The CP71A Notice is sent by the IRS annually to remind taxpayers of their outstanding tax debt, including penalties and interest that have accrued since the original balance was due. This notice also provides information on payment options, such as installment agreements, to help taxpayers manage their debt.
Key elements of the CP71A Notice:
- Annual Reminder: The notice is sent once a year to provide taxpayers with a summary of their current tax debt, including any interest and penalties that have been added since the debt was first assessed.
- Breakdown of Debt: The notice includes a detailed breakdown of the total amount owed, including the original tax balance, penalties, and interest. This allows taxpayers to see how much they still owe and how the debt has grown over time.
- Payment Options: The CP71A outlines various payment options available to the taxpayer, including paying the full balance, setting up an installment agreement, or applying for an offer in compromise. The IRS encourages taxpayers to contact them to discuss the best way to resolve their debt.
- Consequences of Non-Payment: If the taxpayer continues to ignore the debt, the IRS may take more aggressive collection actions, such as placing liens on property or garnishing wages.
The CP71A Notice is an important reminder for taxpayers with long-term tax debt, providing them with options to settle the debt and avoid further penalties or enforcement actions.