IRS Balance Due Letter Help

An IRS balance due letter notifies you of unpaid taxes from a previous tax return. These letters are typically sent in a series, escalating if you do not respond.

Types of Balance Due Notices

• CP14 – First notice you owe money
• CP501 – First reminder (sent if CP14 not paid)
• CP503 – Second reminder
• CP504 – Final notice before levy action

Why You Received a Balance Due Notice

• You filed a return showing taxes owed but did not pay
• The IRS adjusted your return and you owe additional tax
• You did not pay estimated taxes or withholding was insufficient
• A previous payment plan defaulted

What to Do If You Agree with the Balance

What to Do If You Disagree with the Balance

If you believe the balance is incorrect:

• Review your tax return and compare to the IRS's calculation
• Gather supporting documents (W-2s, 1099s, payment records, prior correspondence)
• Prepare a written response explaining the discrepancy
• Include copies (not originals) of supporting documents
• Send via certified mail with return receipt requested

What Happens If You Do Not Respond

Payment Plan Options

Short-Term Payment Plan (120 days or less):

• No setup fee
• Available if you owe less than $100,000
• Apply online or by phone

Long-Term Installment Agreement:

• Setup fee: $31-$225 (lower fee if you pay by direct debit)
• Available if you owe less than $50,000 and can pay within 72 months
• Interest and penalties continue to accrue until paid in full