Ask Maxi · IRS letters
I got a CP161 from the IRS. What does it mean?
A CP161 is a notice to a business that it has an unpaid balance on a business tax account, such as a payroll or business income tax return.
It shows how the amount was figured and lists the payments the IRS has applied. Interest stops only if the full balance is paid by the due date, and late-payment or failure-to-deposit penalties can apply.
What to do:
- Compare the notice with the return it refers to and your payment records.
- Check that every payment you made, including payroll tax deposits, shows up on the list.
- If you disagree, call the number on the notice within 10 days of the notice date, with records such as canceled checks or bank confirmations ready.
- If it is right, pay by the date on the notice. If you cannot pay in full, ask about a payment plan.
Payroll tax balances deserve extra attention. The IRS can hold the people responsible for paying them personally liable for the withheld portion, so they should never sit at the bottom of the pile.
This is often a bookkeeping problem before it is a tax problem, like a deposit applied to the wrong quarter. That is exactly the kind of thing we untangle.
Send us a photo of the first page of the notice. We will tell you what it means for you and what to do next.
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