume the IRS is right. Do not assume it is wrong either. That is the boring answer, but it is the answer that saves people money. The notice has to be checked against the filed return, the taxpayer’s records, and the IRS transcript for the year involved.
A common example: a taxpayer moved, changed banks, made an estimated payment under the wrong Social Security number, or received a late Form 1099 after the return was filed. The IRS computer sees a mismatch and sends a notice. Another common version is even more ordinary. The taxpayer entered a number on the wrong line, forgot a schedule, or claimed a credit without attaching the support the IRS wanted to see.
Why IRS Notice CP 287 matters
IRS Notice CP 287 matters because the notice can affect money and future IRS contact. A small refund adjustment can turn into a bigger problem if the taxpayer ignores the explanation. A balance notice can pick up penalties and interest. A proposed adjustment can become harder to dispute if the taxpayer misses the response date. A collection notice can move the account closer to levy activity.
The most dangerous IRS notice is not always the one with the biggest number. It is the one the taxpayer misunderstands. Someone might pay a balance that should have been disputed. Someone else might ignore a correct notice because the IRS wording annoyed them. Neither approach is smart. The better move is to identify what the IRS changed, what records support or contradict the change, and what response path the notice allows.
For IRS Notice CP 287, the taxpayer should look for the notice date, response deadline, tax year, form number, amount due or refund change, and contact instructions. If the notice includes a payment voucher, that does not automatically mean payment is the only option. If the notice says no response is needed, the taxpayer should still keep it with the return records. IRS notices have a way of becoming relevant months later.
Start with the account record
For IRS Notice CP 287, the account transcript is often the best place to start because it shows what the IRS has actually posted. The notice gives the IRS explanation. The transcript shows the account activity. The return shows what the taxpayer reported. Those three records should tell one story. When they don’t, that gap is where the work begins.
How some people handle IRS Notice CP 287
Some people handle IRS Notice CP 287 by creating a simple file before they do anything else. They keep the full notice, the envelope if timing matters, the filed return, wage and income forms, proof of payments, refund records, and any prior IRS letters for that tax year. Then they mark the deadline on a calendar. Not exciting. Very useful.
After that, they compare the IRS version of the facts to their own records. If the notice involves income, they check each W-2, 1099, brokerage statement, K-1, retirement form, and business income record. If it involves a payment, they look for bank withdrawals, Direct Pay confirmations, EFTPS receipts, canceled checks, payroll tax deposits, or estimated tax vouchers. If it involves a credit or dependent, they gather the records that prove eligibility rather than sending a vague explanation.
Some taxpayers agree with IRS Notice CP 287 after doing that review. Some partly agree and partly dispute it. Others respond because the IRS used incomplete information or posted something incorrectly. The right response depends on the notice language, the account transcript, the tax year, and the proof available. A short, clear response with the right documents is usually better than a long letter that explains everything except the actual issue.
Original documents should usually stay with the taxpayer unless the IRS specifically asks for them. Copies, labeled pages, and a mailing record are safer. If the notice allows faxing or online upload, the taxpayer should still save proof of what was sent and when.
How The Reed Corporation can help
The Reed Corporation can review IRS Notice CP 287 and translate it into plain English: what the IRS says, what year is involved, what deadline matters, and what records should be checked before anyone responds. A lot of notice work starts with that step. The letter feels less scary once the issue is named.
We can compare the notice to the filed return, review transcripts, check payment history, look for missing income forms, review credit eligibility, and organize a response package when the facts support one. For balance notices, we can help look at payment options and account status. For refund notices, we can help trace what changed. For examination or proposed adjustment notices, we can help pull the records into a cleaner response.
The point is not to argue with every IRS notice. The point is to avoid guessing. If IRS Notice CP 287 is correct, the taxpayer needs a practical plan. If it is wrong, the response should be specific enough for the IRS to fix the account. If it is partly right, the taxpayer may need to separate the agreed items from the disputed ones.
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What does an IRS Notice CP 287 actually mean for my business?
A CP 287 notice means the IRS denied your Form 8716, the Election To Have a Tax Year Other Than a Required Tax Year, because the agency already has you recorded as a calendar year filer ending December 31. In plain terms, you asked to keep a fiscal year under Internal Revenue Code Section 444, and the IRS looked at its records, saw a December 31 year end, and said no. The cp 287 notice is the formal denial of that request. Your Section 444 election did not take, and the IRS will mail your rejected Form 8716 back to you separately so you have it for your file. We confirmed this language directly against the IRS page for this notice at Understanding your CP287 notice, which states the denial in exactly those terms.
