Understanding Your IRS CP71 Notice - Reminder of Your Balance Due

Receiving an IRS CP71 notice may initially cause concern, but it is important to understand that this notice serves as an annual reminder of an outstanding tax balance. The CP71 is not a notification of new taxes owed but rather a formal communication from the IRS summarizing your current unpaid balance, including any accumulated penalties and interest. It is intended to prompt taxpayers to review their account and take action to resolve the outstanding amount.

Reasons why you may have received a CP71:

• Existing Unpaid Taxes: A CP71 isn’t about new taxes—it’s a continuation of a prior balance. If you owed money to the IRS last year and haven’t resolved it yet, this notice is your yearly reminder.
• Penalties and Interest Have Accrued: Even if your original balance was small, penalties and interest can build up over time, increasing the amount you owe. The CP71 notice includes these updated totals.
• Missed Payment Plan Installments: If you arranged a payment plan with the IRS but missed payments, the CP71 notice may serve as a reminder to get back on track.
• No Recent Communication: If it’s been a while since you’ve contacted the IRS about your balance, they may issue this notice to keep the matter on your radar.

Next steps:

If you receive a CP71 notice, review it carefully to confirm the details and compare them to your records. If you agree with the balance, pay it promptly to avoid additional interest and penalties. If you disagree, contact the IRS using the number on the notice and provide supporting documentation. If you can’t pay in full, explore payment options like an installment agreement or an offer in compromise.

Still need a little help?

Take our word for it: don't procrastinate! If you do, you might end up owing even more due to penalties and interest. If you're feeling unsure about what to do or if things seem too complicated, don't worry! You can always reach out to a local tax pro for some help. Or, if you prefer, you can chat with our team at Protection Plus to see if our on-demand option works for you. We'll walk you through everything you need to do and can even handle talking to the IRS if it's necessary. Check out our on-demand availability here: https://new.taxprotectionplus.com/contact-us