diff --git a/crates/ledger-gui/tests/invoices.rs b/crates/ledger-gui/tests/invoices.rs
index f51ad3c..d0d1b3f 100644
--- a/crates/ledger-gui/tests/invoices.rs
+++ b/crates/ledger-gui/tests/invoices.rs
@@ -208,3 +208,58 @@ fn books_without_documents_show_no_overview_tiles_for_them() {
     shot(&mut h, "receivables-empty");
     assert!(h.query_by_label("No invoices").is_some());
 }
+
+/// A written-off invoice (plan P4b S7): $500 issued, written off whole for
+/// a bad debt with its evidence, so it reads Written off owing nothing.
+fn write_off_books(dir: &TempDir) -> (u64, u64) {
+    let mut s = Store::create(&dir.0.join("books-data"), Currency::USD).unwrap();
+    s.add_account("1000", "Checking", AccountType::Asset, None, false)
+        .unwrap();
+    s.add_account("3000", "Capital", AccountType::Equity, None, false)
+        .unwrap();
+    let client = s.add_customer("Harbor Client").unwrap();
+    let inv = s
+        .create_invoice(
+            client,
+            d(2026, 2, 1),
+            d(2026, 3, 1),
+            vec![line("Consulting", 50_000)],
+        )
+        .unwrap();
+    let (entry, _) = s
+        .write_off_invoice(
+            inv,
+            d(2026, 3, 10),
+            Decimal::new(50_000, 2),
+            "collection exhausted",
+            Some(ledger_store::WriteOffEvidence::File {
+                file_name: "collection-letter.pdf",
+                mime_type: "application/pdf",
+                bytes: b"%PDF-1.4\nFinal demand\n%%EOF\n",
+                description: Some("Collection attempts"),
+            }),
+        )
+        .unwrap();
+    (inv, entry)
+}
+
+/// The write-off is on its invoice's timeline, reads "Written off", and
+/// opens its entry.
+#[test]
+fn a_write_off_shows_on_the_timeline() {
+    let dir = TempDir::new("write-off");
+    let (inv, entry) = write_off_books(&dir);
+    let mut h = open(&dir, Route::Invoice(inv));
+    shot(&mut h, "invoice-written-off");
+    assert!(
+        h.query_by_label_contains("Written off, entry #")
+            .is_some(),
+        "the timeline shows the write-off"
+    );
+    // The status chip reads its label ("Written off"), not "late".
+    assert!(h.query_by_label("Written off").is_some());
+    h.get_by_label_contains(&format!("Written off, entry #{entry},"))
+        .click();
+    h.run_steps(2);
+    assert_eq!(h.state_mut().route(), &Route::Entry(entry));
+}
diff --git a/crates/ledger-gui/tests/view_model.rs b/crates/ledger-gui/tests/view_model.rs
index f184b07..0781605 100644
--- a/crates/ledger-gui/tests/view_model.rs
+++ b/crates/ledger-gui/tests/view_model.rs
@@ -831,3 +831,93 @@ fn all_dates_holds_an_entry_dated_after_today() {
     assert_eq!(RegisterRange::All.dates(&b), (first, later));
     assert_eq!(Range::AllTime.dates(&b), (first, later));
 }
+
+/// A write-off this calendar year is one Needs-attention item, "Write-off
+/// awaiting the CPA's note", through the viewer and through the server's
+/// own read of the books alike (plan P4b S7; the one function in
+/// ledger-package::attention).
