The first line of IRS Notice CP501 states, "You have unpaid taxes for [year]". Notice CP501 is a "first" reminder about past due taxes. The IRS cannot seize your wages or property yet so don't worry. The situation is not urgent but should be corrected immediately. There is also a Notice CP501H, concerning Health Care Tax liabilities, as well as Notice CP501K. But, they all warn you to pay your taxes.
What to do about Notice CP501
If you do nothing, (in about 2-3 months) the IRS will send you a Notice CP503. In about another 4-5 months the IRS will send you the more dangerous final Notice of Intent to Levy (CP504).
Don't call the IRS until you get legal advice. There may be several different IRS processes involved which require different strategies. Don't be rash. Do some investigation. You must carefully prepare your case prior to any IRS contact.
If you owe a small amount to the IRS simply complete Form 9465. Divide the amount you owe by 72 months (the length of bankruptcy) & that amount will be your monthly payment. Thereafter, they will send you a Letter 2271C verifying the installment agreement. After that, you will receive a Notice CP521 every month.
But if you can't pay, the IRS will want you to complete Form 433-A or Form 433F to disclose your income & assets. Either one is acceptable for the IRS (not both). These forms must be completed in the manner approved by the IRS or you will be rejected & the IRS will enforce collection. Realistically, no one but you can prepare these forms because you have access to all the information.
The IRS will ask for a substantial amount of evidence from you so you need Tax Attorney guidance in the process. Our TaxHelp Webinars teach you the tricks & traps of preparing these forms.
Also, in anticipation of a tax attorney consultation please follow the Prep Steps for IRS Notice CP501. These Steps show you how to prepare for the IRS!