What Happens After Receiving an IRS Balance Due Notice?
The IRS sends several different types of balance due notices to taxpayers who owe back taxes or who are on an IRS payment plan and missed making a payment. Actions taken by the IRS on individuals who ignore these notices range from additional balance due notices to notices of intent to levy if the taxpayer doesn’t make an immediate payment.
The most common IRS balance due notices received include:
IRS Balance Due Notice CP14
If a taxpayer owes back taxes, they will receive a CP14 Notice. A CP14 Notice is the first balance due notice mailed to individuals owing money to the IRS. When a taxpayer doesn’t pay the balance upon receipt, they’ll be issued the IRS 500 series balance due notices.
IRS Balance Due Notice CP501
The CP501 Notice is a friendly reminder that a balance is owed on your taxes. Taxpayers who missed a monthly plan payment or haven’t responded to a previous balance due notice will likely get a CP501 in the mail.
Response options to a CP501 Notice include:
- Pay the full amount owed by the due date printed on the notice. The IRS allows you to pay online with a debit or credit card or via mail with check or money order.
- Apply for a payment plan.
- Disagree with the balance due notice. To refute a notice, call the number on the back of the notice. Make sure you have documents (amended returns, credit/debit card transactions) to show why you disagree with the IRS.
Be aware that the IRS charges interest on balance due amounts until that amount is paid in full. Failure to respond to a CP501 could result in the IRS filing a “notice of federal tax lien.” This notifies your creditors that the IRS has the right to interests in current and future assets obtained after notice of the lien.
IRS Balance Due Notice CP503
If you receive a CP14 Notice and a CP501 Notice and do not make a payment or fail to contact the IRS, you will likely receive a CP503 Notice in the mail. This is your second reminder from the IRS that you need to make a payment on back taxes owed to the government.
There are several ways you can respond to a CP503 Notice:
- Pay the amount owed in full.
- Make payment arrangements with the IRS.
- Request an appeal before the IRS starts garnishing wages or seizing assets. (Collection Appeals Program)
Let Wiztax Take the Stress and Confusion Out of Responding to IRS Balance Due Notices
Wiztax can help if you received an IRS balance due notice and you’re unable to pay the full amount owed. In around minutes, Wiztax’s free online system will show your Offer in Compromise settlement amount (so you can settle your debt in full), determine whether you qualify for Hardship Status, and/or display your Payment Plan options. Wiztax ensures you include all information needed by the IRS so that your tax debt relief happens sooner rather than later!
Offer in Compromise
An Offer in Compromise (OIC) is an agreement between the taxpayer and the IRS to settle a tax debt for less than the full amount owed. Wiztax asks simple tax questions to calculate your offer and instantly shows your OIC settlement amount.
Hardship Status (“Currently Not Collectible (CNC)”)
Based on your current financial circumstances, Wiztax determines if you qualify for Hardship Status. If you qualify, the IRS will stop all collection activity while you’re in Hardship Status. You won‘t need to make payments on the balance due until you’re more stable financially.
For taxpayers who aren’t eligible for an Offer in Compromise or Hardship Status, Wiztax will show you the IRS Payment Plans you qualify for and your expected monthly payment. Your monthly payment amount depends on your income, expenses and assets.
Whether you qualify for an Offer in Compromise, Hardship Status, or Payment Plan, every Wiztax order includes a Ready to File™ review with a Wiztax Expert who has decades of tax law and IRS experience, so you’re ready to file and stop IRS balance due notices.
Join our Newsletter
Enter your email address to join our free newsletter. Get all the latest news and updates.