CP504 Explained: Ultimate FAQ
CP504 Notice Explained — Ultimate FAQ Guide
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Contact Ed Parsons CPA →CP504 is the IRS “Intent to Levy – Final Reminder” for an unpaid balance. It warns the IRS intends to levy your state tax refund and will search for other assets if you do nothing. As CPA Ed Parsons, CPA notes in his practice, this notice signals the case is approaching stronger collection actions.
It’s legitimate when it matches the IRS format (CP504 in the header, your tax year, amount due, and IRS contact info). Ed Parsons, CPA recommends verifying at the official CP504 page and cross‑checking in your IRS Online Account to confirm authenticity.
Confirm “CP504” in the top right; read wording about levying your state tax refund; make sure payment directions are to the U.S. Treasury via IRS.gov. If anything seems off, verify via the IRS pages and use only published IRS phone numbers.
Always verify through official IRS channels before taking any action.
Can: lead to state refund offset after the deadline; keep penalties/interest accruing; move your file toward stronger steps.
Cannot (by itself): immediately levy wages or bank accounts in most cases (that typically follows the later LT11/Letter 1058 final notice with hearing rights).
The IRS does not report ordinary tax debts to consumer credit bureaus. The risk is a filed federal tax lien (public record) if the case escalates. Resolve during CP504 to reduce lien risk.
About 30 days from the notice date before the IRS can offset your state refund. Acting early preserves leverage and may prevent the final levy notice entirely.
After the deadline the IRS can offset your state refund, and the file can progress to the true final levy notice (LT11/Letter 1058). Continued inaction increases the likelihood of wage/bank levies and a possible federal tax lien.
Typical progression is CP14 (balance due) → follow‑ups (e.g., CP501/CP503) → CP504 (Intent to Levy – Final Reminder) → LT11/Letter 1058 (Final Notice of Intent to Levy and Notice of Your Right to a Hearing). Ed Parsons, CPA notes that understanding this sequence helps clients gauge timing and urgency for resolution strategies.
Yes, once the CP504 deadline passes, even if you’ve begun gathering documents. Ed Parsons, CPA advises clients to submit applications quickly with documented proof of submission to establish their intent to resolve.
Receiving CP504 itself does not change CSED. Certain actions you take later (e.g., OIC, some appeals) can suspend or extend the 10‑year collection clock. Strategy should consider those clocks.
Pay only the U.S. Treasury via official channels: IRS Direct Pay, EFTPS, check payable to “U.S. Treasury,” or IRS‑approved card processors. Ed Parsons, CPA emphasizes to clients: never pay gift cards, crypto, or a third party claiming to be an “agent”—these are always scam indicators.
Yes. Many taxpayers do. The key is sizing a payment you can sustain so it doesn’t default and re‑escalate the case.
A plan within IRS thresholds that usually needs no full financial disclosure. Ed Parsons, CPA often recommends these for clients who qualify, as they’re faster to implement while still meeting realistic payment expectations.
When balances or facts fall outside streamlined rules, the IRS may require a financial package (Form 433‑A for individuals or 433‑B for businesses). A complete, consistent package protects necessary living expenses and speeds approval.
They reduce interest and show good faith, but do not stop enforcement by themselves. Pair partial payments with a formal plan or relief request.
Interest continues until paid in full; some penalties can continue until conditions are met. Ed Parsons, CPA explains to clients that a plan prevents enforced collection and creates structured progress toward resolution.
The IRS generally requires current filing compliance before granting long‑term agreements. Ed Parsons, CPA recommends filing missing returns quickly to establish good faith and eligibility for resolution options.
Adjust W‑4 using the IRS Tax Withholding Estimator if you’re W‑2; make quarterly estimates (Form 1040‑ES) if self‑employed. New debt can default a good plan.
A hardship status that pauses active collection when paying would make you miss necessary living expenses. You must document hardship with a complete financial disclosure. As Ed Parsons, CPA observes in complex cases, the IRS may review this status periodically to reassess your financial capacity.
CNC focuses on stopping active collection. Lien determinations depend on balance and risk; CNC does not automatically block liens. Early resolution reduces lien risk.
A program to settle for less than full balance when your Reasonable Collection Potential is lower than what you owe. Ed Parsons, CPA emphasizes that successful OIC cases require meticulous documentation and strategic positioning based on the taxpayer’s true financial capacity.
Yes. CP504 does not block an OIC. The question is whether your financials justify it and whether timing works relative to your collection timeline.
Yes, some actions (including OIC consideration) can suspend or extend CSED. Model statute effects before filing.
