CP71C IRS tax notice warning of owed debt, including interest and penalties, with potential passport eligibility implications.

CP71C Notice: Understanding Your Tax Debt and Avoiding Serious Consequences

Taxpayer Advocacy
July 11, 2024•2 min read

Understanding the CP71C Notice and How to Take Action

If you've received a CP71C notice from the IRS, it means your tax debt has been left unresolved for a significant period, and it's time to take serious action. This letter restates the total amount owed, including any interest and penalties that have accumulated over time.

Unlike other IRS notices, the CP71C notice isn't just a reminder. It's a more urgent warning, often sent when your tax debt has been unattended for several years. In addition to restating your debt, the notice also warns that you could lose eligibility for a United States passport if the debt remains unresolved.

What You Should Do When You Receive a CP71C Notice:

Read the Notice Carefully:

The first step is to thoroughly review the CP71C notice. It will outline the principal amount you owe, along with the interest and penalties that have been added over time. Understanding the full scope of your debt is essential for taking the next steps.

Pay Your Debt in Full:

If possible, the best solution is to pay off your debt immediately. Settling your account in full will stop further interest and penalties from accumulating, and it will help you avoid any serious consequences.

Explore Payment Options:

If paying your entire debt upfront isn’t feasible, the IRS offers several options to help you manage your debt. You can apply for a payment plan, which allows you to pay off your debt in manageable installments.

Consider an Offer in Compromise:

If you're facing financial hardship, the IRS may allow you to settle your debt for less than the full amount owed through an Offer in Compromise. This option is ideal for those who are unable to pay the full balance due to financial struggles.

Why Act Now?

The CP71C notice serves as a reminder that your tax debt isn't going away on its own. If ignored, it could lead to serious consequences, including losing your eligibility for a U.S. passport. Taking swift action will prevent additional penalties and legal issues from piling up.

Whether you opt to pay your debt in full, apply for a repayment plan, or pursue an Offer in Compromise, resolving your tax debt promptly is the best way to avoid long-term financial and personal complications.

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Jane Taxman is a seasoned tax professional with over 15 years of experience in helping individuals and businesses navigate complex tax issues. Specializing in tax debt relief and compliance, Jane has a deep understanding of IRS policies and programs, including the Fresh Start Initiative. Her passion for assisting taxpayers in achieving financial stability and her ability to simplify complicated tax concepts make her a trusted advisor and valuable resource. When she's not demystifying taxes, Jane enjoys writing informative articles to empower readers with the knowledge they need to manage their financial responsibilities confidently.

Jane Taxman

Jane Taxman is a seasoned tax professional with over 15 years of experience in helping individuals and businesses navigate complex tax issues. Specializing in tax debt relief and compliance, Jane has a deep understanding of IRS policies and programs, including the Fresh Start Initiative. Her passion for assisting taxpayers in achieving financial stability and her ability to simplify complicated tax concepts make her a trusted advisor and valuable resource. When she's not demystifying taxes, Jane enjoys writing informative articles to empower readers with the knowledge they need to manage their financial responsibilities confidently.

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