Here is the mechanics behind the cp 287 notice. A partnership, S corporation, or personal service corporation has a required tax year set by statute. For most pass-through entities that required year matches the owners, which usually lands on December 31. Section 444 lets you elect a different fiscal year, but only within a narrow window, and only if your records support it. The deferral period of the elected year cannot exceed three months, and the entity generally has to make the election near the start of its life. When the IRS already shows a calendar year on file for your employer identification number, a later Form 8716 asking for a fiscal year conflicts with that record, and the cp 287 notice is the result. The form and its rules sit at About Form 8716, and the underlying year end framework is in Publication 538.
Worked example. Reed Holdings LLC, an S corporation, filed Form 8716 in March 2026 trying to elect a September 30 fiscal year for the 2026 tax year. The IRS records showed the entity had been filing Form 1120-S on a December 31 basis since 2023. Because a calendar year was already established, the IRS issued a cp 287 notice denying the election. Reed Holdings keeps its December 31 year end and files Form 1120-S as it always has, with no change to its September estimated payments or its March filing rhythm. Nothing about the business operations changed. Only the attempt to switch the tax year failed, and the cp 287 notice documented that failure.
We see this every year. A client reads about Section 444 deferral on a blog, files Form 8716 on their own, and forgets the entity is already locked into a calendar year. The cp 287 notice arrives weeks later and they panic, thinking they owe money. You do not owe anything because of a cp 287 notice. It is a year end denial, not a balance due, and it carries no penalty by itself. The one edge case worth flagging is an S corporation that genuinely wants a fiscal year. That entity may qualify under Revenue Procedure 2006-46 rather than Section 444, which is a different path entirely and does not trigger a cp 287 notice when it is done correctly from the start. If you got a cp 287 notice and you still need a fiscal year, talk to us through our corporate returns team before you refile anything, because refiling the same Form 8716 will just produce the same cp 287 notice.
One more practical point. A cp 287 notice does not change anything about how you report income, payroll, or estimated taxes. Your shareholders or partners still pick up their shares on the same December 31 cycle, your Form 1120-S or Form 1065 still lands on March 15, and your books keep their existing close. The denial touches only the tax year of record. Treat the cp 287 notice as a closed door on the fiscal year question and an open invitation to ask whether the right procedure, filed at the right time, could still get you there in a future entity or under Revenue Procedure 2006-46.
Why did I receive a CP 287 notice from the IRS?
You received a cp 287 notice because the IRS rejected your Form 8716 fiscal year election on the specific ground that your entity is already on a December 31 calendar year. That is the exact trigger for the base CP 287, and it is different from its sibling notices. The IRS sends a CP 287A when Form 8716 was filed late, a CP 287B when the deferral period fails the Section 444 limits, and a CP 287C when a prior Section 444 election already ended and you tried to make a second one. The plain CP 287, the one tied to a calendar year on record, is the version covered here. All four variations are described at the IRS CP287 page, so the first thing to do with any cp 287 notice is read the letter code to confirm which one you actually hold.
The mechanics matter. When you form a partnership, S corporation, or personal service corporation and file your first return, the year end you use sets your tax year of record. If that first return ran through December 31, the IRS now has a calendar year on file. A Form 8716 filed afterward asking for a fiscal year contradicts what the IRS already accepted, so the system generates a cp 287 notice. This is why timing matters so much with Section 444. The election is meant to be made up front, near the start of the entity life, not bolted on after a calendar year has been used for one or more returns. The accounting period framework that governs all of this is in Publication 538, and the form rules are at About Form 8716.
Worked example. A two person partnership, Delgado and Pierce LLP, filed its first Form 1065 for the period ending December 31, 2024. In 2026 a new advisor suggested a January 31 fiscal year to defer income into a later period, so they filed Form 8716. The IRS issued a cp 287 notice because the 2024 return locked in a calendar year. The deferral idea was reasonable in theory, since a January 31 year end would have pushed three months of income later, but it was impossible to retrofit through Section 444 once the calendar year was established. The partnership keeps December 31 and the cp 287 notice closes the question.
We see this every year, usually after an ownership change or a new bookkeeper. Someone wants the fiscal year a prior accountant mentioned, files Form 8716, and the cp 287 notice follows within a month or two. The common mistake is treating Form 8716 like a switch you can flip in any year you please. It is not. It is a one time election with a tight deadline, made early in the entity life. The edge case is an entity in its true first year that files Form 8716 on time and still gets a cp 287 notice. That usually means the IRS recorded a calendar year from an EIN application default answer, and it can sometimes be corrected with documentation showing no calendar year return was ever filed. If your cp 287 notice looks wrong, our notice assistance team can pull your account transcript and confirm what year the IRS actually has on file. You can also reach us through the new client inquiry page to start that review.
