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FIRST REMINDER

IRS Notice CP501: First Reminder - Unpaid Balance

This is your first reminder that you have an unpaid tax balance. The IRS is giving you another opportunity to pay before more serious collection actions begin.

What Does CP501 Mean?

The CP501 notice is sent when you haven't responded to your initial tax bill (CP14). This notice indicates:

  • You received a CP14 notice but haven't made payment or contact
  • Additional interest and penalties have accumulated on your balance
  • This is your last chance before more aggressive collection actions
  • Ignoring this notice will lead to CP503 and potential levies

Your Options to Resolve This

Option 1: Pay Your Balance Immediately

  • • Pay the full amount to stop all penalties and interest
  • • Use IRS.gov for fastest processing
  • • Electronic funds transfer or credit card payment
  • • Include the payment voucher from your notice

Option 2: Set Up a Payment Plan

  • • Apply for an installment agreement online
  • • Choose between short-term (120 days) or long-term plans
  • • Setup fees apply for most payment plans
  • • Interest and penalties continue until paid in full

Option 3: Financial Hardship Programs

  • • Request Currently Not Collectible status if facing hardship
  • • Apply for an Offer in Compromise (settle for less)
  • • Innocent spouse relief (if applicable)
  • • Contact the IRS immediately to discuss your situation

What Happens If You Don't Act?

Collection Actions Will Escalate

Next: CP503 Notice (Final Notice)

Intent to levy your assets and rights to a hearing

Then: Asset Seizure

Bank levies, wage garnishments, property seizure

Finally: Federal Tax Lien

Public record affecting your credit and ability to sell assets

Understanding Your CP501 Notice

Your notice includes detailed information about:

  • • Updated balance with new interest and penalties
  • • Payment due date (typically 30 days)
  • • Daily interest rate calculation
  • • Payment methods and instructions
  • • Contact information for IRS assistance
  • • Your rights as a taxpayer
  • • Options for payment plans
  • • Consequences of continued non-payment

Don't Face the IRS Alone

A CP501 notice means collection actions are escalating. Our tax professionals can help you navigate your options and prevent more serious consequences like asset seizure.

We can help you:

Negotiate with the IRS on your behalf
Set up affordable payment arrangements
Apply for hardship programs
Explore settlement options
Prevent wage garnishments and levies
Handle all IRS communications for you