I received a CP504. What does it mean?
A CP504 is a notice of intent to levy. It means the balance is still unpaid after earlier notices, and collection is escalating. It is serious, but it is usually not the last notice before the IRS can levy most property.
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Notice before levy.
The IRS describes the CP504 as the notice of intent to levy required by IRC §6331(d).
Written notice first
The IRS may levy only after notifying you in writing of its intention to do so, at least 30 days before the levy, except where collection is found to be in jeopardy.
Law · IRC §6331(d)(1)–(3)State tax refunds
A levy on a state tax refund is an exception to the pre-levy hearing requirement. The IRS must instead notify you of your right to a hearing within a reasonable time after that levy.
Law · IRC §6330(f)(2); Treas. Reg. §301.6330-1(a)(2)Most other property
Before levying on most other property, the IRS must also notify you of your right to a Collection Due Process hearing. In practice, that comes in a later notice, usually an LT11 or Letter 1058.
Law · IRC §6330(a) · Which notice: IRS practiceThe penalty rate doubles
The failure-to-pay penalty generally rises from 0.5 to 1 percent a month for months beginning more than 10 days after a §6331(d) notice is given.
Law · IRC §6651(d)What the notice warns about.
The IRS says it may levy a state tax refund you are due, and may then levy other property, including wages, bank accounts, business and personal assets, and Social Security benefits. It also says it may file a Notice of Federal Tax Lien.IRS practice · IRS CP504 guidance
The IRS points to its Collection Appeals Program, which can be requested before collection action takes place, and to the hearing right that follows a state refund levy.IRS practice · IRS CP504 guidance
Options that change what the IRS can do.
These restrict new levies. They do not by themselves undo a levy already made.
An installment agreement request
No levy while a request is pending, while an agreement is in effect, or for 30 days after a rejection or termination (and during a timely appeal).
Law · IRC §6331(k)(2)An offer in compromise
No levy while an offer is pending, for 30 days after a rejection, and during a timely appeal.
Law · IRC §6331(k)(1)A Collection Due Process hearing
A timely request after the final notice suspends the levy actions that are the subject of the hearing while it and any appeal are pending, with limited exceptions.
Law · IRC §6330(e)Payment
Paying in full stops further interest and penalties on that balance. Paying part reduces them going forward.
Law · IRC §6601; §6651(b)(2)Use the time before the final notice.
A CP504 usually still leaves time to put a collection alternative in place before the final notice arrives. We use that time to confirm the balance, check every year for unfiled returns, and request the alternative that fits, so the final notice either never comes or arrives with a plan already in motion.Bridge's view · practitioner judgment
We take it from here.
- We take controlOnce you sign the authorization, we deal with the IRS for you. Send us any IRS letter you receive.
- Exactly where you standEvery year, balance and notice, taken from your IRS record.
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- Your Resolution RoadmapIn writing: where you stand, what happens if nothing is done, and which paths are open to you.
Primary sources: Internal Revenue Code §6331, §6330 and §6651; Treasury Regulation §301.6330-1; IRS, Understanding your CP504 notice. General information, not advice for your situation.