CP161 Notice: Balance Due on Business Taxes

The CP161 Notice is sent by the IRS to notify businesses that they owe a balance on their tax return. This notice includes the original tax balance due, along with any penalties and interest that have accrued. The CP161 typically applies to business taxes such as payroll taxes, excise taxes, or corporate income taxes.

Key details of the CP161 Notice:

• Breakdown of Amount Owed: The notice provides a detailed breakdown of the balance due, including the original tax amount, any penalties for late payment, and interest accrued since the tax return was filed.
• Payment Options: Businesses are given several options for paying the balance, including paying in full, setting up an installment agreement, or paying through the IRS’s online payment portal. The notice will include a deadline for payment to avoid additional penalties.
• Consequences of Non-Payment: If the business does not pay the balance by the deadline, additional penalties and interest will accrue, and the IRS may take further collection actions, such as placing a lien on business assets or seizing bank accounts.
• Dispute Rights: If the business believes the balance due is incorrect, they can dispute the notice by providing documentation to support their claim. The CP161 will include instructions for disputing the balance.

The CP161 Notice is an important communication for businesses, as failing to resolve the balance due can lead to significant financial consequences.