IRS CP71 / CP71C Notice: Annual Balance Reminder
A CP71 or CP71C is the IRS's annual reminder that you still owe a tax balance — it isn't a new bill or a levy threat, but it shows the debt (with penalties and interest) is active and growing.
What a CP71 / CP71C actually means
The IRS is legally required to remind you of an unpaid balance once a year. Receiving one means the account isn't in an active resolution (or is in hardship status but still accruing).
It's also a strategic checkpoint: the IRS generally has 10 years from assessment to collect (the CSED). A CP71C in year 7 or 8 signals different negotiating leverage than one in year 2 — and hardship, payment-plan, or Offer in Compromise math changes with the clock.
How to recognize a real CP71 / CP71C
The IRS sends it once a year because it is legally required to remind you of an unpaid balance. The Taxpayer Advocate Service lists its full title as 'Taxes Still Owed - Annual Reminder - Your Passport May be Denied or Revoked'.
- The heading reads 'Annual reminder of balance due taxes for tax year [year]', with 'Amount due:' and the line 'We're required to send you this annual reminder'.
- A Billing Summary shows the amount owed, failure-to-pay penalty, interest, and a pay-by date. A payment stub is attached.
- It says you don't need to do anything if you're already working with the IRS, have an installment agreement, or were told enforced collection was suspended for hardship and your finances haven't changed.
- A 'What you need to know' section explains passport denial or revocation for seriously delinquent tax debt under IRC section 7345.
- It says these reminders will keep coming each year until the statute of limitations for collection expires.
What to do, step by step
- 1Verify the balance and the year it relates to; pull account transcripts to see the assessment date.
- 2If you can address it, act — installment agreement, Offer in Compromise, or hardship (CNC) status.
- 3If you're already in CNC status, no action is required; the letter is just the annual notice.
- 4Check the collection statute expiration: old debts may be closer to expiring than you think.
Illustrative example
Example: Raymond's finances changed since his hardship status
Raymond (an illustrative taxpayer) owed about $14,000 for 2019. In 2023 the IRS placed his account in hardship status after he lost his job, and the CP71C reminders kept arriving each January. The notice says no action is needed if collection was suspended for hardship and your finances haven't changed.
By 2026, Raymond had a steady job again. His situation had changed, so the 'no action' line no longer applied to him. Penalties and interest had also kept growing during the hardship period.
He called the number on the notice, asked about the failure-to-pay penalty, and set up an installment agreement he could afford. That was better than waiting for the IRS to review the account and resume collection on its own terms.
Names and numbers are made up to show how this notice typically plays out.
Mistakes that make a CP71 / CP71C worse
- Reading 'you don't need to do anything' as permanent. It applies only while you have an arrangement, or while your hardship situation is unchanged.
- Ignoring the passport section. A large enough balance with a filed lien notice or an issued levy can be certified to the State Department.
- Assuming hardship status freezes the balance. The CP71C billing summary shows penalties and interest still added on.
- Paying twice on a joint account. Both spouses receive the same notice, and it says to pay only once.
What happens if you ignore a CP71 / CP71C
The IRS will keep sending annual reminders until the collection statute expires. In the meantime, the notice says it can file a Notice of Federal Tax Lien and may levy, subject to Collection Due Process rights. The IRS page adds that the account could be assigned to a private collection agency, and interest and penalties keep growing.
Often comes before a CP71 / CP71C
Common questions
Does a CP71C mean the IRS is about to levy?+
No — it's an annual statement, not a levy warning. But it confirms the debt is active, and if you've never resolved it, escalation letters can resume at any time.
Do IRS tax debts expire?+
Generally yes — 10 years from assessment (the Collection Statute Expiration Date), though payment plans, offers, and bankruptcies can pause the clock. Transcripts reveal the real dates.
Checked against IRS primary sources — see how we source these guides. You can verify any notice directly at IRS.gov. The dates and instructions printed on your specific notice always control. Official IRS explanation: Understanding your CP71C notice.
Go deeper
Received a CP71 / CP71C? Get it handled.
Talk to a tax specialist about your notice — free, no pressure, no judgment.