IRS Notice CP504: what it means and what to do
A CP504 is the IRS telling you it intends to start seizing property to collect what you owe. It's serious, but it isn't the end of the road, and you still have time to stop it.
What a CP504 means
The CP504 is a Notice of Intent to Levy. "Levy" is the legal word for seizing property to pay a tax debt. By the time you get one, the IRS has usually already sent you a CP14, CP501 and CP503, and your balance is still unpaid.
The notice shows your balance, including tax, penalties and interest, and the date you need to pay or respond by. Interest keeps adding up every day, and the failure-to-pay penalty keeps growing each month until the balance is paid or the penalty reaches its cap.
What the IRS can take after a CP504
- Your state tax refund, right away. The CP504 lets the IRS take your state refund without any further notice.
- Wages, bank accounts and other property, soon. For most other assets, the IRS has to send one more letter first: a final notice (LT11, Letter 1058 or CP90) that gives you 30 days to ask for an appeal hearing.
- Your passport, in some cases. If your debt is above the IRS's "seriously delinquent" threshold (over $60,000, adjusted every year) and you have no payment arrangement, the IRS can ask the State Department to deny or revoke your passport.
The IRS may also file a Notice of Federal Tax Lien, a public claim against your property that can make it harder to sell a home or get a loan.
What to do now
- Check that the balance is right. Compare it with your return and your payment records. If you already paid, or you think the IRS made a mistake, respond with proof before the date on the notice.
- If you can pay in full, pay by the date on the notice through your IRS online account or IRS Direct Pay. That stops the levy process.
- If you can't pay in full, set up a resolution before the deadline. The usual options are a payment plan, "currently not collectible" status if you can't afford any payment, or an offer in compromise. See our guide to IRS payment plans.
- Ask about penalty relief. If you had a clean record for the past three years, you may qualify for first-time penalty relief, which can remove part of what you owe.
- Keep filing. Any missing tax returns need to be filed before the IRS will agree to most resolutions.
What happens if you ignore it
The IRS will send a final notice, usually an LT11 or CP90. Thirty days after that, it can levy your wages, bank accounts, and other income and property. A wage levy keeps taking part of every paycheck until the debt is paid or the levy is released. Read how to stop an IRS wage garnishment.
Where CP504 fits
The IRS sends collection notices in this order. A CP504 means there's only one more notice before a levy.
Common questions
Is a CP504 a scam?
Real CP504s arrive by mail, never by text or social media. To make sure, sign in to your IRS online account at irs.gov and check your balance, or look up the notice number on the IRS website. The IRS will never ask you to pay with a gift card or crypto.
Can the IRS take my paycheck after a CP504?
Usually not yet. Before levying wages, the IRS generally has to send a final notice (LT11, Letter 1058 or CP90) and wait 30 days. A CP504 does allow the IRS to take your state tax refund right away.
Will a CP504 hurt my credit score?
The IRS doesn't report to credit bureaus, and the major bureaus no longer include tax liens on credit reports. A recorded lien is still public, though, and lenders can find it.
I can't afford anything. What then?
If paying anything would leave you unable to cover basic living expenses, you may qualify for "currently not collectible" status, which pauses collection. You'll need to show the IRS your income and expenses.
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Written by Jonathan Samuel, EA, an Enrolled Agent licensed to represent taxpayers before the IRS. This page is general information, not advice for your specific situation.