CP71A Notice: Annual Reminder of Balance Due

The CP71A Notice is issued annually to remind taxpayers of their outstanding tax debt with the IRS. This notice is sent to taxpayers with a balance due, providing an updated summary of the debt, including accrued interest and penalties. The CP71A serves as a reminder for taxpayers to take action toward resolving their tax liabilities.

Key elements of IRS CP71A Notice include:

1. Summary of Outstanding Debt
   The notice provides a detailed breakdown of the unpaid balance, including the original tax owed, accumulated interest, and penalties. This total represents the current amount the IRS expects the taxpayer to pay.
2. Payment Options
   Taxpayers are given multiple options to address their debt, including:
   • Full payment: Paying the entire balance to stop further penalties and interest.
   • Installment agreement: Setting up a monthly payment plan to manage the debt over time.
   • Offer in compromise: Taxpayers experiencing financial hardship may apply to settle the debt for less than the full amount.
3. Consequences of Ignoring the Notice
   If the taxpayer does not respond, interest and penalties will continue to accrue on the outstanding balance. Failure to address the debt can lead to enforced collection actions, such as liens or levies, in the future.
4. Importance to Tax Debt Resolution
   The CP71A Notice serves as a critical reminder for taxpayers to address their tax debt. By taking action, taxpayers can avoid the long-term consequences of unpaid taxes, such as additional enforcement actions and compounding interest. This notice offers an opportunity to explore payment options that fit their financial situation.

The CP71A Notice emphasizes the importance of addressing unpaid tax debt and provides a roadmap for taxpayers to resolve their liabilities.