What is an IRS CP501 notice?

A CP501 is a reminder that you still have an unpaid balance on your tax account. It follows the first bill, the CP14, and shows the tax you owe plus the failure-to-pay penalty and interest that keep accruing.

How long do I have to respond to a CP501?

Pay by the date on the notice, generally about 21 days, to stop more penalty and interest from adding up. If it's ignored, the IRS sends a more urgent reminder (CP503) and eventually a levy notice (CP504).

Can the penalty on a CP501 be removed?

Often yes. The failure-to-pay penalty can come off under First-Time Abate if your prior three years are clean, or under reasonable cause. The tax itself still has to be paid, put on a payment plan, or disputed if it's wrong.

← All notices

IRS Notice CP501: a reminder you still owe tax

Individual Balance due Reminder

What it means

A CP501 is a reminder that your tax account still has an unpaid balance. It comes after the first bill, the CP14, and it means the IRS hasn't received your payment yet. The notice shows the tax you owe plus the failure-to-pay penalty and interest, both of which keep adding up until the balance is cleared.

Your deadline

Pay by the date printed on the notice, generally about 21 days, to stop more penalty and interest from piling on. Those charges keep growing until the tax is paid, so the date matters even if you plan to dispute the amount. Ignore the CP501 and the IRS moves to a more urgent reminder, the CP503, then a notice of intent to levy, the CP504.

Can the penalty be removed?

Often, yes. The penalty, not the tax. The failure-to-pay penalty on a CP501 can usually come off one of two ways:

First-Time Abate (free): if you filed your returns and haven't had penalties in the prior three years, the IRS removes it, increasingly on its own under the new automatic relief program. A single phone call usually settles it.

Reasonable cause: if first-time relief doesn't fit, a serious event outside your control that overlapped the deadline (illness, a death, a disaster) can justify removal, in writing, with documents.

The tax itself isn't abated. You either pay it, set up a payment plan, or dispute it if the amount is wrong.

What to do now

Check the amount against your return and payment records. Make sure a payment wasn't missed.
If you can pay, pay by the date on the notice to stop the meter.
If you can't pay in full, a payment plan stops most of the collection pressure.
Ask to have the penalty removed. That's separate from paying the tax.

See if your penalty is removable →

Common questions

Is a CP501 the same as the first bill?

No. The first bill is the CP14. The CP501 is the reminder that follows when the balance is still unpaid, so the amount often looks a little higher because interest and the penalty have kept running.

What happens if I ignore it?

The IRS escalates. Next is a second, firmer reminder (CP503), then a notice of intent to levy (CP504). Handling the CP501 now keeps you off that track.

Does paying the tax remove the penalty?

No, those are separate. Paying stops new charges, but you still have to ask for the existing penalty to be removed.

This guide is general information, not tax or legal advice. PenaltyLetter is a document-preparation and mailing service and does not represent you before the IRS.