One detail people miss. The letter code on a cp 287 notice tells you the precise reason, so do not assume your denial is the calendar year version just because that is the most common. If your notice reads CP 287A, the problem was lateness and the fix is timing. If it reads CP 287B, the deferral period was too long, capped at three months. If it reads CP 287C, you already used your one Section 444 election years ago. Knowing the exact code keeps you from chasing the wrong fix and refiling into the same wall.
Is there a deadline or amount I owe on a CP 287 notice?
No, a cp 287 notice does not carry a balance due and it does not set a payment deadline. This is the single biggest relief once people understand it. The cp 287 notice is a denial of a tax year election, not an assessment of tax, penalty, or interest. The IRS instruction is short and direct. Continue filing your income tax return using your current tax year, which is the December 31 calendar year already on record. There is no check to write because of a cp 287 notice and no response form to return. The official action step is confirmed at the IRS CP287 notice page, which lists exactly one thing to do, and it is not a payment.
The deadline that does matter sits on the other side of this, on Form 8716 itself, and it explains why so many elections fail and produce a cp 287 notice in the first place. Form 8716 is due by the earlier of two dates. The first is the due date, not counting extensions, of the income tax return for the tax year you picked with the Section 444 election. The second is the 15th day of the 5th month after the month your elected tax year begins. So if your elected year starts September 5, the deadline works out to February 15. Miss that window and you get a CP 287A for lateness rather than the base cp 287 notice for a calendar year conflict. Either way the election fails. The form timing details are at About Form 8716, and the year end rules sit in Publication 538.
Worked example. Consider an S corporation that wanted an October 31 fiscal year for 2026. The elected year would begin November 1, 2025. Counting five months forward from November lands the deadline in April, on the 15th day of that fifth month. The entity filed in June, two months past the cutoff. Even setting aside any calendar year problem, the lateness alone would have sunk the election. There was still no dollar amount owed on the resulting notice, just a denied election and a year end that stayed where it was. The lesson is that the money question and the deadline question live on different sides of the transaction.
We see this every year around tax season. A client receives a cp 287 notice, sees the IRS logo and the official letterhead, and assumes it is a bill. They almost pay an amount that does not exist. Read the notice carefully. If it is the base cp 287 notice about a calendar year, there is nothing to pay and nothing to dispute on the money side, only the year end question to resolve. The common mistake is panic payment on a notice that never asked for money. The edge case is a client who has several IRS notices stacked up at once and cannot tell which one carries a balance. A cp 287 notice never does, but a CP14 or CP161 sitting in the same envelope stack might. To sort genuine balance due notices from a harmless cp 287 notice, lean on our tax compliance support so you respond to the right ones and ignore the right ones.
One closing reminder on timing. Because a cp 287 notice carries no payment deadline, there is no interest clock ticking and no collection action coming from it. That is genuinely rare for an IRS notice, and it is why the base cp 287 notice is one of the lower stress letters the agency sends. The pressure, where it exists, was always on the front end Form 8716 deadline you already missed, not on the cp 287 notice in your hand. File your calendar year return on its normal due date and the matter is closed without a dollar changing hands.
How do I respond to or dispute a CP 287 notice?
For most filers, the correct response to a cp 287 notice is to do nothing beyond keeping your current calendar year and continuing to file as you always have. The IRS itself says to continue filing your income tax return using your current tax year. That is the entire required response to a base cp 287 notice. There is no appeal form to mail and no payment to send. The denial stands because your December 31 year end is already established in the IRS record. The action language is on the IRS CP287 page, and the broader playbook for reading and responding to any IRS letter is at Understanding your IRS notice or letter.
If you actually need a fiscal year, the response is different, because Form 8716 is not your only road. An S corporation can request a fiscal year under Revenue Procedure 2006-46 instead of Section 444. That is a separate procedure with a business purpose test or a natural business year test, and it does not run into the calendar year conflict that produced your cp 287 notice. So the real question after a cp 287 notice is not how to fight it, but whether a fiscal year is worth pursuing through the correct channel. If the answer is yes, you switch procedures rather than refile the same form. The form mechanics you would be moving away from are at About Form 8716, and the accounting period background sits in Publication 538.
