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IRS TAX PROBLEMS? Get expert help with back taxes, IRS notices, penalties, and more.
IRS NOTICES: TAX DEBT
What is a CP501 notice?
Published on: June 22, 2020
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 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.
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The Money Today Guarantee is only available to clients who (i) are approved for an Early Tax Refund Advance loan; and (ii) elect and are eligible to receive loan funds on a prepaid card. Loan available during hours of operation. Hours vary by location. Loan application must be submitted by 11pm local time. If funds are not credited to your card before 12am local time, Jackson Hewitt will credit $50 within 2 weeks to your card if available or provide you a $50 eGift card. Fees, terms, and conditions apply to the prepaid card.
The Early Tax Refund Advance (ETRA) is a loan secured by, and paid back with, your tax refund and is offered by First Century Bank, N.A. Loan amounts are determined by your expected federal refund, less authorized fees and underwriting. Loan amounts are $300, $500, $1,000, and $1,500. To be eligible for the $1,500 ETRA loan, your expected federal refund, less authorized fees, must be at least $5,000. Most common ETRA loan amount approved is $300. ETRA loan is subject to underwriting and approval. Loan proceeds are typically available on the same day of approval, if disbursed on a prepaid card offered at Jackson Hewitt offices, or in 1-5 business days with direct deposit. Terms and restrictions apply. For details visit jacksonhewitt.com/loans. Jackson Hewitt is a Rhode Island Licensed Loan Broker and holds other relevant licenses for the locations where this product is offered. If approved, a finance charge applies except for residents of CT and NE.
Money Today Guarantee
The Money Today Guarantee is only available to clients who (i) are approved for a refund advance loan; and (ii) elect and are eligible to receive loan funds on a prepaid card. Loan available during hours of operation. Hours vary by location. Loan application must be submitted by 11pm local time. If funds are not credited to your card before 12am local time, Jackson Hewitt will credit $50 within 2 weeks to your card if available or provide you a $50 eGift card. Fees, terms, and conditions apply to the prepaid card.
Early Tax Refund Advance
The Early Tax Refund Advance (ETRA) is a loan secured by, and paid back with, your tax refund and is offered by First Century Bank, N.A. Loan amounts are determined by your expected federal refund, less authorized fees and underwriting. Loan amounts are $300, $500, $1,000, and $1,500. To be eligible for the $1,500 ETRA loan, your expected federal refund, less authorized fees, must be at least $5,000. Most common ETRA loan amount approved is $300. ETRA loan is subject to underwriting and approval. Loan proceeds are typically available on the same day of approval, if disbursed on a prepaid card offered at Jackson Hewitt offices, or in 1-5 business days with direct deposit. Terms and restrictions apply. For details visit jacksonhewitt.com/loans. Jackson Hewitt is a Rhode Island Licensed Loan Broker and holds other relevant licenses for the locations where this product is offered. If approved, a finance charge applies except for residents of CT and NE.