The CP161A Notice is sent by the IRS to businesses as an annual reminder of an outstanding tax balance, including any penalties and interest that have accrued since the original balance was due. This notice is typically sent to businesses that owe taxes such as payroll taxes, excise taxes, or other corporate tax liabilities.
Key details of the CP161A Notice:
- Summary of Debt: The notice includes a breakdown of the current balance due, including the original tax amount, penalties for late payment, and interest that has accrued over time. This allows businesses to see the full amount they owe.
- Payment Options: Businesses are given several payment options, including paying the full balance or setting up an installment agreement. The IRS encourages businesses to resolve the debt as soon as possible to prevent further penalties and interest.
- Consequences of Non-Payment: If the business does not pay the balance, the IRS may take collection actions such as placing a lien on business assets or garnishing business income. The notice provides a deadline for payment to avoid these actions.
- Dispute Rights: If the business believes the balance is incorrect, they can dispute the notice by providing supporting documentation. The CP161A will include instructions on how to submit a dispute.
The CP161A Notice is important for businesses with long-standing tax debt, reminding them of their obligations and providing options to settle the debt before further action is taken.