The IRS Notice CP504 is sent after a taxpayer has been unresponsive to previous notices and there is still a balance due. Also referred to as the Final Notice, the CP504 states that the IRS intends to issue a levy if there is no response.

This is your third reminder about your tax debt and it is a highly urgent notice with additional penalty fees and interest. Without your immediate response, the IRS may soon levy your state tax refund and file a lien on your property – if they haven’t already done so.

Look for any issues with your CP504 notice:

• Do you agree with the amount the IRS claims you owe?
  • If you disagree, you have the right to dispute the IRS.
• Do you have the means to pay the full amount?
  • If paying in full would create a financial hardship, you may qualify to settle the debt for less than the full amount. You may also qualify for a payment plan.
• Is this your first time receiving a tax penalty?
  • You may qualify to eliminate some of those penalties through the first-time penalty abatement program.

If you agree with the balance due and have the means to pay it, paying as soon as possible will help you avoid additional interest and penalty charges.

By the time you are mailed the CP504 Notice, you should have already received plenty of previous notices from the IRS, such as the CP501 and CP503, which instruct you to take action on your back taxes.

The CP504 is your final reminder to pay your balance due before severe consequences are issued by the IRS. It is also a Notice of Intent to Levy, meaning that the IRS intends to seize your wages, bank account, or state tax refund to apply to your tax debt. A lien may also be filed on your account. 

This IRS notice includes:

• Tax Year
• Amount Due
• Payment Deadline
• Intent to Seize Your Property or Rights to Property
• Payment Options
• Failure-To-Pay Penalty and Interest
• IRS Contact Information
  

While the CP504 Notice is known as the “Final Notice”, it is best understood as a final reminder the IRS is sending before they intend to levy your assets. CP504 is not the final notice you will receive and increasingly urgent notices with harsher consequences will follow until you address your back taxes.

If you do not respond to the IRS or address your tax debt, a Final Notice of Intent to Levy and Your Notice of a Right to a Hearing will be issued. This is usually communicated through IRS Notice LT1058 or LT11. Be sure to address your back taxes and avoid receiving these notices before your assets are levied.

IRS Notice CP504 and CP504B are nearly identical letters with the same intent. The difference is that Notice CP504 is sent to individual taxpayers while Notice CP504B is sent to businesses owing back taxes. 

When dealing with CP504, you must make an important decision: take the necessary actions to pay off your tax debt or face collection protocols from the IRS. At this stage, you cannot continue ignoring your back taxes. 

Paying off the entire amount owed will cease threats or penalties from the IRS. If you cannot pay the full amount, you can set up a repayment plan or submit an Offer in Compromise, but you must do this as soon as possible before the penalties get worse. 

You can instantly pay your IRS CP504 Notice online or by mailing a check or money order.

If you receive a CP504 Notice and believe the balance due is incorrect, you can dispute it by carefully reviewing the notice and contacting the IRS to discuss the discrepancy. Act promptly, as failing to respond can lead to more aggressive collection actions like asset seizure or wage garnishment.

Don’t let mounting tax debt keep you awake at night. As IRS penalties and interest continue to grow, your tax burden can feel overwhelming. Our seasoned tax professionals at TaxRise will help you navigate your options and find the path to tax relief. Take the first step toward financial peace of mind today.