Tax Relief Services
IRS CP71 Notice Help: Dealing With the Balance Behind the Reminder
Updated
A CP71 is the IRS reminding you that a balance is still open. It is not a levy warning and it is not a new bill. What makes it worth reading is the paragraph the IRS added about passports, and the fact that a balance old enough to earn a reminder is usually a balance that has been growing on interest for a long time.
The short answer: the IRS sent a CP71 because you still have an unpaid balance on one of your tax accounts. The notice asks you to pay in full, pay what you can and set up a payment plan, or contact the IRS about hardship. It also explains that the State Department can deny or revoke a passport for seriously delinquent tax debt. If you do not respond, the IRS says interest continues, penalties may apply, and future refunds may be offset.
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What a CP71 notice is
The IRS's page for this notice says it sent it because you still have an unpaid balance on one of your tax accounts and it requires your immediate attention. That is the entire description of purpose. A CP71 does not announce a new assessment, an audit, or a levy. It restates a balance the IRS already has on its books and asks you to deal with it. The full text is on the IRS's Understanding your CP71 notice page.
In practice we see CP71s on accounts that have been sitting: a balance placed in hardship status years ago, an old year nobody resolved, or a plan that ended before the debt did. The notice is the IRS checking whether anything has changed. Sometimes the answer is that it has, and the account status is out of date. Sometimes the balance is simply still there, larger than when the person last looked.
The passport paragraph
The IRS's description says the notice also explains the U.S. Department of State's ability to deny or revoke a passport if you have seriously delinquent tax debt. Under what happens if you do not respond, it repeats that the State Department may revoke your passport or decline to issue or renew one if you are certified as having seriously delinquent tax debt.
That warning has a threshold and a set of exemptions behind it, and whether it applies to you depends on the size of the balance and whether a lien or levy has already been used. Our passport revocation page sets out the IRS's own definition and the list of statuses it says it will not certify. The short version: a balance in an approved payment plan, an accepted offer, or hardship status is not certified. A balance sitting in nothing is.
What the IRS asks you to do
- Pay the unpaid balance. The IRS says interest and applicable penalties stop being added as soon as you pay in full, and points to paying online with instant confirmation, or by mail with the bottom part of the notice.
- Pay as much as you can now, even if not the full amount, and set up a payment plan for the rest. The IRS says you may qualify by applying online and will receive immediate notification if the plan is approved. If you cannot apply online, mail the installment agreement request or call the toll-free number on the notice.
- Hardship. The IRS says it may temporarily delay collection if you are facing financial hardship until your situation improves.
- An offer in compromise. The IRS says that under certain circumstances an offer allows you to settle your tax debt for less than the full amount, that it may be a legitimate option if you cannot pay the full liability or doing so creates a hardship, and it points to its Pre-Qualifier Tool.
One line on the page deserves its own sentence. The IRS says payments can take up to 21 days to post to your account, and that if you paid your balance in full within the last 21 days you should disregard the notice. A CP71 crossing in the mail with a payment is common and is not a problem.
What happens if you do nothing
The IRS answers this directly. Interest will continue to accrue and additional penalties may apply. Future tax refunds may be offset until the balance is paid. And the State Department may act on the passport if the debt is certified. The FAQ adds that yes, interest accrues until you pay in full, and yes, you receive a late payment penalty if you cannot pay the full amount.
What the CP71 page does not say is anything about a levy, and that is worth noticing. The levy sequence has its own notices, the CP504 and then the LT11, and a CP71 on its own is not one of them. But an account that keeps receiving CP71s with no status on it is an account the IRS can move into that sequence whenever it chooses.
Your realistic options
They are the same four the notice names, and the right one depends on the balance and your situation rather than on the letter.
- Pay it, if the number is right and the money is there. Interest stops.
- A payment plan. The IRS's online tool approves eligible plans immediately. Our IRS payment plans page covers the types, and the payment plan calculator shows what a monthly figure looks like.
- Hardship status. If you cannot pay, the IRS can place the account in a temporary delay. Our currently not collectible page explains what that requires and what it does not do, which is stop interest.
- An offer in compromise, where the balance genuinely exceeds what the IRS could collect from you. Our Offer in Compromise page is frank about who it fits.
What Clarity does with a CP71
We start with the transcript, because a CP71 is often a notice about an account whose status is wrong rather than an account with a new problem. A hardship determination that lapsed. A plan the IRS closed when a return was filed late. A payment applied to the wrong year. The transcript shows the current status and the history, and it tells us whether the right move is to fix the record or to resolve the balance.
- We verify the balance and identify penalties that may be removable, per our penalty abatement page.
