CP 501 notice, Reminder Notice of Balance Due, is a simple letter that is easy to understand. If you have a balance due the IRS sends this letter. It is the first notice that is sent to let taxpayers know about money being due on their account.

What should I do after receiving a 501 letter?

Just as the notice itself is simple, the first step is just as easy: pay the money that you owe. The IRS tells you how much of a balance is due, and it is your responsibility to send the money. Use the provided envelope, and include your payment along with the bottom portion of the notice. This will ensure that your payment makes it to the right place, and that the payment is applied to your account without delay.

How long can I wait to respond?

You do not want to wait after receiving a CP 501 notice. Even though this is a simple letter, it is not one to take lightly. It is up to you to either remit payment in full, or to contact the IRS to see what other options are available.

What if I can’t pay in full?

Depending on your balance, you may not be able to pay in one lump sum. At this point you have to contact the IRS. You may quality for an installment agreement. Those in bad financial shape should consider an offer in compromise.

If you do not agree with the CP 501 letter, for whatever reason, contact the IRS and explain the mistakes that you see.

Find more information on CP 501 and what to do when you receive this letter. Connect with experienced tax professionals to help with your taxes.

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