IRS Notice CP504 is the IRS Notice of Intent to Levy. When you receive IRS Notice CP504, the IRS is warning you that it intends to start taking your property or rights to property—such as your state tax refund, wages, or bank account—to collect your unpaid federal tax debt.

This is a serious collections notice. IRS Notice CP504 usually arrives about five weeks after a CP503 balance-due reminder. If you still don’t resolve your balance, the IRS will typically follow the CP504 with a Final Notice of Intent to Levy and Your Right to a Hearing (often Letter LT11).

IRS Notice CP504 at a Glance

• Notice Type: Collections – Notice of Intent to Levy
• Generated By: IRS Automated Collection System (ACS)
• Preceded By: CP503 (2nd notice of balance due)
• Followed By: LT11 or CP90 (Final Notice of Intent to Levy and Right to a Hearing)
• Recommended Action: Enter into a resolution or pay off the balance as quickly as possible

IRS Notice CP504 Explained, Part by Part

Part 1: Final Balance-Due Reminder and Intent to Levy IRS Notice CP504

At the top of IRS Notice CP504, you’ll see bold language like:

“Final Notice — Balance Due”
“Notice of Intent to Seize (Levy) Your Property or Rights to Property”

This section serves two purposes:

1. Reminds you that you still have a balance due.
2. Formally notifies you that the IRS intends to levy your property or rights to property if you do not act.

This is not an idle threat. By the time IRS Notice CP504 is issued, your account is deep into the collection process.

Part 2: Amount Due Immediately on IRS Notice CP504

Next, IRS Notice CP504 shows the “Amount due immediately” box. This is the total of:

• Your underlying tax
• Assessed penalties
• Accrued interest through a specific date

Important details:

• The amount shown is only accurate through the payoff date listed (usually 21 days, or 10 days if you owe $100,000 or more).
• If you wait longer, more interest and possibly additional penalties will accrue.
• The years included in this total are detailed later in the Billing Summary.

Part 3: What the IRS Wants You To Do Immediately

In a checklist-style section, IRS Notice CP504 lists what it wants you to do right away. Typically, the steps are:

• Gather information from your notice (SSN, tax year, balance, notice number).
• Pay online directly from your bank account at the IRS Direct Pay website.
• Or, consider other payment options if you can’t pay in full.

In short, the IRS wants you to pay the full balance as soon as possible or set up some form of payment arrangement.

Part 4: Consequences If You Don’t Pay Immediately

This section of IRS Notice CP504 explains what can happen if you don’t respond or pay:

1. Levy

If you ignore IRS Notice CP504, the IRS can begin seizing property or rights to property. After this notice:

• The IRS can levy your state income tax refund under the State Income Tax Levy Program.
• After issuing a Final Notice of Intent to Levy (often LT11), it may also levy wages, bank accounts, and other non-exempt assets.

2. Filing a Notice of Federal Tax Lien

The IRS already has a legal claim (“secret lien”) to your assets once tax is assessed and unpaid. After IRS Notice CP504, it may:

• File a Notice of Federal Tax Lien (NFTL) with county or state authorities.
• Make your tax debt a matter of public record, which can affect credit, lending, and business relationships.

3. Passport Revocation or Denial

If your total “seriously delinquent” tax debt surpasses a threshold (adjusted periodically), the IRS can:

• Certify your debt to the U.S. Department of State.
• Lead to denial of a new passport or renewal.
• In some cases, result in revocation of your current passport.

If you travel internationally, IRS Notice CP504 is a clear sign you need to address your tax debt before it affects your ability to travel.

Part 5: Other Payment Options

Here the IRS lists alternatives if you can’t or don’t want to use Direct Pay:

• Pay online by card (fees apply).
• Mail a check or money order payable to “United States Treasury.”
• Apply for a payment plan (installment agreement) at IRS.gov/payments or the Online Payment Agreement tool.

The message is simple: choose some way to start paying.

Part 6: Information About Paying by Check

This section explains:

• The IRS may convert your paper check into an electronic funds transfer, which can clear your bank faster than a standard deposit.
• The payoff amount shown on IRS Notice CP504 is valid only if you pay within the specified 21-day (or 10-day) window. After that, more interest and penalties can accrue.

Part 7: Notice of Intent to Levy — Legal Background

IRS Notice CP504 fulfills the requirement in Internal Revenue Code § 6331(d) for a Notice of Intent to Levy.

To legally levy in full, the IRS must send three types of notices:

IRS Notice CP504 is the middle step. After it is issued, the IRS can levy your state tax refund. Once the Final Notice (LT11/Letter 1058) is issued, the IRS can move on wages, bank accounts, and more if you don’t resolve the debt.

Part 8: Notice of Federal Tax Lien

Here the IRS reminds you that:

• It already has a legal claim to your property.
• If you don’t pay or enter into a resolution, it may file a Notice of Federal Tax Lien, making that claim public.

This can affect:

• Business credit lines
• Personal financing (mortgages, auto loans)
• Vendor and lender relationships

Part 9: Collection Appeals Program (CAP)

The CP504 includes information about the Collection Appeals Program (CAP), which lets you:

• Appeal proposed or actual levy actions
• Appeal the filing of a Notice of Federal Tax Lien

CAP appeals are faster but offer fewer rights than a full Collection Due Process (CDP) hearing. Still, they can be useful when you need to quickly challenge a specific collection action.

Part 10: Your Billing Summary

In this section of IRS Notice CP504, you’ll see a year-by-year breakdown of what the IRS believes you owe:

• Tax period ending (typically the tax year)
• Form number (e.g., 1040, 1040-SR, etc.)
• Amount you owed (original assessed tax)
• Interest added since filing
• Failure-to-pay penalty and possibly other penalties
• Total for each year included in the notice

This is where you verify whether the years and amounts match your own records.

