IRS Notice CP71H is the Annual Reminder of the Shared Responsibility Payment (SRP) the IRS sends when you still owe the “Obamacare penalty” for not having minimum essential health insurance coverage in one or more years from 2014–2018.

A few quick points:

• The notice is tax-year specific – if you owe SRP for multiple years, you can receive multiple CP71H notices.
• The IRS is required to send an annual reminder under Internal Revenue Code § 7524, which tells the IRS to notify taxpayers at least once a year if they have a delinquent tax account.
• Even though the federal individual mandate penalty was reduced to $0 starting in 2019, balances from prior years are still collectible until the 10-year collection statute expires.

Think of CP71H as the IRS saying: “You still owe this health insurance penalty for [year]. Here’s the updated balance and how to pay.”

IRS Notice CP71H at a Glance

• Letter type: Annual reminder to individual
• Generated by: IRS Service Center
• Balance type: Shared Responsibility Payment (SRP) for 2014–2018
• Preceded by: Original tax return showing SRP or prior SRP notices
• Recommended action: Pay the balance, or arrange a payment / resolution with the IRS

CP71H Explained, Part by Part

Part 1 – Amount Due and Billing Summary

On page one, the notice:

• Shows which tax year’s SRP this CP71H covers (for example, “Tax year 2016”).
• Lists the current amount due, including any interest that has accrued.
• Gives you a due date for payment.

Important nuance:
The IRS cannot add the usual late-payment penalty to SRP balances. So the breakdown will typically show tax + interest, but no failure-to-pay penalty line the way an income-tax notice would.

Part 2 – Payment Coupon

Next, the CP71H includes a payment voucher:

• You can mail a check or money order with the coupon to the address on the notice.
• You’ll typically be asked to write your SSN, tax year, and “SRP” or “Form 1040” on the memo line so the payment is applied correctly.

If you owe SRP for several years and cannot pay all of them at once, it can be strategic to decide which years to pay off first. The IRS isn’t going to coach you on that; they just want everything paid.

This is where working with a CPA firm can help you prioritize.

Part 3 – What the IRS Wants You to Do Now with IRS Notice CP71H

In the “What you need to do immediately” section, the IRS basically says:

1. Pay the balance in full by the due date,
2. Or pay what you can and contact them to explore payment options.

They’ll guide you back to either:

• The payment coupon, or
• Online payment options at IRS.gov (Direct Pay, debit/credit card, or EFTPS).

If you’re potentially eligible for hardship-based relief or another tax resolution option, you don’t necessarily have to pay everything at once—but you also shouldn’t ignore the notice.

Part 4 – What You Need to Know About the SRP

In this section, the CP71H explains why you’re receiving the notice:

• For the year listed, the IRS believes you did not have minimum essential health coverage for yourself and/or your dependents.
• A Shared Responsibility Payment was calculated and assessed on your original return (or by the IRS through a substitute assessment).

Here’s the key difference between SRP and “normal” tax debt:

For SRP balances, the IRS cannot:

• File a Notice of Federal Tax Lien against you solely for SRP,
• Levy (seize) your wages or bank accounts to collect SRP, or
• Charge the failure-to-pay penalty.

However, the IRS can:

• Charge interest on the unpaid SRP, and
• Offset future refunds (apply them to your SRP balance instead of sending you a check).

So while SRP isn’t as aggressive as other IRS debts, it doesn’t disappear just because they can’t levy you.

Part 5 – Payment Options and Tax Relief for IRS Notice CP71H

The notice then outlines your payment and resolution choices. Broadly, these include:

1. Full Payment

If you can afford to:

• Paying the balance in full is the fastest way to stop additional interest from accruing and clean up the year.
• You can pay by mail with the voucher or online through IRS Direct Pay or EFTPS.

2. Installment Agreement

If you can’t pay in full but can afford a monthly amount:

• An installment agreement allows you to pay over time.
• Interest continues to accrue, but you avoid default and demonstrate good-faith compliance.

3. Offer in Compromise (OIC)

In some situations, SRP balances may be included in a broader offer in compromise:

• An OIC is an agreement where the IRS settles your total eligible tax debt for less than the full amount owed.
• Whether SRP is included typically depends on how the liabilities are coded in your IRS account and what periods your OIC covers.

4. Currently Not Collectible (CNC) / Hardship Status

If paying anything meaningful right now would cause serious hardship:

• You may qualify for currently not collectible (CNC) status.
• CNC pauses active collection efforts on qualifying debts and signals to the IRS that trying to collect right now would push you below basic living standards.

