Taxpayer's Guide to IRS CP71 and CP71C Notices

Receiving an IRS notice can be scary and confusing. If you've recently received Notice CP71 or CP71C, you will see this notice number in the top right-hand corner of the letter. You will also see the amount of tax, penalties, and interest that you owe. 

Here's the good news — you don't have to worry too much about this notice. However, you shouldn't necessarily ignore it either. This guide explains what to expect when you receive this notice. 

What Is IRS CP71 Notice?

CP71 is an annual balance notice that the IRS sends to tell you how much tax, penalty, and interest you owe. This letter is a yearly reminder of your outstanding balance.

IRS Notice CP71 doesn't necessarily mean that the IRS plans to garnish your wages, seize your assets, or levy your bank account. If the IRS plans to enforce these types of collection actions, it will send you a Final Notice of Intent to Levy. This usually comes as Notice CP504, CP90, or LT1058, but the final notices can also have other numbers.

What Is Notice CP71C?

Notice CP71C notes how much tax, interest, and penalties you owe. If your passport is denied or revoked, it increases annually with inflation. 

Why Did You Receive the IRS Notice CP71?

CP71 is an automatically generated notice. The IRS's computer systems send this notice annually to taxpayers who owe a debt to the IRS. You will only receive this notice if the IRS knows that you owe taxes. 

Types of CP71 Notices

There are several different types of CP71 notices. Here are the notices in the CP71 series: 

• CP71B -- This lists your balance due including tax, penalties, and interest. It also outlines your options for dealing with your back taxes.
• CP71C -- This also lists your balance due including tax, penalties, and interest. It also alerts you if your passport is going to be revoked or denied. 
• CP71S -- This also lists your tax, penalties, and interest, and gives you options for taking care of your tax problems. 
• CP771 — This is the Spanish language version of the IRS CP71 notice. 
• CP71U — This notes how much tax, penalties, and interest you owe. It also says that you should pay immediate attention to your unpaid balance, but it doesn't threaten immediate collection actions. 

What to Do When You Receive Notice CP71

If you receive Notice CP71, you can contact the IRS directly to make arrangements to take care of your tax debt. Depending on how much you owe and what you can afford to pay, you may be able to set up a payment plan, apply for a settlement on your tax debt, or make other arrangements.

However, when you call the IRS, you get on their radar. For example, if the IRS agent asks you about assets that you could sell to pay your tax debt, you may reveal information that compels the agency to take collection actions against you. You should never hide information from the IRS, but you shouldn't just call and tell them everything either. 

Contact a Tax Professional About Your CP71 Notice

If you contact a tax professional, they'll be able to help you find the best way to deal with your tax debt. For instance, if the collection statute expiration date (CSED) is approaching on your tax debt, your tax debt may expire if you can continue to fly below the radar. Or a tax pro may be able to leverage your upcoming CSED to get you a partial payment installment agreement or an offer in compromise,

These are just examples. The options vary greatly depending on your situation. When you contact a tax professional, they'll be able to let you know about the best option for your situation. They'll also be able to give you a good idea of which tax relief programs you qualify for. 

Get Help With Unpaid IRS Taxes

If you have received IRS notice CP71 or any other notices about an unpaid balance to the IRS, you should reach out to a tax professional for help. They can help you figure out your options based on how much tax you owe. They can negotiate with the IRS on your behalf. They can also help you set up a payment plan or make other arrangements so that you can avoid any unnecessary IRS collections against you.

Using TaxCure, you can search for a tax professional in your area to help you. You can narrow down your results based on experience with specific types of tax problems and solutions. Then, you can contact a local tax pro for a free consultation.