Let’s find a tax preparation office for you

or

Information regarding browser or device support

Oh no! We may not fully support the browser or device software you are using!

To experience our site in the best way possible, please update your browser or device software, or move over to another browser.

Close
IRS NOTICES: TAX DEBT

What is a CP501 notice?

Mark Steber Chief Tax Information Officer Published On June 22, 2020

Share

IRS notices are letters sent to inform taxpayers of important tax information. Each one is different, but we can explain what the CP501 is about.

Understanding your CP501 notice

You have an unpaid balance on one of your tax accounts. A CP501 is usually the first notice sent and is a reminder of how much money you owe the IRS. The notice gives details on your due date, amount due, and various payment options. Be sure to make your payment by the due date to avoid penalties.

Type of Notice

Balance due reminder

Why you received the CP501 notice

You received a CP501 notice because you have a balance due on one of your tax accounts. This means you owe money to the IRS. This notice is a reminder, and you should pay your outstanding balance as quickly as possible to avoid late penalties.

Likely next steps

As always, read the notice carefully. Your notice will explain the due date, amount due, and provide payment options. 

If you agree with the amount, follow the directions on the notice and pay the balance by the due date given. You will be charged interest until the amount is paid.

If you disagree with the IRS, you will need to contact the IRS to dispute the balance. The IRS contact information can be found on your CP501 notice. You may also contact the IRS to create a payment plan if needed. To learn more, visit the IRS page, Understanding Your CP501 Notice.

You can also contact a tax professional to learn more about your options.

CP501 Notice deadline 

The deadline for this notice will be stated on the notice itself. Read the notice carefully.

If you miss the deadline

If you do not pay the balance by the deadline/due date, your interest will increase and you may receive additional penalties. The IRS could also file a Notice of Federal Tax Lien on your property at any time if you do not make a payment or set up a payment plan.

About the Author

Mark Steber is Senior Vice President and Chief Tax Information Officer for Jackson Hewitt. With over 30 years of experience, he oversees tax service delivery, quality assurance and tax law adherence. Mark is Jackson Hewitt’s national spokesperson and liaison to the Internal Revenue Service and other government authorities. He is a Certified Public Accountant (CPA), holds registrations in Alabama and Georgia, and is an expert on consumer income taxes including electronic tax and tax data protection.

More about Mark Steber Our Editorial Policy

Related articles

What Is an IRS Offer In Compromise

An Offer in Compromise —also known as an OIC— is an IRS program that allows taxpayers to settle their outstanding debts for a lower amount than currently owed. The IRS may reject the offer if it doesn’t meet their threshold for approval, leaving taxpayers no option but to file an appeal if they choose to pursue their case. In 2017, roughly 62,000 OIC’s were submitted to the IRS with only 25,000 cases being approved. This amounts to a rejection rate of nearly sixty percent and highlights the importance of approaching the OIC application with extensive care and planning. Any errors, miscalculations, or unclear information will slow down the application and possibly lead to a full rejection of the claim. To submit an OIC application, there are clear requirements that must first be met.

View more

What is a CP88 notice?

IRS notices are letters sent to inform taxpayers of important tax information. Each one is different, but we can explain what the CP88 is about.

View more

How to Pay Back Taxes You Owe to the IRS

If you’re getting letters from the IRS about your tax debt, you probably have a lot of questions about what to do next and how to handle paying the IRS. We have answers! Read on to learn more about your options and where you can turn for help when paying your back taxes.

View more

Why Jackson Hewitt®?

We see you

Our Tax Pros will connect with you one-on-one, answer all your questions, and always go the extra mile to support you.

We got you

We have flexible hours, locations, and filing options that cater to every hardworking tax filer.

We fight for you

We won't stop until you get every dollar you deserve, guaranteed. It's what we've been doing for over 35 years.