IRS notice
IRS Notice CP503: Second Reminder of an Unpaid Balance
The second reminder about an unpaid balance; the IRS still hasn't heard from you and a lien filing is now possible.
Reply by the date on the notice
The due date printed on the CP503: paying in full by then avoids further penalty and interest on the balance shown.
A CP503 is the IRS's second reminder that a balance on one of your tax accounts is still unpaid and that it has not heard from you about earlier notices. Pay the balance by the due date, set up a payment arrangement, or call the IRS now if you disagree; the next notice is usually CP504, a notice of intent to levy.
What this notice is telling you
- At least two earlier notices about this balance, typically a CP14 and a CP501, have gone unpaid or unanswered.
- The amount now includes additional penalties and interest since the earlier notices.
- If you don't pay, make arrangements or call, the IRS says it may file a Notice of Federal Tax Lien if it hasn't already.
- You can still ask for a Collection Appeals Program appeal before collection action, following the instructions on the notice.
- If you already fixed the problem, the IRS still wants a call so your account reflects it.
What to do
Read the billing details
Confirm the tax year, form and amount. If the CP503 covers more than one year, note each period separately.
Decide on full payment or a plan today
Pay in full by the due date, or pay what you can and apply online for a payment plan or mail Form 9465. Individuals who owe $50,000 or less may qualify for the IRS's Simple Payment Plan.
Call even if you already acted
If you paid, filed an amended return or set up a plan after the notice was printed, call the number on the CP503 so the IRS updates your account and the notices stop.
Raise a disagreement now, not later
Call right away to talk to a customer service representative. If that does not resolve it, the notice explains how to request a Collection Appeals Program appeal before collection action.
Gather your income and expense figures
If paying is the problem, the IRS may ask about your monthly income, expenses and assets before agreeing to a plan or a temporary hold on collection.
What changes at the CP503 stage
The CP503 is the last of the reminder notices. The IRS calls it your second reminder, and the warning is sharper: if you do not pay, make arrangements or call, it may file a Notice of Federal Tax Lien, a public notice to creditors that can affect your ability to get credit. The notice after this one, CP504, is a formal notice of intent to levy.
| Notice | What it does |
|---|---|
| CP14 | First bill for the balance on a filed return. |
| CP501 | First reminder that the balance is unpaid. |
| CP503 | Second reminder; lien filing possible if you don't respond. |
| CP504 | Notice of intent to levy; state tax refund can be levied. |
If you disagree with the balance
Most disputes at this stage are about credits: a payment applied to the wrong year, withholding that was left off the return, or an estimated payment that was missed. Have the proof in hand before you call. If the balance comes from an error on your own return, file Form 1040-X and tell the IRS you have done so. If you want to challenge the collection itself, the Collection Appeals Program lets you appeal before collection action starts; follow the instructions printed on your notice.
If you do nothing
Expect a CP504 next. Once that notice is issued, the IRS can levy your state tax refund, and the late-payment penalty rate can increase. Every week the balance sits, interest is added. Dealing with it at CP503 still costs less than dealing with it after a levy.
Where this notice sits
The usual order. Not every account gets every notice, and some steps can be skipped.
Want a CPA to deal with it?
Bring the notice to a free consultation, in person on James Island or by video. We read it with you, tell you what it means for your account and, if you want us to, take over the response once you sign Form 2848.
IRS & SCDOR letters — Find your notice number below, see what it means and which date matters, then let a licensed CPA deal with the IRS or SCDOR on your behalf.
Sources
By Haigler CPA Group. Updated . Notices are revised from time to time, so go by the wording and dates on your own notice. The information on this site is general in nature and is not tax, legal, or accounting advice for your situation. Tax law changes and the right answer depends on facts we would need to review with you. Please speak with a qualified professional before acting on anything you read here.
Questions about CP503
Has the IRS already filed a lien if I got a CP503?
Not necessarily. The IRS says it may file a Notice of Federal Tax Lien if you don't pay, make arrangements or call, and only if it hasn't already. Your account transcript or a call to the number on the notice will tell you whether one has been filed.
What is the Collection Appeals Program?
It is an IRS appeal process for collection actions, handled by the Independent Office of Appeals. The CP503 page says you may request a CAP appeal before collection action occurs, following the instructions on the notice.
I set up a payment plan last week. Why did I get a CP503?
Notices are printed in advance and can cross with your arrangements. Call the number on the notice so the IRS confirms the plan is on your account.
Can the IRS take money from my bank account after a CP503?
The CP503 itself is a reminder, not a levy notice. A bank or wage levy generally requires a notice of intent to levy and, in most cases, a notice of your right to a Collection Due Process hearing first.
Other notices
- CP521: Monthly payment plan reminderA reminder that your monthly IRS payment plan installment is due by the date shown, with the amount and how to pay it.
- CP523: Intent to terminate your installment agreementYou defaulted on your IRS installment agreement; the IRS intends to terminate it and levy wages or bank accounts unless you act.
- IRS notice lookupEvery IRS notice carries a code. Find yours below to see what it generally means, which date matters, and what to do before that date passes.
Talk to a tax expert
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