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The IRS notice CP161- Tackling your unpaid balance

Just received a CP161 notice?

As we always emphasize, the first step to responding to IRS notices is knowing what the notice is about and the implication it will have on your taxes. This will help you better analyze the situation before you, and know what to do about it.

If you have received the IRS notice CP161, it is simply because the IRS is trying to inform you of your balance due. And they’re not only informing you, but they are also requesting that you pay it up before the deadline specified on the document you have in your hands. The deadline which is usually 10 days is indicated on the notice clearly, so you have little to no excuses if you miss it.

Regardless, it is important to note that the IRS notice CP 161 does not only come when a person has a balance due. Sometimes, submitting a form 1041 tax payment to the IRS could lead to you receiving a notice cp161. In this case, even if the notice says you have unpaid taxes due, you know that it is an error. This happened when people submitted the form 1041 tax payment in 2019. The IRS explained that it was an error and it happened because, during the COVID-19 pandemic, there was limited IRS staff. The form 1041 payments were not recorded or deposited yet.

If such a case reoccurs, you are advised not to send another check, instead, keep a close eye on your bank account.

And if you made previous payments but they’re not reflecting on the notice, contact the IRS via the number shown on the notice and request that they research your missing proof of payments.

Although the IRS notice CP161 requires that you take action, it should not scare you when it comes. The notice is not something to lose sleep over. If you have received this notice and are wondering how to proceed, we’ll tell you how to handle it in the rest of this post.


What to do about IRS notice CP161

As always, carefully go through the notice you received to get the full story. Usually, the CP161 would explain what calculations the IRS made and how they arrived at the amount die.

Look into the calculations and make a comparison of it with your tax return. You can also check the list of payments the IRS applied to your account to see if any payment was omitted.

You have to do all of this fast because, when you receive an IRS notice cp161, you have just 10days to respond to it appropriately.

The IRS can make mistakes, so if you think there is an issue and they’re wrong, don’t be scared to seek clarity, they probably are. Contact the IRS and table your concerns. Ensure you have all the necessary documents (such as canceled checks, amended returns, etc.) as proof before calling and getting in touch with the IRS.

In the case that the IRS is right and the mistake was from you, all you need to do is pay the amount due. Payment options are available for people who can not make full payment at once. All you have to do is speak with a qualified tax professional to know more about what options are the best for you.

It is important to pay on time, or at least, contact the IRS before 10days elapse to notify them of your situation because, once the deadline passes, interest and penalties will accrue. Furthermore, the IRS may escalate the situation and it may become bigger than you thought.

If you still do not know how to respond to the notice cp161 or you do not want to address it on your own, it is in your best interest to get a professional on board to help you handle it. You can contact us at 888-585-8629 to get assistance.

It is pertinent to have appropriate representation when handling situations like this, as nonchalance on your part could lead to some serious consequences.


How to pay CP161 Online

If you agree with the IRS cp161 notice and you have the money to pay the balance, it’s best you do so before interests and penalties begin to accrue.

You can pay cp161 online by going to the IRS website and the case will be closed immediately they’re able to process the payment. This is the fastest way to sort this issue out.

You should know that tax situations are usually as complex and unique as the individuals involved. You do not have to stress over your tax situation and lose sleep over it. We have professionals who can help you deal with any IRS notice you receive. Call us today.


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Internet subscribers, users, and online readers are advised not to act upon this information without seeking the service of a professional accountant. Any U.S. federal tax advice contained in this website is not intended to be used for the purpose of avoiding penalties, of any kind, under U.S. federal tax laws.