+#[test]
+fn a_write_off_is_flagged_for_the_cpa() {
+    let d = dir("write-off");
+    let today = NaiveDate::from_ymd_opt(2026, 6, 30).unwrap();
+    let mut s = Store::create(&d.join("books-data"), Currency::USD).unwrap();
+    s.add_account("1000", "Checking", AccountType::Asset, None, false)
+        .unwrap();
+    let cust = s.add_customer("Ridgeway Co").unwrap();
+    let inv = s
+        .create_invoice(
+            cust,
+            NaiveDate::from_ymd_opt(2026, 2, 1).unwrap(),
+            NaiveDate::from_ymd_opt(2026, 3, 1).unwrap(),
+            vec![DocumentLine {
+                description: "Survey".into(),
+                amount: Decimal::new(10_000, 2),
+                class_id: None,
+                account: None,
+                quantity: None,
+                unit_price: None,
+            }],
+        )
+        .unwrap();
+    let (entry, _) = s
+        .write_off_invoice(
+            inv,
+            NaiveDate::from_ymd_opt(2026, 3, 15).unwrap(),
+            Decimal::new(10_000, 2),
+            "collection exhausted",
+            Some(ledger_store::WriteOffEvidence::File {
+                file_name: "collection-letter.pdf",
+                mime_type: "application/pdf",
+                bytes: b"%PDF-1.4\nFinal demand\n%%EOF\n",
+                description: Some("Collection attempts"),
+            }),
+        )
+        .unwrap();
+    // The server's list: the same function, over the Store.
+    let settings = s.ledger().settings();
+    let company = settings.company("USD");
+    let (cash, financing, investing) = (
+        settings.cash_accounts(),
+        settings.financing_accounts(),
+        settings.investing_accounts(),
+    );
+    let server = ledger_package::find(
+        &s,
+        today,
+        &ledger_package::Settings {
+            company: &company,
+            cash_accounts: &cash,
+            financing_accounts: &financing,
+            investing_accounts: &investing,
+        },
+    );
+    let want = format!("Write-off awaiting the CPA's note: Invoice {inv}");
+    let said = server
+        .iter()
+        .find(|a| a.title == want)
+        .unwrap_or_else(|| panic!("the server's list has no {want:?}: {:?}", server.iter().map(|a| &a.title).collect::<Vec<_>>()));
+    assert_eq!(said.severity, ledger_package::Severity::Todo);
+    assert!(said.prompt.contains("wanderbooks"), "{}", said.prompt);
+    assert!(said.detail.contains("100.00"), "{}", said.detail);
+    drop(s);
+    // The viewer's list, over its snapshot, has the same item.
+    let books = data::load_once(&Source {
+        data_dir: d.join("books-data"),
+        today: Some(today),
+    })
+    .unwrap();
+    let shown = books
+        .attention
+        .iter()
+        .find(|a| a.title == want)
+        .unwrap_or_else(|| panic!("the viewer shows no {want:?}: {:?}", books.attention.iter().map(|a| &a.title).collect::<Vec<_>>()));
+    assert_eq!(shown.target, Some(ledger_gui::nav::Route::Documents));
+    // The viewer reads the same figures from the journal it replayed.
+    let st = books
+        .ledger
+        .invoice_state(inv, today)
+        .unwrap()
+        .unwrap();
+    assert_eq!(st.status, ledger_core::DocStatus::WrittenOff);
+    assert!(books.ledger.get_entry(entry).is_some());
+}
diff --git a/crates/ledger-mcp/handbook/invoices-and-bills.md b/crates/ledger-mcp/handbook/invoices-and-bills.md
new file mode 100644
index 0000000..9243419
--- /dev/null
+++ b/crates/ledger-mcp/handbook/invoices-and-bills.md
@@ -0,0 +1,81 @@
+# Invoices and bills
+
+An invoice is money owed to you (Accounts Receivable, 1200); a bill is money
+you owe (Accounts Payable, 2000). Each is a document whose figures come from
+the ledger lines tagged with it: what is paid, discounted, written off and
+still owed is read from those lines, never kept beside them, so a reversal,
+a void or a bounced payment is right by construction. `books.documents`
+lists them, `books.document` shows one with its timeline, and
+`books.control_check` proves the control accounts equal their documents.
+
+## Step 4: void, write off, or reverse
+
+One of these, and only one, fits what happened:
+
+- **Void it** (`books.void_document`) when the document should never have
+  existed: a duplicate, the wrong customer or vendor, a test entry. It is
+  reversed, keeps its id (and, once numbered, its number) and reads void;
+  nothing is deleted. Refused while a payment stands on it: reverse that
+  payment first, and the refusal names it. Use a void for a mistake, never
+  for an invoice that was real.
