What Does the IRS CP71C Notice Mean?
IRS Annual Reminder of Balance Due and Passport Revocation
If you have unpaid taxes, the IRS will send you Notice CP71 every year to remind you of how much you owe. This notice shows your unpaid tax liability plus interest and penalties. If you receive version CP71C, the notice will also explain that you may lose your passport.
The standard CP71 notice doesn’t threaten any collection actions against you. Unlike other notices, it isn’t warning you of an impending lien, wage garnishment, or asset seizure. However, if you receive the CP71C notice, it explains that you may lose your passport.
To avoid that, you need to respond quickly. To get help now, contact us at the W Tax Group today.
What Is Notice CP71C?
IRS CP71C is an annual reminder of your balance due and an alert about passport revocation. You may receive this letter if you have seriously delinquent tax debt that the IRS is certifying to the State Department. As of 2023, that means you owe $55,000 or more. This number is indexed for inflation every year.
What to Do If You Receive CP71C
To protect your passport, you need to make a payment to get your tax debt under the seriously delinquent level, or you need to contact the IRS to set up an arrangement on your account. Here are the options:
- Installment agreement — You may be able to make monthly payments over the next seven years, but you will generally have to make a financial disclosure and set up direct debits. Typically, the IRS requires a financial disclosure if you owe more than $50,000, but if you owe 2019 taxes, the threshold is a lot higher.
- Offer in compromise — You may be able to settle the tax debt for less than you owe if any of the following apply 1) you prove that you cannot afford to pay the full balance, 2) you don’t owe the liability, or 3) it would be inequitable to force you to pay the full balance.
- Partial payment installment agreements — If you meet the income and asset requirements, you may be able to make monthly payments until the collection statute expires. Then, the IRS erases the remaining debt.
- Currently not collectible status — If you establish that you cannot afford to pay, the IRS will mark your account as non-collectible. It will un-certify your debt to the State Department so that you don’t have to worry about losing your passport, and it will stop all collection actions against you until your finances improve.
Once you enter into one of the above agreements with the IRS, the agency will notify the State Department, and you will be able to use your passport as usual.
What If You Disagree With the Tax Due on Notice CP71C
If you disagree with the amount due on your CP71C notice, you should contact the IRS or reach out to a tax attorney as soon as possible. The steps you should take vary based on why you disagree and when the tax debt was assessed, but here are some of the potential options:
- Request relief on penalties.
- Ask for an audit reconsideration.
- Apply for innocent spouse relief.
- Look into offer in compromise based on doubt as to liability.
- Pay the tax under protest and apply for a refund.
What Happens If You Ignore CP71C?
If you don’t respond, the IRS will certify your tax debt to the State Department if it hasn’t already done so. Then, you won’t be able to get a new passport, renew your passport, or use your passport. If you are out of the country when this happens, you will be allowed to return.
Additionally, if you don’t pay by the date on the notice, interest and penalties will continue to accrue on your account. The IRS may move forward with collection actions such as filing tax liens, garnishing your wages, or seizing your assets.
FAQs About CP71C
To help you understand more about this notice, here are answers to frequently asked questions. If you don’t see your concern, contact us directly.
What is IRS.gov/cp71?
This is a website that directs to the IRS’s webpage about the CP71 notice. The IRS prints a web address at the top of most notices so that taxpayers can learn more.
Who sent notice CP71C?
This notice comes from the IRS’s automated collections system. If a revenue officer has been assigned to your case, they will usually send you another type of notice such as CP508C.
Should you call the IRS about notice CP71C?
If you call, you will be routed to one of the IRS’s call centers that handle the ACS calls. You may be able to set up a payment plan or make other arrangements with the person on the phone, but unfortunately, the least experienced IRS employees work in the call centers. You may want to consult with a tax professional before making the call.
What happens if you call the IRS about this notice?
Because your account is in the automated collection system, you will talk to a different IRS employee every time you call. No one is dedicated to your case. The employee will ask you about your financial situation, and if they see a way for you to pay the debt in full, they may demand full payment. To protect yourself, you may want to weigh all your options before calling.
Why is the IRS sending this notice now?
If you haven’t heard from the IRS, you may be wondering why they’re contacting you now. Generally, the IRS sends this letter out annually, but in some cases, the ACS doesn’t send out letters because it doesn’t want to deal with an influx of calls — The Taxpayer Advocates Service has criticized the IRS for this practice.
Additionally, during COVID, the IRS stopped sending out many automated letters, and the agency didn’t resume sending out letters until 2022. In some cases, the agency may not have had your correct address. In other cases, the agency starts sending out these letters when your tax debt is close to expiring.
What does not CP71C look like?
CP71C looks like a standard IRS notice. It features the IRS logo and return address in the left corner. The right corner shows the type of notice, tax year, notice date, taxpayer ID number, IRS phone number, and your caller ID. Then, it shows the total amount due, and it breaks that down into tax, penalties, and interest.
Typically, there are several additional pages that outline your options and what happens if you ignore the notice. Here is a pdf sample of Notice CP71C from the IRS.
What’s the difference between CP71 and CP71C?
CP71 is your annual reminder of the amount you owe the IRS. CP71C has the same details, but it also notifies you that you may lose your passport.
Are there other CP71 notices?
The IRS also sends out CP71B, CP71S, and CP71U as well as a Spanish version of CP71. These notices all remind you of your balance due, and they only have slight variations. In almost all cases, you will receive an additional notice before the IRS takes collection actions against you.
Get Help With Your Tax Debt
Being in debt can be very stressful, but it’s especially hard when you’re dealing with the IRS. You don’t have to lose your passport. Regardless of your financial situation, you can make arrangements with the IRS that allow you to pay off your tax debt and protect your passport.
To learn more and to get help now, contact us at the W Tax Group today.