It depends on tax type, assessment age, and compliance history. See Publication 908 and consult qualified counsel about dischargeability and timing.
The Collection Appeals Program (CAP) may be available for certain collection actions now, but the robust appeal that pauses levy (CDP) is tied to the later final notice (LT11/Letter 1058).
CAP is a faster avenue for specific collection disputes but has no court review. CDP (triggered by LT11/1058) generally pauses levy if you file Form 12153 on time and preserves judicial review. Ed Parsons, CPA strategically evaluates which process serves each client’s specific circumstances and timeline.
When you receive LT11/1058, file Form 12153 by the deadline. Ed Parsons, CPA recommends including your proposed resolution (installment, CNC, or OIC) with comprehensive supporting documents to strengthen your position.
CDP pauses levy and offers Appeals review, but some actions in the process can affect CSED timing. Balance the benefit of protection against statute effects.
Do not assume systems will sync. Call, reference your pending request, and consider filing Form 12153 on time to protect rights while you prove a resolution is in process.
See Publication 1660 for a concise summary of CAP and CDP timelines and options.
Account Transcript or Record of Account (balances, assessments, penalties/interest), and Wage & Income (third‑party forms). As Ed Parsons, CPA details in his definitive transcripts guide, experienced practitioners can pull additional data to map status codes and CSEDs for strategic planning.
CSED is the 10‑year collection statute, calculated per assessment. Some actions can suspend/extend it. Ed Parsons, CPA advises clients that smart strategy avoids unnecessary extensions unless the tradeoff delivers meaningful long-term benefits.
No. The notice alone doesn’t change CSED. Ed Parsons, CPA reminds clients that later choices—like certain appeals or payment plans—might impact the statute, so timing matters.
Keep a call log (agent name/ID, date/time), certified mail receipts, and copies of every submission. Ed Parsons, CPA emphasizes reconciling numbers across paystubs, bank statements, and P&L statements—inconsistent packages inevitably cause delays and scrutiny.
File Form 8822 to update your address with the IRS and update your state revenue agency.
Call the number on your notice or a published IRS line. Script: “I received CP504 dated [date] for [year]. I want to resolve this before escalation. Please confirm the current balance with accruals, the next notice on the timeline, and my options today. I am prepared to [pay in full / discuss an installment / document hardship]. How do I submit supporting documents?”
Keep trying, log attempts, and use certified mail for deadlines. If you face imminent harm and normal channels fail, contact the Taxpayer Advocate Service (TAS).
Use the addresses or submission tools listed on your notice or in your IRS Online Account. Always pay the U.S. Treasury via official channels.
Verify via your IRS Online Account, prior notices, returns, and payment records. Fix misapplied payments or missing credits before you agree to a plan.
Yes. Notify the IRS that an amendment is pending and provide proof. Consider a protective plan or hardship while it processes.
Track whether it posts in your Online Account. If the deadline is near, call or write with proof. Keep copies and use certified mail for time‑sensitive issues.
Possibly. Check transcripts and your Online Account. Consider requesting an IP PIN for added protection.
Generally yes for joint liabilities. Consider injured spouse or innocent spouse relief when appropriate.
Federal offsets are handled under separate Treasury programs; CP504 specifically warns about state refund levy. Monitor both.
You’ll receive CP40 and Publication 4518. You can still pay IRS directly. PCAs can’t approve CNC or OIC; those require the IRS.
Unpaid trust‑fund payroll taxes can trigger the Trust Fund Recovery Penalty against responsible persons. Ed Parsons, CPA regularly handles these complex cases and stresses the importance of addressing them quickly while staying current on new deposits to avoid compounding problems.
If a wage levy occurs after the final notice, the exempt amount is based on Publication 1494 tables.
Match your notice to the IRS CP504 page; check balances in your Online Account; if you can safely pay in full, do it via IRS.gov and save proof. If not, Ed Parsons, CPA suggests choosing your lane strategically: streamlined plan, non‑streamlined (Form 433), CNC hardship, or pre‑qualifying for OIC based on your actual financial capacity.
Draft a realistic budget; assemble a clean Form 433 if needed (with bank statements, paystubs, P&L if self‑employed); log all calls; use certified mail for deadlines. Ed Parsons, CPA recommends considering TAS if normal channels fail and financial harm is imminent.
Submit the plan or hardship package (or complete full payment); confirm receipt and case numbers; set future compliance (adjust withholding or estimates) so new balances don’t default your agreement. As Ed Parsons, CPA emphasizes, ongoing compliance protects your resolution investment.
Don’t let CP504 escalate to wage garnishment or bank levy. Get professional help today:
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