+- **Write it off** (`books.write_off_invoice`) when the invoice was real
+  and the work or goods went out, but the customer will not or cannot pay.
+  That is a bad debt: the books post Dr Bad Debt Expense 6990 / Cr Accounts
+  Receivable for what will not be collected, and what it owes falls from
+  that day. The evidence of worthlessness — the collection letters, the
+  bankruptcy or liquidation notice, the collection agency's report — is
+  filed with the write-off in the same call (`upload_id`, or an
+  `existing_attachment_id` already filed), because a bad debt is deducted
+  on all the pertinent evidence (Treas. Reg. §1.166-2(a)). Write off all of
+  it, or part of it with `amount`: a partial write-off is deductible to the
+  extent charged off (Treas. Reg. §1.166-3(a)), and the rest stays owed and
+  in the aging. The books must be on the accrual basis: a cash-basis
+  company never counted the invoice as income, so there is no basis to
+  deduct (IRC §166; Treas. Reg. §1.166-1(e)), and the tool refuses.
+- **Reverse an entry** (`books.reverse_entry`) when a posted entry is
+  wrong: a payment against the wrong invoice, a wrong amount, a check that
+  bounced, a write-off made too soon. Posted is forever: the correction is
+  an opposite entry linked to the one it reverses, never an edit and never
+  a delete. Reversing a payment puts the invoice back to owing what it did;
+  reversing a write-off re-instates the debt.
+
+A bill is never written off: a vendor releases you with a vendor credit or
+by voiding its own invoice, and until then you owe it (ASC 405-20-40-1). If
+a vendor's bill was wrong, ask for a corrected bill or record a credit when
+one is built; void it only when it should never have been entered.
+
+## Recovering a debt written off
+
+- **The same tax year**: reverse the write-off — `books.reverse_entry` on
+  the write-off's entry. The invoice reopens, owing exactly what the
+  write-off took off; then record the payment with `books.receive_payment`
+  as usual. Nothing else is needed: within the year the deduction comes
+  back out, and the payment is a payment.
+- **A later tax year**: do not reverse the write-off. Record a plain entry
+  — `books.draft_entry`, `books.add_line` on each side, `books.post_entry`
+  — debiting the deposit account and crediting a "Bad debt recoveries"
+  revenue account (tax category other income), with a memo naming the
+  invoice. The invoice stays written off, and the recovery is income in the
+  year it arrives (IRC §111); the CPA sees it apart from the year's sales.
+
+Neither procedure invents a new kind of movement on the document: the books
+record what happened, and the invoice's timeline shows the write-off (and,
+if it was reversed, that it no longer stands).
+
+## What the CPA will check
+
+The agings tie to 1200 and 2000 at month and year end (they do by
+construction: the control check says so). Every write-off carries its
+reason and its evidence of collection efforts. Write-offs are not used in
+place of a credit memo for a valid invoice, and never to hide a mistake
+that a void would show. Whether a debt is worthless, and in which year, is
+a tax judgment that stays with the CPA: the books flag each write-off made
+this year in Needs attention, with the evidence beside it, until the year
+ends.
+
+## The evidence rule
+
+Every entry needs its receipt ({evidence_rule}). A document the books post
+themselves — an invoice, a bill, a payment, a write-off — carries its own:
+the issued copy, the vendor's bill, the payment's reference, the evidence of
+worthlessness. A reversal needs none of its own: its original carries it.
diff --git a/crates/ledger-mcp/src/handbook.rs b/crates/ledger-mcp/src/handbook.rs
index beb69b2..cb1849f 100644
--- a/crates/ledger-mcp/src/handbook.rs
+++ b/crates/ledger-mcp/src/handbook.rs
@@ -73,6 +73,13 @@ pub const SECTIONS: &[(&str, &str)] = &[
         "revenue-and-payouts",
         include_str!("../handbook/revenue-and-payouts.md"),
     ),
+    // S4.5 gives invoices and bills their first three and fifth steps; S7
+    // adds step 4 (void, write off or reverse) and the recovery
+    // procedures (plan 8.2).