- We put a status on the account that the IRS recognises: a plan, hardship, or an offer, whichever the facts support. An account with a status is not certified for passport action and is not in the levy sequence.
- We check the passport exposure against the threshold and the lien and levy history.
- We take the contact, under a power of attorney.
The investigation fee is $495 for an individual and $695 for a business. It covers the transcript pull, the status review and a written plan, and it comes with a 15-day money-back policy from the date you sign. You have the written agreement before anything is charged.
The hard part, stated plainly
The hard part of a CP71 is that it is easy to ignore, because it has been ignored before and nothing happened. The balance on it is often years old and the person receiving it has made peace with owing it. What has changed is the passport paragraph, and the fact that interest has been compounding the whole time. An old balance with no status is the cheapest problem on this site to fix and the most expensive one to keep not fixing.
The second hard part is hardship status. It stops collection; it does not stop interest. Someone who has been in hardship for years receives a CP71 showing a balance that grew every year they were protected. That is how the status works, and it is why the notice is a good moment to ask whether an offer would end the debt rather than pause it.
When you do not need anyone
If you paid within the last 21 days, the IRS says to disregard the notice, and you should. If the balance is right, you can pay it, or you can set up the IRS's online plan and keep to it, do that and skip us.
Where a review earns its fee: the balance is over the passport threshold, you were in hardship status and do not know if you still are, several years are involved, the balance looks wrong, a plan ended before the debt did, or you have been receiving CP71s for years and want the debt to actually end. Those are the cases where the transcript changes the answer.
CP71 Notice Questions, Answered
What is an IRS CP71 notice?
The IRS says it sent the CP71 because you still have an unpaid balance on one of your tax accounts and it requires your immediate attention. It is a reminder of an existing balance rather than a new assessment, and the notice also explains the State Department's ability to deny or revoke a passport for seriously delinquent tax debt.
Is a CP71 a levy notice?
No. The IRS's CP71 page describes interest, penalties, refund offset and passport certification as the consequences of not responding. The levy sequence runs through separate notices, the CP504 and the LT11 or Letter 1058. A CP71 on its own does not announce a levy, though an account left with no status can be moved into that sequence.
What happens if I ignore a CP71?
The IRS says interest will continue to accrue, additional penalties may apply, future tax refunds may be offset until the balance is paid, and the State Department may revoke or decline to issue or renew a passport if you are certified as having seriously delinquent tax debt.
I already paid. Why did I get a CP71?
The IRS says payments can take up to 21 days to post to your account, and that if you paid your balance in full within the last 21 days you should disregard the notice. If the payment was earlier than that, or you have an installment agreement the notice does not reflect, call the number on the notice so the account is corrected.
What are my options for a CP71 balance?
The IRS lists paying in full, paying what you can and setting up a payment plan through its online tool, a temporary delay of collection for financial hardship, and an offer in compromise where you cannot pay the full liability or doing so creates a hardship. It points to its offer Pre-Qualifier Tool for the last option.
Does a CP71 mean my passport will be revoked?
Not by itself. The notice explains that the State Department can act on seriously delinquent tax debt, but certification depends on the balance exceeding the IRS's threshold and on a lien or levy having been used, and the IRS says it does not certify debts in an approved payment plan, an accepted offer, or hardship status.
Results vary based on individual facts and circumstances. Not every taxpayer qualifies for a payment plan, hardship status, penalty relief or an offer in compromise, and no specific outcome is guaranteed. This page is general information about the IRS CP71 notice, not tax or legal advice.
Related Services: CP71 notice: what the annual reminder means · Passport Revocation · IRS Payment Plans · Currently Not Collectible · Offer in Compromise · or return to All Tax Relief Services.
What the IRS says a CP71 leads to, and what each option changes
| If you | What the IRS says happens |
|---|---|
| Pay in full | Interest and applicable penalties stop being added as soon as the balance is paid. |
| Pay what you can and set up a payment plan | You may qualify by applying online, with immediate notification if approved. Interest continues on the remaining balance. |
| Are in financial hardship | The IRS may temporarily delay collection until your situation improves. |
| Cannot pay the full liability | Under certain circumstances an offer in compromise allows you to settle for less than the full amount; the IRS points to its Pre-Qualifier Tool. |
| Do nothing | Interest continues, additional penalties may apply, future refunds may be offset, and the State Department may act on a passport if the debt is certified. |
| Paid within the last 21 days | Payments can take up to 21 days to post; the IRS says to disregard the notice. |
Figures from IRS, Understanding your CP71 notice.
“Payments you make can take up to 21 days to post on your account. If you paid your balance in full within the last 21 days, please disregard the CP71 notice.”
— IRS, Understanding your CP71 notice
The passage quoted above is from IRS, Understanding your CP71 notice.