Quick summary

An IRS Balance Due Notice explains an amount the IRS says you owe and gives instructions for payment or dispute. Notices come with a notice ID (for example, CP14, CP501, CP14A), the tax year affected, a due date, and a breakdown of tax, penalties, and interest. Treat the notice as time-sensitive: respond or make a payment within the timeline shown to avoid added penalties or collection action.

Why this matters now

Ignoring a balance due notice can amplify what you owe. The IRS charges interest on unpaid tax and typically adds a failure‑to‑pay penalty (usually 0.5% of the unpaid tax per month, up to 25% total). Interest compounds daily. Acting quickly preserves options — you can pay in full, set up an installment agreement, request penalty relief, or dispute the amount if it’s wrong.

Authoritative sources: IRS Letters & Notices (https://www.irs.gov/letters-notices/balance-due-notice) and IRS Payment Options (https://www.irs.gov/payments). Always check IRS pages for current interest rates and procedures.

How to read the notice — line by line

When you open a balance due notice, focus on these fields first:

  • Notice number / name (top-right or top-left). Example codes: CP14, CP501, CP14A, CP16. This tells you the type of notice and urgency. (See our guide to the specific notice CP14 for context: IRS Notice CP14: Balance Due).
  • Tax period (tax year). Confirms which return the IRS adjusted or reviewed.
  • Amount due. The total IRS claims you owe today — usually tax + penalties + interest.
  • Due date / response deadline. Most balance-due notices include a date by which you should pay or contact the IRS to avoid further action.
  • Explanation section. Brief narrative the IRS provides explaining why you owe — e.g., audit adjustment, math error, unpaid estimated taxes, or refund applied to prior year.
  • How to pay. Shows acceptable payment methods (online, phone, check, EFTPS, Direct Pay) and whether a payment plan might be available.
  • Contact instructions. A phone number, address for correspondence, and whether you should file a written protest.

Save the notice and work from a scanned copy. Don’t throw it away.

Immediate steps to take (first 48–72 hours)

  1. Pause and gather documents. Find your tax return for the year listed, W-2s, 1099s, receipts, and any estimates or payment records.
  2. Confirm the notice is real. IRS scams exist. If the IRS mailed it, you should be able to verify the notice by signing in to your IRS account at “View Your Account” (https://www.irs.gov/payments/view-your-tax-account) or calling the number on the notice. Do not call numbers in suspicious emails; use IRS.gov to find official contacts.
  3. Check for math or identity errors. Compare the IRS figures to your return and bank records. Simple mistakes — like a missing estimated payment — are common.
  4. Note the deadline on the notice. Many IRS notices provide 30 days to respond. Missing the deadline often increases penalties.

If you agree with the amount

Options:

  • Pay in full. Use IRS Direct Pay (no fee), the Electronic Federal Tax Payment System (EFTPS), or pay by check using the payment voucher in the notice. Paying in full stops further late interest accrual on the balance.
  • Pay by card. You can use a credit or debit card through IRS-approved processors (fees apply).
  • Set up an installment agreement. If you cannot pay the full amount, apply for a monthly payment plan. Small balances may qualify for a simplified, faster approval process — see our article on streamlined installment agreements: How Streamlined Installment Agreements Work for Small Balances. The IRS also offers Online Payment Agreements (apply at IRS.gov).

Tip from my practice: If a client’s balance is manageable, I often recommend paying what you can immediately and requesting an installment plan for the remainder. Partial payment reduces penalties and interest.

If you disagree with the amount

  1. Don’t ignore the notice. Even if you dispute it, you still must respond by the deadline.
  2. Gather supporting records: copies of the filed return, receipts, employer statements, bank statements, and proof of earlier payments.
  3. Follow the notice’s dispute instructions. Some notices instruct you to call; many require a written response with copies of documents. Mail copies — never originals — and include a cover letter that references the notice number, tax year, and why you believe the IRS is incorrect.

Sample dispute cover letter (short):

  • Your name and taxpayer ID (SSN or EIN, masked when possible)
  • Notice number and date
  • Tax year in question
  • Brief explanation of the disagreement
  • List of attached documents

Keep copies of everything and send by certified mail, return receipt requested, if you mail a written dispute.

Documentation to collect

  • Copy of the tax return for the year in question
  • Proof of payments (bank statements, EFTPS or Direct Pay confirmations)
  • Forms W-2, 1099s, K-1s, or other income docs
  • Receipts for deductible expenses you claimed
  • Correspondence from third parties that support your position

Relief options the IRS may offer

  • Installment agreement (monthly payments). Apply online or by Form 9465.
  • Offer in Compromise (OIC) if you can’t pay in full and meet strict eligibility rules (see IRS Offer in Compromise page).
  • Currently Not Collectible (CNC) status if paying would create financial hardship.
  • First-Time Penalty Abatement (FTA) for taxpayers with a clean compliance history. The IRS may remove certain penalties if you qualify.

Reference IRS resources: Offers in Compromise and Online Payment Agreements on IRS.gov.

Timeline and follow-up

  • Respond by the notice deadline. If you mail documents, track delivery.
  • If you call the IRS, document the representative’s name, badge number, and the date/time of the call. Confirm any agreements in writing.
  • After you resolve the issue, request a written confirmation and check your IRS online account to confirm the balance and payment history are updated.

When to get professional help

Hire a tax professional if:

  • The IRS proposes a large balance or lien.
  • You need an Offer in Compromise or CNC status.
  • You’re being assessed penalties that you don’t understand or that seem incorrect.
  • You receive threats of levy or levy notices (these require immediate attention).

In my 15+ years advising clients, taxpayers who bring organized documentation to a practitioner resolve disputes faster and often lower penalties.

Avoiding common mistakes

  • Don’t toss the notice. It’s proof of IRS action and includes response instructions.
  • Don’t assume the IRS will come back later; interest and penalties grow.
  • Don’t call third-party services that promise to make IRS notices disappear for an upfront fee without verifying legitimacy.

Useful internal resources

Closing checklist

  1. Verify notice authenticity via IRS.gov.
  2. Match IRS numbers to your records.
  3. Pay what you can and/or request a payment plan.
  4. Dispute errors in writing with supporting documents.
  5. Get professional help if the liability is large or complex.

Professional disclaimer: This article is educational and does not replace personalized tax advice. For help tailored to your situation, consult a licensed tax professional or the IRS (https://www.irs.gov).

Authoritative sources consulted: IRS Letters & Notices — Balance Due (https://www.irs.gov/letters-notices/balance-due-notice); IRS Payments and Online Payment Agreement pages (https://www.irs.gov/payments; https://www.irs.gov/payments/online-payment-agreement-application).