Notice CP71C - Estimated Tax Penalty

Type: Estimated Tax Penalty | Level: medium

IRC Section: IRC § 6654

Response Deadline: 60 days

This is the IRS's annual reminder that you still owe money. They're updating your balance with the interest and penalties that have accrued over the past year. It's not a new threat — it's a statement. But it's a reminder that the debt isn't going away, and the longer it sits, the more it grows.

A CP71C is an annual reminder that you have an unpaid tax balance. The IRS sends this each year to remind you of the outstanding debt, update you on the current balance (including accrued interest and penalties), and encourage you to resolve the account. It is not a new collection action — it is an informational reminder.

Common Triggers

• Self-employment income
• Investment income
• Inadequate withholding

Resolution Steps

1. Step 1: Review the penalty calculation
2. Step 2: Check if you qualify for first-time abatement
3. Step 3: Contact us to discuss penalty abatement
4. Step 4: Set up estimated payments for next year
5. Step 5: Consider increasing W-4 withholding

Common Questions About CP71C

Why am I getting a CP71C if the IRS hasn't contacted me in months?

The IRS sends CP71C annually to update you on the current balance and remind you that the debt remains. Even if collection activity has paused, interest and penalties continue to accrue until the debt is paid or resolved.

Does a CP71C mean the IRS is about to take action?

Not necessarily. It's an informational notice. However, it does mean your account is still active in the IRS system, and collection action can resume at any time. If you've been in Currently Not Collectible status, this notice may indicate a status review is approaching.

Related Notices

• Notice CP14
• Notice CP501

Additional Resources