IRS notice
IRS Notice CP504: Notice of Intent to Levy Explained
The IRS's notice of intent to levy: your state refund can be taken after 30 days, and stronger collection steps can follow.
Act now
If the IRS does not receive the amount due within 30 days of the notice date, it can levy your state tax refund; the IRS asks you to pay immediately.
A CP504 is the IRS's notice of intent to levy under Internal Revenue Code section 6331(d), sent because a balance is still unpaid after earlier notices. Pay immediately, or pay what you can and set up a payment arrangement; if the amount is wrong, call the number on the notice right away.
What this notice is telling you
- This is the formal notice the law requires at least 30 days before most levies. The Taxpayer Advocate Service calls it the Final Notice in the reminder series.
- After 30 days the IRS can take your state tax refund without first offering a Collection Due Process hearing.
- For most other property, such as wages and bank accounts, the IRS generally sends a separate notice of your right to a Collection Due Process hearing before levying, unless you have already received one.
- A federal tax lien has already arisen on the unpaid debt, and the IRS can file a public Notice of Federal Tax Lien.
- The notice also warns that a seriously delinquent tax debt can lead to denial or revocation of a US passport.
What to do
Pay what you can now
Pay the full amount if possible. If not, pay part of it today; partial payment reduces the balance that interest and penalty are figured on.
Set up a payment plan
The IRS calls its Online Payment Agreement tool the fastest route to approval, or you can call the number on the notice. Individuals who owe $50,000 or less may qualify for the Simple Payment Plan.
Call if the balance is wrong or already handled
Use the number on the notice. If you already paid or set up a plan, call anyway so your account shows it and the levy process stops.
Appeal the intended levy if you need to
You can request a Collection Appeals Program appeal before collection action by calling the number for appeals or sending Form 9423 to the address on the notice.
Check whether the debt touches your passport
If your total debt is large, read the passport section of the notice and IRS.gov/passports, and resolve the balance before planning international travel.
What the IRS can do after a CP504
| Action | When it can happen |
|---|---|
| Levy on your state tax refund | If the amount due is not received within 30 days of the notice date. No pre-levy hearing is required for this type of levy. |
| Disqualified employment tax levy or federal contractor levy | These special levies can also follow without a prior hearing, as explained in Publication 594. |
| Levy on wages, bank accounts, retirement accounts, Social Security or other property | Generally only after a separate notice giving you the right to a Collection Due Process hearing, unless you have already received one. |
| Filing a Notice of Federal Tax Lien | At any time, if one has not already been filed. It makes it harder to sell or borrow against property. |
The penalty goes up after this notice
Under section 6651(d) of the tax code, the failure-to-pay penalty rises from half a percent to 1 percent per month starting 10 days after a notice of intent to levy is given, if the balance is still unpaid. The 25 percent overall cap on the penalty still applies. This is one concrete cost of letting a CP504 sit.
CAP appeal versus a Collection Due Process hearing
The CP504 does not itself give Collection Due Process rights. What it offers is the Collection Appeals Program, an appeal you request by phone or on Form 9423 before collection action takes place. The Taxpayer Advocate Service notes that CAP is used when a Collection Due Process hearing is not offered. The Collection Due Process hearing itself comes with a later notice, such as CP90 or LT11, which has its own strict deadline.
If you ignore the CP504
The IRS says it will begin searching for other assets to levy. The usual next step is a notice of intent to levy with your right to a hearing (CP90, LT11 or Letter 1058). Once that notice's hearing window passes, wages, bank accounts and other property are at risk.
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 CP504
Can the IRS take my paycheck right after a CP504?
Generally not yet. For wages and bank accounts, the IRS normally must first send a notice of your right to a Collection Due Process hearing, unless you already received one for that tax period. Your state tax refund is the exception and can be levied 30 days after the CP504.
Does a payment plan stop the levy threatened in a CP504?
Setting up an installment agreement is one of the ways the notice tells you to resolve the balance before further collection. Call or apply online, and keep the confirmation.
Why did my balance jump after the CP504?
Interest keeps accruing, and the failure-to-pay penalty rate doubles to 1 percent a month starting 10 days after a notice of intent to levy if the balance is still unpaid.
Is CP504 the last notice before the IRS seizes property?
For most property, no. The IRS generally sends one more notice offering a Collection Due Process hearing before levying wages, bank accounts or other assets. Treat the CP504 as the last comfortable point to act.
Other notices
- CP91: Intent to levy up to 15% of Social Security benefitsThe IRS intends to take up to 15% of each Social Security payment until an unpaid tax balance is paid.
- 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
Tell us what you are dealing with and we will tell you how we would handle it.