What is a CP504 Notice?
What is an IRS CP504 Notice and What Should You Do?
If you’ve received a CP504 notice from the IRS, don’t ignore it! This is an urgent letter indicating that you owe back taxes and that the IRS is preparing to take collection action. Understanding what this notice means and how to respond can help you avoid serious financial consequences.
The CP504 is a final notice before the IRS begins aggressive collection efforts. It informs you that if you do not pay your outstanding balance, the IRS may levy your state tax refund and take further action, such as seizing assets or garnishing wages.
Why Did You Receive a CP504 Notice?
The IRS issues this notice when:
You have an unpaid tax balance.
Previous IRS notices demanding payment have been ignored.
The IRS is preparing to levy your state tax refund and potentially take additional enforcement measures.
What Happens If You Ignore It?
Failing to act on a CP504 notice can lead to severe consequences, including:
Levy on state tax refunds.
Additional penalties and interest accruing on your tax debt.
Possible wage garnishments, bank levies, or asset seizures.
How to Respond to a CP504 Notice
Review the Notice: Check the amount due and compare it with your tax records to ensure accuracy.
Pay the Balance: The easiest way to stop IRS collection efforts is to pay the amount owed in full.
Set Up a Payment Plan: If you can’t pay in full, contact the IRS to arrange an installment agreement.
Seek Professional Help: If you disagree with the notice or can’t afford to pay, a tax professional can help you explore options like an Offer in Compromise or hardship status.
Final Thoughts
A CP504 notice is a serious warning that should not be ignored. Taking immediate action can prevent escalating IRS enforcement and help you resolve your tax debt efficiently.
Need help dealing with a CP504 notice? Contact us today for expert tax resolution assistance!