IRS Notice Guide
IRS CP501 Notice — What It Means and What To Do
Receiving an IRS CP501 notice can feel overwhelming. This guide explains what the notice means, what the deadlines are, and what options exist for penalty relief.
Response Deadline
The IRS expects a response within 21 days. Acting before this deadline preserves all relief options and prevents escalation to the next collection stage.
What This Notice Means
The IRS is reminding you of an unpaid balance on your tax account. This is the first follow-up notice sent after the initial CP14 balance-due notice went unanswered.
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Common Penalties on This Notice
Failure to Pay (FTP)
Interest
Late Payment Penalty
First Time Abate (FTA) May Apply
Penalties on CP501 notices are often eligible for First Time Abate relief under IRM 20.1.1.3.3.2.1. Taxpayers with a clean 3-year compliance history may qualify for full penalty removal.
FTP penalties referenced in a CP501 remain eligible for First Time Abate if the underlying requirements are met under IRM 20.1.1.3.3.2.1.
What To Do After Receiving a CP501 Notice
Review the balance and compare to your records
Pay the amount owed by the due date to avoid further notices
If you cannot pay in full, contact the IRS to set up a payment plan
Request First Time Abate if applicable penalties are included
Keep records of any payment or correspondence
The IRS offers several penalty relief programs beyond First Time Abate. Upload your notice to see which ones apply to your situation.
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See which penalties may qualify and the amount at issue on your notice. The IRS makes the final decision.
Frequently Asked Questions
What is the difference between a CP14 and a CP501?
A CP14 is the initial balance-due notice. A CP501 is the first reminder sent when the CP14 balance remains unpaid. The amounts may differ due to additional accrued interest and penalties.
How long do I have to pay a CP501?
The notice typically requests payment within 21 days. Failure to respond leads to further collection notices.
Can I still set up a payment plan after receiving a CP501?
Yes. You can apply for an installment agreement or short-term extension through IRS.gov or by calling the number on the notice.
Have a CP501 notice? Check your penalty eligibility.
What comes after a CP501 if I do not pay?
The IRS will send a CP503 (second reminder) and eventually a CP504 (Notice of Intent to Levy). Each notice escalates the urgency of collection.
Will the IRS levy my bank account based on a CP501?
No. The CP501 is a reminder notice only. The IRS must issue a CP504 or LT11 before taking levy action.
Can penalties still be abated at this stage?
Yes. Penalty abatement through First Time Abate or reasonable cause can be requested at any point before or after payment.
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See which penalties may qualify and the amount at issue on your notice. The IRS makes the final decision.