The IRS CP501 notice is the first collection notice sent to taxpayers who have an unpaid balance after previous billing notices went unresolved. This notice represents the transition from billing to active collection and serves as a demand for immediate payment of your outstanding tax debt, including any accumulated penalties and interest.

Key Features of the CP501 Notice:

• First official collection notice from the IRS
• Demand for immediate payment of the full balance
• Updated balance including additional penalties and interest
• Clear payment deadline (typically 10 days from notice date)
• Payment options and instructions provided
• Warning of additional collection actions if ignored

Ignoring a CP501 notice triggers the next phase of collection activities:

Within 30 Days:

• CP503 notice (second collection notice) will be sent
• Additional penalties and interest accrue
• Collection file becomes more active

Within 60 Days:

• CP504 notice (final notice before levy) may be issued
• Federal tax liens may be filed
• Asset research and identification begins

Immediate Payment Options:

• Full Payment - Immediately resolves the entire tax debt
• Partial Payment - Demonstrates good faith effort to resolve

Payment Arrangement Options:

• Short-Term Payment Plan - Pay in full within 120 days
• Long-Term Installment Agreement - More than 120 days to pay

A CP501 notice represents a critical opportunity to resolve your tax debt before it becomes more expensive. Here's how we can help:

• Strategic Response Analysis - Determine most cost-effective resolution
• Payment Option Optimization - Negotiate favorable terms
• Professional IRS Negotiation - Work directly with IRS on your behalf
• Collection Action Prevention - Prevent escalation to more serious notices