IRS CP504 Notice: Intent To Levy — What To Do Now

What Is An IRS CP504 Notice

An IRS CP504 is a Notice of Intent to Levy, meaning the IRS is informing you that it will seize your state tax refund, wages, bank accounts, or other property if you do not pay your unpaid tax balance or make payment arrangements immediately. According to the IRS, the CP504 is issued under Internal Revenue Code Section 6331(d) and represents the final automated balance due reminder before the agency begins active enforcement. If you have received this notice, the IRS has already sent prior correspondence about the same unpaid balance and has not received payment or a response.

The CP504 includes your Social Security number, the date of the notice, and the specific tax year and form the balance relates to. It breaks the total amount owed into original tax, assessed penalties, and accrued interest. The notice also provides payment instructions, explains your right to appeal under the Collection Appeals Program, and describes the consequences of not responding. For a broader overview of how all IRS notices work and what different notice types mean, our complete guide to IRS correspondence covers every category from adjustments to enforcement.

Where CP504 Falls In The IRS Collection Sequence

The CP504 is the fourth notice in a five-step collection sequence that the IRS follows when an individual taxpayer has an unpaid balance. Each notice in this sequence carries more urgency than the last, and the CP504 marks the transition point from automated reminders to active enforcement. According to the IRS, the standard progression works as follows.

1. CP14: the initial notice that your tax return has an unpaid balance. Taxpayers who want to understand this first notice in the collection sequence can review our full guide to the CP14 balance due letter.
2. CP501: a first reminder that the balance remains unpaid.
3. CP503: a second reminder with stronger language, noting that the IRS has still not received payment.
4. CP504: the Notice of Intent to Levy, warning that the IRS will begin seizing assets if you do not act.
5. LT11 or CP90: the Final Notice of Intent to Levy, which grants you the right to request a Collection Due Process hearing within 30 days before the IRS proceeds.

The critical difference between the CP504 and the notices that came before it is that the CP504 authorizes the IRS to levy your state income tax refund without further notice. The final notices that follow, LT11 and CP90, authorize the IRS to levy everything else, including wages, bank accounts, and personal property.

What The IRS Can Seize After A CP504 Notice

After sending a CP504, the IRS can immediately intercept your state income tax refund, and after issuing a subsequent final notice, it can seize virtually any other asset or income stream you have. According to the IRS, property subject to levy includes the following.

• State income tax refunds. According to the IRS, this is typically the first asset levied after a CP504 because the agency can intercept it without issuing an additional notice.
• Wages, salaries, and commissions. The IRS can direct your employer to withhold a portion of each paycheck until the debt is satisfied.
• Bank accounts. The IRS can freeze funds in your checking and savings accounts and seize the balance up to the total amount owed.
• Business assets. Equipment, inventory, and accounts receivable can all be seized to satisfy a business or individual tax debt.
• Personal property. According to the IRS, the agency can seize your vehicle, your home, and other real or personal property. The IRS is one of the few creditors authorized to take a personal residence despite state homestead protections.
• Social Security benefits. The IRS can levy up to 15 percent of your monthly Social Security payments.

In addition to levies, the IRS can file a Notice of Federal Tax Lien, which is a public claim against your current and future assets. According to the IRS, a lien can damage your credit, make it difficult to sell or refinance property, and establish the government's legal priority over other creditors. The FAST Act also authorizes the State Department to deny, revoke, or limit your passport if your tax debt meets the threshold for seriously delinquent tax debt.

How To Respond To An IRS CP504 Notice

Respond to a CP504 as quickly as possible, ideally well within the 30-day window the IRS provides before taking levy action. Your best course of action depends on whether you agree or disagree with the amount the notice says you owe.

If You Agree With The Amount Owed

According to the IRS, you have several options for resolving the balance.

