What it Means to Receive the CP 501 Notice from the IRS and What You Must Do
The CP 501 notice from the IRS is the first automated mailed letter an individual we receive in regards to owing money on back taxes. The letter is simple and it is also straightforward. It provides notification on an outstanding balance. Unlike the letters following if you choose to ignore this one, it does not have a threatening or demanding tone.
I received a CP 501, what should I do next?
If you receive one of these notices, then simply pay the balance that is due. The letter comes with an enclosed envelope so you can easily send the IRS a check. Once the IRS receives your check and the most is posted, the balance that you had will be cleared.
When is the best time to respond to the IRS about a CP 501?
Because every day that you do not pay, penalties will be added to your current balance, it is imperative to get in contact with the IRS promptly after receiving this notice. You can either send in the full balance payment immediately, or you can phone the IRS to converse about other payment options available.
I am suffering from a financial hardship and I cannot pay the taxes mentioned in the CP 501?
If you are unable to provide full payment on the balance owed in full, the IRS has an installment agreement you can apply for that will assist in paying of back taxes. If you choose not to pay, it can be more detrimental, because the IRS will eventually send you a Notice of Federal Tax Lien to claim your assets to pay off the debt.
I can speak directly to the IRS about the CP 501?
Every CP 501 notice has a number listed that you can use to speak with a tax specialist regarding any questions you might have about your account, the balance due, and possible payment options.
I do not think I should have received a CP 501, what is my next step?
If you feel a CP 501 was sent in error, do not delay and speak with the IRS. They will be able to clear up any misunderstandings and assist you in what you should do next.