The CP71 Notice is an annual reminder sent by the IRS to taxpayers with an outstanding balance. This notice serves to inform the taxpayer of the total amount they owe, including any penalties and interest that have accrued since the balance was first established. The IRS sends this notice each year until the debt is fully paid or otherwise resolved.
Key features of the CP71 Notice:
- Summary of Debt: The notice provides a detailed breakdown of the original balance due, the penalties and interest that have been added, and the total amount owed as of the date of the notice. This gives taxpayers a clear view of how their debt has increased over time if it remains unpaid.
- Payment Options: Taxpayers are encouraged to pay the full balance by the deadline provided, but if they cannot do so, the notice will outline various options for settling the debt, such as installment agreements or offers in compromise.
- Consequences of Non-Payment: The CP71 serves as a warning that if the balance remains unpaid, the IRS may take collection actions, such as garnishing wages or placing a lien on the taxpayer’s property. It’s important to address the notice promptly to avoid further penalties and enforcement actions.
- Dispute Process: If the taxpayer believes the balance is incorrect or that they have already paid the debt, they should contact the IRS to resolve the issue.
Receiving the CP71 means the IRS is actively monitoring the taxpayer’s outstanding balance and expects action to be taken to resolve the debt.