What Taxpayers Should Know About the IRS CP71 Notice and How an Enrolled Agent Can Help

Receiving a letter from the IRS is always unsettling, even when it is just a reminder. The CP71 Notice is one such letter that taxpayers receive annually if they owe taxes to the IRS. While it is not as urgent or threatening as a Final Notice of Intent to Levy, like all communications from the IRS or a state DOR, the CP71 should never be ignored. It serves a specific and important purpose within the IRS collection process and responding appropriately can make a significant difference in how a tax issue is resolved.

The CP71 Notice is officially titled “Annual Reminder of Balance Due.” It informs the taxpayer of the amount they still owe, including penalties and interest. It also confirms that the IRS has not taken collection action yet but reserves the right to do so. In many ways, this notice functions as a courtesy update, but it is also a clear signal that the debt remains unresolved and on the IRS’s radar.

For many taxpayers, the CP71 is an opportunity to take control of their tax situation before things escalate. However, the complexity of tax laws and the collection process can be overwhelming. This is where the experts at Books, Taxes & More and especially Steve Perry, Enrolled Agent (EA) becomes an essential ally.

An Enrolled Agent is a federally licensed tax professional who is authorized to represent taxpayers before the IRS in all matters, including collections. With Steve’s in-depth understanding of IRS procedures and regulations, he is uniquely equipped to assist individuals and businesses in resolving outstanding tax liabilities.

When a taxpayer receives a CP71 Notice, Steve Perry, EA can help in several important ways. First, he can analyze the notice to ensure that the balance is correct. Sometimes, penalties and interest are incorrectly calculated or duplicated across tax years. Steve can request a detailed transcript from the IRS and identify any errors or opportunities for penalty abatement.

Second, Steve will explain the taxpayer’s options for resolving the debt. Depending on the financial circumstances of the taxpayer, several solutions may be available. These include entering into a monthly installment agreement, submitting an Offer in Compromise to settle the debt for less than the full amount, or requesting Currently Not Collectible status if the taxpayer is unable to pay due to financial hardship. Each option has specific requirements and consequences, and Steve can guide the taxpayer through the process while protecting their rights.

In addition to developing a resolution strategy, Steve at Books, Taxes & More can communicate directly with the IRS on the taxpayer’s behalf. At Books, Taxes & More, our clients never talk to the IRS. This relieves much of the stress that comes with navigating IRS bureaucracy and ensures that deadlines are met and paperwork is correctly filed.

Ignoring the CP71 Notice may not result in immediate enforcement, but it sets the stage for future collection actions. By taking proactive steps with the help of Steve Perry, EA, from Books, Taxes & More,  taxpayers can avoid liens, levies, and further penalties. Addressing the issue early not only brings peace of mind but also opens the door to resolving the tax debt on favorable terms.

If any IRS or DOR correspondence hits the mailbox, please contact Steve Perry, EA at Books, Taxes & More, LLC.  Our number is 678-717-9818.