NOTICE CP171

IRS Notices

IRS Notice CP171 is a reminder notice that the IRS sends to businesses that owe outstanding taxes. It is similar to Notice CP71C, which is sent to individuals. Notice CP171 is not a threat of immediate collection action, but it is important to take action to resolve the issue as soon as possible.

Reasons why it happened:

There are a few reasons why a business might receive Notice CP171:

Unpaid taxes: The most common reason is that the business has unpaid taxes. This could be due to a variety of factors, such as financial difficulties, bookkeeping errors, or simply forgetting to pay.
Estimated tax payments: Notice CP171 can also be sent to businesses that have not made their estimated tax payments on time or in full.
Penalties and interest: If a business has unpaid taxes, penalties and interest may also be due. Notice CP171 will remind the business of the total amount owed, including penalties and interest.

Options for responding:

If a business receives Notice CP171, it is important to take action immediately. The IRS can take a variety of collection actions, including liens and levies, if taxes are not paid.

Here are some steps that businesses can take to resolve the issue:

Review the notice carefully: The notice will provide information about the amount owed, the tax period(s) involved, and the due date for payment.
Determine why the taxes are owed: Once the business knows why the taxes are owed, it can develop a plan to pay them off. If the business is unable to pay the full amount owed by the due date, it should contact the IRS to discuss payment options.
File any delinquent returns: If the business has not filed any delinquent returns, it should do so as soon as possible. Filing delinquent returns can help to reduce penalties and interest.
Make a payment plan: If the business is unable to pay the full amount owed by the due date, it can contact the IRS to set up a payment plan. Payment plans can help businesses to avoid further collection actions.

How to avoid it in the future:

File all tax returns on time and in full.
Make estimated tax payments on time and in full.
Keep accurate bookkeeping records.
Contact the IRS if you have any questions or concerns about your taxes.

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