+    (
+        "invoices-and-bills",
+        include_str!("../handbook/invoices-and-bills.md"),
+    ),
     ("projects", include_str!("../handbook/projects.md")),
     (
         "parties-and-tins",
diff --git a/crates/ledger-package/src/attention.rs b/crates/ledger-package/src/attention.rs
index ab7f33f..9a0463a 100644
--- a/crates/ledger-package/src/attention.rs
+++ b/crates/ledger-package/src/attention.rs
@@ -37,7 +37,10 @@
 //!      books.set_entry_instrument; a year whose worksheet can't be made
 //!      for want of named cash accounts while vendors were paid in it
 //!      (Todo); overdue bills, and overdue
-//!      invoices (Problem, one each, with the total); money owed to
+//!      invoices (Problem, one each, with the total); a written-off
+//!      invoice whose write-off is dated this calendar year and stands
+//!      (Todo, one per invoice, "Write-off awaiting the CPA's note",
+//!      its prompt naming books.document); money owed to
 //!      owners (Info, per account with a balance); the database differing
 //!      from the journal or unreadable, and damaged or missing stored
 //!      files (Problem); depreciation due through the last finished month
@@ -717,6 +720,63 @@ pub fn find_with(
         });
     }
 
+    // A write-off this year waits for the CPA's note: the deduction rests
+    // on evidence of worthlessness a human signs off, and §166's judgments
+    // stay with the CPA (plan P4b S7, 8.3.16; IRC §166(a); Treas. Reg.
+    // §1.166-2(a)). Listed until the year ends.
+    let mut written_off: Vec<(u64, Option<String>, NaiveDate, Decimal)> = Vec::new();
+    for inv in ledger.invoices() {
+        let doc = ledger_core::DocRef::Invoice(inv.id);
+        let state = ledger.invoice_state(inv.id, today).ok().flatten();
+        if state.map(|s| s.status) != Some(ledger_core::DocStatus::WrittenOff) {
+            continue;
+        }
+        let lines: Vec<ledger_core::DocLine> = ledger
+            .doc_lines(doc)
+            .into_iter()
+            .filter(|l| {
+                l.movement == ledger_core::Movement::WriteOff
+                    && l.date.year() == today.year()
+                    && ledger.stands_on(l.entry, today)
+            })
+            .collect();
+        let Some(last) = lines.last() else {
+            continue;
+        };
+        match lines
+            .iter()
+            .try_fold(Decimal::ZERO, |t, l| t.checked_sub(l.amount))
+        {
+            Some(amount) => written_off.push((inv.id, inv.number.clone(), last.date, amount)),
+            None => out.push(cant_compute(
+                format!("Invoice {}", inv.id),
+                &LedgerError::TooLargeToCompute("what was written off".into()),
+                Target::Documents,
+            )),
+        }
+    }
+    for (id, number, on, amount) in written_off {
+        let name = number.unwrap_or_else(|| format!("Invoice {id}"));
+        out.push(Attention {
+            severity: Severity::Todo,
+            kind: "write_off_note",
+            title: format!("Write-off awaiting the CPA's note: {name}"),
+            detail: format!(
+                "{} written off on {} (IRC §166; Treas. Reg. §1.166-2: the evidence of worthlessness is filed with the write-off).",
+                dollars(amount),
+                date(on)
+            ),
+            target: Target::Documents,
+            prompt: format!(
+                "In wanderbooks, show me invoice {id}'s write-off (books.document), with its reason and the evidence filed with it, and note it for the CPA at year end."
+            ),
+            tool: Some((
+                "books.document".into(),
+                serde_json::json!({ "ref": format!("invoice:{id}") }),
+            )),
+        });
+    }
+
     for a in ledger.chart().all().filter(|a| {
         a.account_type == AccountType::Liability && {
             let n = a.name.to_lowercase();