CP501 Notice: Reminder of Money Owed to the IRS

A CP501 notice is a reminder that you owe money to the IRS. You should have already received a CP14 or other notice stating that you have a balance due. A CP501 means that the IRS still has not received your payment and is getting closer to taking further collections action.

You can view a sample CP501 notice here.

What if I got a CP501 notice after I already paid?

The IRS takes time to process payments and send out notices, so receiving a CP501 may not mean they haven’t received a recent payment. If you already paid in full or made other payment arrangements, you should call the IRS to confirm your account status.

What if I disagree with the amount owed on my CP501 notice?

If you disagree with the amount you owed, you should review the instructions for how to respond on your original notice or talk to a tax professional.

What are my payment options?

You have several options to pay the balance.

  • Pay now in full via check, direct deposit, or credit card.
  • Installment agreement directly with the IRS to pay off your back taxes with monthly payments.
  • Offer in compromise to pay less than the full amount when it would be impossible for you to pay in full now or in the future.
  • Currently not collectible if your current financial status leaves you unable to pay now but you may be able to pay in the future.

What if I don’t pay?

The IRS is already starting to lose patience. Well actually, they have no feelings, but you are getting closer to a federal tax lien or levy. If you want the IRS to work with you, you need to make some sort of payment arrangement now. Otherwise, you may soon take a hit on your credit report, have your wages garnished, or have money taken out of your bank account.