1. Pay in full. The fastest way to stop collection activity is to pay the entire balance shown on the notice. You can pay online at IRS.gov, by phone, or by mailing a check with the payment voucher included in the notice.
2. Set up an installment agreement. If you cannot pay the full amount at once, you may qualify for a monthly IRS payment plan or installment agreement. Our step-by-step guide to setting up structured payments covers the application process, balance thresholds, and how interest is calculated on the remaining amount.
3. Submit an Offer in Compromise. If your financial situation makes it unlikely you can pay the full debt even with a payment plan, you may be able to settle for less than you owe through a formal Offer in Compromise.
4. Request Currently Not Collectible status. If you have no ability to pay anything toward the debt, the IRS may temporarily pause collection activity by placing your account in Currently Not Collectible status. This does not eliminate the debt, but it stops levies while you remain unable to pay.

Taxpayers facing significant financial hardship may also qualify for the IRS Fresh Start program, which expands access to installment agreements and eases qualification thresholds for eligible individuals and businesses.

If You Disagree With The Amount Owed

If you believe the balance on the CP504 is incorrect, call the toll-free number printed on the notice immediately. According to the IRS, you can also request an appeal under the Collection Appeals Program before collection action takes place by following the instructions included in the notice. If you have already paid the balance or set up an installment agreement, contact the IRS at the number on the notice to confirm that your account reflects the payment or arrangement.

For general guidance on responding to any IRS correspondence, including how to organize supporting documentation and meet response deadlines, our guide on what to do when you receive an IRS notice provides a step-by-step walkthrough of the full response process.

What Happens If You Ignore A CP504 Notice

Ignoring a CP504 causes the IRS to escalate to its final enforcement steps, beginning with the seizure of your state tax refund and progressing to levies on your wages, bank accounts, and personal property. According to the IRS, the next notice after the CP504 is typically the LT11 or Letter 1058, labeled "Final Notice of Intent to Levy and Notice of Your Right to a Hearing." This notice grants you the right to request a Collection Due Process hearing within 30 days, which is your last formal opportunity to challenge the proposed levy or present an alternative resolution before the IRS takes action.

If you do not respond to that final notice, the IRS can proceed with levying all available assets, filing a federal tax lien that becomes part of the public record and affects your credit, and, for balances meeting the seriously delinquent threshold, certifying your debt to the State Department for passport denial or revocation. Penalties and interest continue to accrue on the unpaid balance throughout this process, increasing the total amount owed with each month that passes.

Difference Between CP504 And CP504B

The CP504 is issued to individual taxpayers for unpaid personal income tax, while the CP504B is issued to businesses for unpaid business tax obligations such as employment taxes or excise taxes. According to the IRS, both notices carry the same intent to levy warning and the same level of urgency. If you received a CP504B for a business tax account, the response options and deadlines are the same as those described above for the standard CP504.

Frequently Asked Questions About The IRS CP504 Notice

How Serious Is A CP504 Notice?

A CP504 is one of the most urgent notices the IRS issues. According to the IRS, it is a formal Notice of Intent to Levy that authorizes the agency to begin seizing your state tax refund immediately and signals that levies on wages, bank accounts, and property will follow if you do not respond.

What Comes After A CP504 Notice?

The next step after a CP504 is typically the LT11 or Letter 1058, the Final Notice of Intent to Levy. According to the IRS, this final notice grants you 30 days to request a Collection Due Process hearing. If you do not respond, the IRS can proceed with levying your assets.

Is A CP504 Sent By Certified Mail?

The CP504 is typically sent by regular U.S. mail, not certified mail. According to the IRS, the subsequent final notice (LT11 or CP90) may arrive by certified mail because it triggers Collection Due Process hearing rights and the IRS must document delivery.

Can I Set Up A Payment Plan After Receiving A CP504?

Yes, you can still apply for an installment agreement after receiving a CP504. According to the IRS, you can apply online through the IRS Online Payment Agreement tool at IRS.gov or by calling the toll-free number printed on the notice. Setting up a payment plan stops the escalation toward active levy action as long as you remain current on your payments.

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