Even though the IRS can’t levy exclusively for SRP, CNC status may still be relevant if you also owe other types of tax.

Part 6 – If the IRS Doesn’t Hear From You About IRS Notice CP71H

If you ignore the CP71H:

• The IRS will keep sending annual reminders as long as the SRP balance exists.
• Your SRP debt will remain on your IRS account until either:
  • It’s paid, or
  • The 10-year collection statute for that year expires.

In the meantime, the IRS can intercept refunds you might otherwise receive and apply them to the SRP.

Ignoring the notice doesn’t make it go away; it just gives the IRS more time to apply interest and snag future refunds.

Part 7 – Additional Information

Toward the end of the notice, the IRS typically lists:

• A link to its official CP71H explanation page,
• Pages for forms and publications,
• Links to healthcare coverage information (such as Healthcare.gov or state marketplaces), and
• Contact information and mailing addresses.

What To Do If You Receive IRS Notice CP71H

1. Confirm You Actually Owe the SRP

First, slow down and verify:

• Did you truly lack qualifying health coverage for that year?
• Did you already pay the SRP when you filed, but the IRS hasn’t credited it correctly?
• Is the year and amount on the notice consistent with your filed return?

The IRS misapplies payments and mis-codes accounts more often than you’d think. If something doesn’t look right, it’s worth investigating before you send more money.

2. If You Can Pay It Off, Do So Strategically

If you’re financially able:

• Paying the SRP in full for that year stops additional interest and cleans up the account.
• If you owe SRP for multiple years, a CPA can help you prioritize which years to pay first based on statute dates and your overall tax picture.

3. If You Can’t Pay in Full, Negotiate

If full payment isn’t realistic:

You may be able to:

• Set up an installment agreement that fits your budget,
• Work toward CNC hardship status if your finances are truly underwater, or
• Explore whether your SRP balance can be included in a broader resolution (like an offer in compromise) if you also owe other taxes.

The key is to engage early—before additional notices start stacking up and refunds start disappearing.

Why Work With a CPA Firm Instead of a “Tax Relief” Mill?

If all you have is a single small SRP balance, you might reasonably handle it yourself. But typically you need a CPA Firm.

But many taxpayers who receive CP71H:

• Also owe other back taxes,
• Have multiple years of notices (CP71H, CP14, CP504, etc.), or
• Are already under IRS scrutiny for late filings or balances due.

That’s where the choice of advisor matters.

The Problem With Many National “Tax Relief” Companies

You’ve probably seen the ads:

“Settle with the IRS for pennies on the dollar!”

These firms often:

• Spend heavily on sales and call centers, not licensed professionals,
• Quote large upfront retainers before they’ve truly reviewed your case, and
• Push one-size-fits-all solutions (usually an OIC) even if you clearly don’t qualify.

In the end, you may pay thousands only to be told “you didn’t qualify”—for something a good CPA could have ruled out in an hour.

How Corridor Consulting CPAs Can Help

At Corridor Consulting, we take a different approach:

• We’re a CPA firm, not a sales boiler room.
• We look at your entire tax picture—SRP, income tax, penalties, unfiled returns, business issues—not just one notice.
• We help you choose from realistic, IRS-compliant options:
  • Cleaning up missing returns
  • Prioritizing which balances to pay
  • Setting up affordable payment plans
  • Evaluating hardship or offer-in-compromise potential, when appropriate

And because we also handle ongoing tax planning and compliance, our goal isn’t just to “make the notice go away.” It’s to keep you from ending up back in the same situation a year or two later.

If you’ve received a CP71H—especially along with other IRS notices—and you’re not sure what to do next, it’s usually much cheaper (and safer) to talk with a local CPA firm first.

When to Call Corridor Consulting About a CP71H Notice

You should reach out if:

• You’ve received multiple CP71H notices and other IRS letters.
• You’re not sure whether the IRS’s SRP calculations are correct.
• You owe other back taxes in addition to SRP.
• You’re worried about refunds being intercepted or your overall IRS exposure.

We’ll review your notices, transcripts, and prior returns, and help you build a realistic plan to:

1. Confirm what you actually owe,
2. Clean up past-due filings, and
3. Put a sustainable resolution in place.

Helpful IRS Resources

• IRS – Understanding Your CP71H Notice (Annual Reminder of Balance Due)
• IRS – Individual Shared Responsibility Provision
• IRS – Payment Options: Pay Your Tax Bill
• IRS – Offer in Compromise Program
• IRS – Currently Not Collectible / Temporary Delay in Collection