The IRS CP504 notice is more severe than the CP501 through 503. It is your final warning to pay back the unpaid taxes you owe before the IRS takes further action. 

In the following article, we’ll discuss the CP504 notice, why you’re receiving it, and what you can do to resolve it.

What is IRS Form CP504?

The CP504 is a notice of intent to levy, which means the IRS intends to levy your income or even your property to recover their unpaid taxes. It comes after having sent multiple previous warnings to pay your owed taxes.

Understanding Your CP504 Notice

The CP504 tax notice is the last warning in the IRS's series of notices starting with the CP501. As such, it will outline an escalation to the consequences imposed on you if you do not pay your unpaid taxes and how the IRS intends to collect them. 

The CP504 will provide important information on the debt you owe, the tax period from which you owe it, and when you must pay it back to avoid further penalties and collection action. 

As your final warning, reading the notice carefully and reviewing it for accuracy is especially important. If you believe the IRS has made an error, you can dispute the notice by contacting the IRS. 

Why You're Receiving a CP504

You’re receiving the IRS CP504 because you have overdue unpaid taxes. 

The CP504 notice differs from others in the line as it comes after previous reminders and warnings from the IRS about the taxes you owe. It is the IRS's last warning before taking collection action to retrieve the unpaid amount. 

What You Should Do Now

If you receive a CP504 notice, the first thing you should do is to read it over carefully to see if the IRS assessment matches your records. You can dispute the notice if you believe they’ve made an error.

If you believe it to be accurate, then you’ll need to take action to pay off your remaining tax balance.

A third option is to look into tax debt relief services. A good tax attorney will often be able to lower the amount owed back and help to negotiate on your behalf. This can relieve some of the stress associated with the pressure the IRS is putting on you or your business.

In addition to payment plans, the IRS is willing to make compromises due to financial hardship and constraints if you are cooperative and communicative with them. It is also possible to reduce the amount owed from penalties for being late or unresponsive. 

How to Pay the IRS CP504 Notice

You have several ways to pay the notice, but before we explain that, there are a few steps you should do first:

Assess What You Owe

Before making a payment, it's essential to understand how much you owe and check that the IRS assessment matches your records. 

Take the time to review your tax account and ensure you understand the amount and any penalties or interest that may have accrued to provide the final amount you now owe. If something isn’t adding up, discussing it with someone who knows the system is important.

Consult with a Licensed Tax Attorney

Next, consult with a licensed tax attorney before sending in your response, especially if you believe the IRS has made a mistake. They can help you to:

• Understand the notice and your options

• Assess your tax account and identify any errors or discrepancies

• Determine the best course of action to resolve the notice

• Represent you in dealings with the IRS

Only Respond with Legal Assistance

A licensed tax attorney can help you navigate the process and ensure you take the best action. 

Once you’ve assessed the situation and responded to the IRS, you can now pay the amount you owe in one of the following ways:

Online

Direct Pay: You can pay CP504 directly from your bank account. Log in to your online banking account and follow the prompts.

EFTPS: This system is a convenient way to pay online or by phone. You'll need to enroll in the system and follow the prompts to complete the payment.

Over the Phone

If you prefer to pay over the phone, you can use the IRS's automated system or speak with a representative.

Automated System: The IRS's automated system is available 24/7 and allows you to pay using your credit or debit card.

Speak with a Representative: If you prefer to speak with a representative, you can call the IRS's customer service number during business hours. 

By Mail 

If you prefer to pay by mail, you can send a check or money order to the address listed on the CP504 notice.

Check or Money Order: Make your check or money order payable to "United States Treasury" and include your payment voucher or a note with your name, taxpayer ID number, and the tax period.

When Do I Have to Pay My CP504 Notice?

Your CP504 notice will clearly label the payment due date. If you receive the CP504, your payment will already be past due, but the IRS typically gives you 30 days to fix the issue before more significant penalties occur.

If you cannot pay the amount listed in full, you can arrange a payment plan with the IRS.

Frequently Asked Questions

Can I Pay My CP504 Notice Online?

Yes. You can pay for the CP504 notice online through the IRS’s direct pay system or the Electronic Federal Tax Payment System (EFTPS).

What Happens After a CP504?

If you do not pay the CP504 notice, the IRS will likely take action, including:

• Seizing assets (house, car, bank account, etc.)

• Garnishing wages

• Filing a federal tax lien against your property

They may also add interest and penalties to your taxes owed in addition to their collection methods.

What's the Difference Between CP501 and CP504?

The CP501 notice is the first notice the IRS sends to inform you that you owe taxes. The CP504 notice is a final warning that the IRS intends to take further action if the debt is not paid.

This means it is your last chance to pay without significant consequences.

Why Did I Get a CP504 If I Paid My Taxes?

Sometimes, this happens if there is an error when processing your payment. In this case, you should have received previous notices to let you know.

If you believe the notice is in error, you must contact the IRS to dispute CP504.

The Fastest Way to Resolve Your CP504 Notice

The fastest and most straightforward way to resolve your CP504 notice is to pay it off in full as soon as possible. 

If you cannot pay it off in full, you can contact the IRS to arrange a payment plan. Once this is in place, no more penalties will occur, and you can consider it resolved as long as you meet your payments on schedule.