The CP171 is the annual balance due reminder for business accounts, the equivalent of the CP71 for individuals. Once a year, the IRS sends this notice to remind your business that it owes money. The notice shows the current balance including accumulated penalties and interest.
What the CP171 Tells You
The notice identifies the tax periods with outstanding balances, the type of tax (income, employment, excise), and the current amount owed. Compare the balance to your records to verify accuracy. If you've made payments that aren't reflected, contact the IRS with proof.
Strategic Considerations
Like the individual CP71, the business CP171 is an annual opportunity to evaluate your resolution strategy. If the balance is in CNC status, the notice confirms the debt still exists even though active collection is suspended. If you're on an installment agreement, verify the payments are being applied correctly.
For business tax debts, pay attention to the Collection Statute Expiration Date. Employment tax debts and corporate income tax debts each have their own CSED. If a CSED is approaching, the resolution calculus changes. A debt that expires in 18 months may not warrant an offer in compromise or aggressive payment plan.
Employment Tax Debts
If the CP171 involves unpaid employment taxes, be aware that the Trust Fund Recovery Penalty may be assessed against responsible individuals personally, even if the business entity is defunct. The annual reminder is also a reminder that personal liability may be at stake.
If your business has an outstanding IRS balance and you want to evaluate your options, call us at (813) 229-7100.