IRS NOTICES: TAX DEBT

What is a CP501 notice?

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

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 Chief Tax Information Officer, responsible for key initiatives that support overall tax service delivery and quality assurance. Mark also serves as a Jackson Hewitt liaison with the Internal Revenue Service, states, and other government authorities. With over 30 years of tax experience and deep knowledge of the federal and state tax codes, Mark is widely referenced as an expert on consumer income tax issues, especially electronic-tax and tax data-protection issues.

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