{"id":880,"date":"2025-03-26T11:50:36","date_gmt":"2025-03-26T11:50:36","guid":{"rendered":"https:\/\/www.tax1099.com\/glossary\/?p=880"},"modified":"2025-03-27T13:25:42","modified_gmt":"2025-03-27T13:25:42","slug":"irs-notice-cp71","status":"publish","type":"post","link":"https:\/\/www.tax1099.com\/glossary\/irs-notice-cp71\/","title":{"rendered":"IRS Notice CP71"},"content":{"rendered":"

What is IRS Notice CP71?<\/span>\u00a0<\/span><\/h2>\n

IRS Notice CP71 is a reminder sent by the IRS to taxpayers who have an outstanding tax balance. This notice outlines the summary of the amount owed, including penalties and interest that have accumulated over a period. It serves as a reminder for taxpayers that they still have an unresolved tax liability which requires immediate action.<\/span>\u00a0<\/span><\/p>\n

Reasons for Receiving IRS Notice CP71<\/span>\u00a0<\/span><\/h2>\n

There are several reasons why a taxpayer may receive a CP71 notice:<\/span>\u00a0<\/span><\/p>\n

Unpaid Tax Balance<\/span><\/b>\u00a0<\/span><\/p>\n

The most common reason for receiving CP71 is having an outstanding tax debt from the previous tax year. The IRS sends this notice as a reminder that the balance remains due.<\/span>\u00a0<\/span><\/p>\n

Accrued Interest and Penalties<\/span><\/b>\u00a0<\/span><\/p>\n

The CP71 notice will add additional charges (interests and penalties) that are incurred if the tax balance is not paid in full.\u00a0<\/span>\u00a0<\/span><\/p>\n

Missed or Late Payments<\/span><\/b>\u00a0<\/span><\/p>\n

If an installment was not paid after setting up a payment plan, the IRS may send CP71 to inform of the remaining balance and any late fees that have been incurred because of the missed payment.<\/span>\u00a0<\/span><\/p>\n

Previous Notices Ignored<\/span><\/b>\u00a0<\/span><\/p>\n

If a taxpayer has received a CP-series notice before, but no action was taken, the taxpayer will receive a CP71 notice as a reminder to respond.<\/span>\u00a0<\/span><\/p>\n

Collections Reminder<\/span><\/b>\u00a0<\/span><\/p>\n

CP71 acts as a final warning before the IRS escalates collection efforts, which could include wage garnishment, tax liens, or levies.<\/span>\u00a0<\/span><\/p>\n

How to Resolve IRS Notice CP71<\/span>\u00a0<\/span><\/h2>\n

Here are a few ways a taxpayer can resolve IRS Notice CP71:<\/span>\u00a0<\/span><\/p>\n

Paying the tax debt in full<\/span><\/b>\u00a0<\/span><\/p>\n

The fastest way to resolve a CP71notice is to pay the full amount owed. This can be done online through the IRS Direct Pay system, mailing a check to the IRS, or via credit or debit card.<\/span>\u00a0<\/span><\/p>\n

Set up a Payment Plan<\/span><\/b>\u00a0<\/span><\/p>\n

If the full amount cannot be paid immediately, the IRS allows taxpayers to opt for a Payment Plan. Either short-term payment plans for balances under $100,000 (to be paid within 180 days) and long-term installment plan for balances under $50,000 (to be paid over several months or years).<\/span>\u00a0<\/span><\/p>\n

Request a Penalty Abatement<\/span><\/b>\u00a0<\/span><\/p>\n

In situations beyond control such as financial hardship, medical emergency or natural disasters, the taxpayer may be able to request a penalty abatement.<\/span>\u00a0<\/span><\/p>\n

Consider an Offer in Compromise (OIC)<\/span><\/b>\u00a0<\/span><\/p>\n

Taxpayers experiencing severe financial hardship may be eligible for Offer in Compromise (OIC) which settles the tax debt for less than the full amount owed.\u00a0<\/span>\u00a0<\/span><\/p>\n

Contact the IRS for Hardship Relief<\/span><\/b>\u00a0<\/span><\/p>\n

In extreme financial hardship cases, the IRS may temporarily delay collection efforts until the financial situation improves.\u00a0<\/span>\u00a0<\/span><\/p>\n

Verify the Notice for Errors<\/span><\/b>\u00a0<\/span><\/p>\n

In some cases, the notice can be disputed by providing documentation and comparing the IRS records with the tax filings and payments made.<\/span>\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

What is IRS Notice CP71?\u00a0 IRS Notice CP71 is a reminder sent by the IRS to taxpayers who have an outstanding tax balance. This notice outlines the summary of the amount owed, including penalties and interest that have accumulated over a period. It serves as a reminder for taxpayers that they still have an unresolved […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[13],"tags":[],"class_list":["post-880","post","type-post","status-publish","format-standard","hentry","category-i"],"yoast_head":"\nIRS Notice CP71: What It Means & How to Respond<\/title>\n<meta name=\"description\" content=\"Got an IRS Notice CP71? 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