Worked example. Marisol runs an S corporation and got a cp 287 notice after a do it yourself Form 8716 for a January 31 year end. Her business has a clear seasonal pattern, with roughly 80 percent of revenue arriving between November and January. Rather than dispute the cp 287 notice, we evaluated her under the natural business year test in Revenue Procedure 2006-46, which looks at whether 25 percent or more of gross receipts fall in the last two months of the proposed year. She passed it cleanly, and we filed the request through the proper channel. The cp 287 notice became irrelevant because we stopped trying to force the wrong form and used the procedure that fit her facts.
We see this every year. A client wants to dispute the cp 287 notice on principle, convinced the IRS made an error somewhere. In the base CP 287 situation the IRS is usually right, because the calendar year really is on file from a prior return. The mistake is spending energy disputing a correct denial instead of asking whether a fiscal year is even worth the trouble for the business. The edge case is a genuine IRS recordkeeping error, where the entity never filed a calendar year return yet still received a cp 287 notice. There you pull the account transcript, document the true first year, and contact the IRS to correct the record rather than refiling. Either way, do not refile Form 8716 blindly after a cp 287 notice, because an identical filing produces an identical denial. Let our corporate returns team map the right path first and confirm which procedure actually applies to you.
One more thing worth saying plainly. A cp 287 notice is not a strike against your business and it does not flag you for audit. It is a routine administrative denial that thousands of entities receive every year, almost always because the fiscal year election was attempted too late or against an established calendar year. Responding well means staying calm, reading the letter code, filing on your current year, and deciding deliberately whether a fiscal year is worth pursuing through the correct procedure rather than reacting to the cp 287 notice as if it were an accusation.
What happens if I ignore a CP 287 notice?
If you ignore a cp 287 notice, the immediate consequence is limited, because the notice does not demand payment or impose a deadline on you. The IRS simply keeps your entity on its existing December 31 calendar year and expects you to file accordingly. So ignoring a cp 287 notice does not pile up penalties the way ignoring a balance due notice would. The risk is different and quieter. If you ignore the cp 287 notice and then file your return as though your fiscal year election had succeeded, you create a mismatch between your filed return and the IRS record, and that mismatch is where the real trouble starts. The base guidance to keep filing on your current year is at the IRS CP287 page, and the general notice response guidance is at Understanding your IRS notice or letter.
Here is the mechanics of how ignoring it goes wrong. Say your cp 287 notice denied a September 30 fiscal year, but you ignore it and file a short period or fiscal year return anyway. The IRS expects a December 31 return for that entity. Your fiscal year return posts to the wrong period or rejects outright, and the calendar year return the IRS was waiting for never arrives. Now you have a late or unfiled calendar year return, and late filing of a partnership or S corporation return does carry penalties, currently 245 dollars per partner or shareholder per month for up to 12 months. That penalty did not come from the cp 287 notice. It came from ignoring it and filing on the wrong year. The accounting period rules behind all of this are in Publication 538.
Worked example. A four shareholder S corporation got a cp 287 notice, set it aside, and filed a fiscal year return ending September 30 anyway. The IRS had a December 31 year on file, so the calendar year return was treated as never filed. By the time the mismatch surfaced during a transcript review, the late filing penalty was running at 245 dollars times four shareholders per month. Three months in, that was 2,940 dollars, climbing toward a 12 month ceiling of 11,760 dollars, all of it avoidable by simply heeding the cp 287 notice and filing on December 31 from the start.
We see this every year. The cp 287 notice looks harmless, so it goes in a drawer, and the client files on the year they wanted rather than the year the IRS recorded. The common mistake is assuming a denied election quietly approves itself if you just act as if it did. It does not. The election is dead the moment the cp 287 notice issues. The edge case is an entity that ignores the cp 287 notice, files correctly on the calendar year anyway out of long habit, and suffers no harm at all. That works only by luck, because the filing happened to match the record. Do not rely on luck. Read the cp 287 notice, file on your current calendar year, and if you still want a fiscal year, pursue it through the right procedure. Our tax compliance team keeps your filings aligned with what the IRS actually has on record so a cp 287 notice never quietly turns into a penalty.
One final caution for owners juggling several entities. If you ignore a cp 287 notice on one entity and let its filings drift onto the wrong year, the error tends to compound across later years, because each subsequent return inherits the wrong period assumption. Untangling two or three years of mismatched filings costs far more in time and penalties than the five minutes it takes to read the cp 287 notice and file on the calendar year. Catch it on the first notice, fix the year, and the problem ends there instead of multiplying.