Notice CP71: IRS Notice CP71 — Annual Tax Debt Reminder (And Why It Matters More Than It Looks)
Notice CP71 looks routine. The IRS is legally required under IRC § 7524 to send you an annual reminder of your outstanding tax debt — so in that sense, this letter is just the government checking a legal box. But buried inside CP71 is information that could significantly affect your strategy for resolving the debt.
What CP71 Actually Contains
The notice updates your running balance including:
Principal tax owed
Accrued penalties (failure-to-pay, etc.)
Interest calculated through the notice date
The tax periods involved
What it doesn't tell you — but what matters enormously — is the Collection Statute Expiration Date (CSED). Under IRC § 6502, the IRS generally has 10 years from assessment to collect a tax debt. Once that clock expires, the debt is legally uncollectable.
Your 3-Step Action Checklist
Check the new total balance. Compare to prior notices to see how much interest and penalties have accumulated.
Calculate your CSED dates. If you've been carrying this debt for several years, the collection statute may be closer to expiring than you think — which changes your negotiation strategy entirely.
Consider an Offer in Compromise. If the debt is significant and the CSED is within a few years, an OIC may settle the balance for less than you owe.
Why the CSED Changes Everything
Taxpayers who owe large, old debts sometimes benefit from a "wait it out" strategy — particularly if they have no significant assets or income for the IRS to levy. But this is a high-stakes game. Certain actions (like filing for bankruptcy or signing a waiver) can pause or extend the CSED clock. Never make a CSED-based decision without attorney guidance.
Our attorneys review the full collection timeline, calculate every CSED date on your account, and advise you on whether to pay, negotiate, or wait — based on your actual numbers.
Schedule a consultation if you've been carrying IRS debt for years and aren't sure what your options are.