The Internal Revenue Service (IRS) will send you a CP501 notice if you have any unpaid taxes. A CP501 is typically the first reminder that you have unpaid taxes. Following a CP501, the IRS may send a CP502. If you receive a CP502, it is important to respond quickly because this may mean you now owe the IRS more money.
Here is what to do:
Why am I getting a CP502 tax notice?
A CP502 tax notice often means that you did not make any tax payments after you received a CP501. A CP502 is a kind of reminder the IRS will send you so you can make your payments. Your tax payments may be higher since your balance was not resolved the first time and additional interest built up. Or, you could have to pay more because you were penalized for not making payments. Ignoring a CP502 could lead to further IRS notices with severe consequences and possible legal action.
How much do you have to pay?
It is important to read a CP502 and understand when you are required to make a tax payment and how much. You pay your taxes by the due date to reduce further penalties.
If you can not make a payment, you can request to make an installment agreement. This can extend how long you have to pay off your taxes as long as you make regular payments. You may not be immediately approved for an installment agreement. After some deliberation, the IRS may approve or reject your request.
If you believe for any reason that the IRS made a mistake, you can dispute the CP502 with supporting documents. You can seek legal guidance to help discuss your tax payment options.