Part 11: IRS Help Section

Here the IRS gives you:

• A link to the official IRS Notice CP504 webpage
• The phone number for the Balance Due Notice Line
• A reminder that the IRS may contact third parties (banks, employers, etc.) to verify your information and pursue collection

Part 12: Taxpayer Rights and Sources of Assistance

IRS Notice CP504 also references:

• The Taxpayer Bill of Rights
• IRS Publication 1
• Low-Income Taxpayer Clinics (LITCs)
• The Taxpayer Advocate Service (TAS)

These can be valuable if you’re low-income, facing hardship, or dealing with repeated IRS errors.

Part 13: Penalties

This section summarizes unassessed penalties that have accrued but may not yet be posted as part of your balance. Common penalties:

• Failure-to-file penalty: 5% per month (or part of a month), up to 25% of unpaid tax.
• Failure-to-pay penalty: 0.5% per month, up to 25% of unpaid tax (rate can change if a levy notice has been issued or if you’re in an installment agreement).

It also provides a small table per year showing:

• Date through which penalty is calculated
• Number of months
• Unpaid tax amount
• Penalty rate
• Calculated penalty

Part 14: Interest

The interest section explains:

• The interest rate applied to your unpaid tax and penalties
• The time period covered
• The total amount of unassessed interest through that date

IRS interest compounds daily and continues until the debt is fully paid or resolved.

Part 15: Payment Coupon

At the end of IRS Notice CP504, you’ll find a payment coupon. Use this if you:

• Are mailing a check or money order, and
• Want to be sure the payment posts to the correct year and form

Always include:

• Your name and address
• Last four digits of your SSN or EIN
• Tax year and form number

When the IRS Sends IRS Notice CP504

You’re likely to receive IRS Notice CP504 when:

• You filed a return showing a balance due and didn’t pay in full.
• You ignored or didn’t respond to a CP501 and CP503.
• The IRS prepared a Substitute for Return (SFR) for you and assessed tax.
• You paid the original balance but not the penalties and interest that accrued.

Sometimes the IRS is simply wrong—payments may not have been properly credited, or a return may have been misprocessed. That’s why verifying the notice is critical.

What To Do If You Receive IRS Notice CP504

Step 1: Check IRS Notice CP504 for Accuracy

Don’t assume the IRS is right. Compare:

• The tax years listed
• The original tax amount
• Payments and credits you know you made
• The penalty and interest calculations

If something doesn’t match your records, you may have a strong basis to challenge the notice.

Step 2: Correct Any Errors With the IRS

If you see errors:

• Use the phone numbers listed in IRS Notice CP504 (often in the “What you need to do immediately” and “Penalties” sections).
• Be prepared with copies of returns, payment confirmations, and transcripts if you have them.

Many taxpayers prefer to have a CPA or tax resolution professional speak to the IRS on their behalf to avoid misstatements and to preserve their rights.

Step 3: Seek Penalty Abatement

Even if the underlying tax is correct, you may be eligible for penalty relief. Options include:

• First-time abatement for otherwise compliant taxpayers
• Reasonable cause relief (serious illness, natural disaster, reliance on incorrect IRS advice, etc.)

Penalty abatement isn’t guaranteed, but for many taxpayers it can significantly reduce the total owed.

Step 4: Pay the Balance or Seek Tax Relief

After clearing up any errors and exploring penalty relief, you still must decide how to deal with the remaining balance. Common options:

• Pay in full – stops future penalties and interest.
• Installment agreement – pay monthly over time.
• Offer in compromise (OIC) – settle for less than you owe if you qualify.
• Currently not collectible (CNC) status – temporarily halt enforced collection if you truly can’t pay.

IRS Notice CP504 means your case is serious, but it does not mean you are out of options.

Why Many Tax Relief Firms Don’t Go Far Enough on IRS Notice CP504

When IRS Notice CP504 hits, many taxpayers turn to heavily advertised “tax relief” companies that promise to “settle your tax debt for pennies on the dollar.” You need a CPA Firm.

The problem?

• Many of these firms are not licensed CPA firms or law firms.
• Much of the real work is done by unlicensed staff following scripts.
• They often focus on selling an OIC or payment plan—without first verifying that the IRS numbers are correct or that your returns are properly filed.

What gets missed:

• Reviewing your IRS transcripts for errors and uncredited payments
• Checking whether all required returns are actually filed and accurate
• Evaluating penalty abatement opportunities
• Coordinating your tax strategy, entity structure, and bookkeeping so the problem doesn’t come back

In other words, they may be good at selling “relief,” but not at solving the underlying tax and accounting issues that created the problem.

How a CPA Firm Approaches IRS Notice CP504 Cases

A qualified CPA firm with tax-resolution experience looks at more than just the collection notice. A typical process might include:

• Pulling and reviewing your IRS account and wage & income transcripts
• Verifying all payments, credits, and prior assessments
• Checking for missing or inaccurate returns that need to be corrected
• Analyzing your cash flow and assets to determine the best resolution strategy
• Considering OIC, installment agreements, CNC status, or a combination
• Building a plan so you’re compliant going forward, not just patched for this year

You’re not just trying to survive IRS Notice CP504—you’re trying to make sure you never end up here again.

Additional IRS Resources for IRS Notice CP504

You can read more directly from the IRS at these official pages:

• IRS official page on CP504 (Notice of Intent to Levy)
• IRS “Paying Your Taxes” overview
• IRS “Understanding Federal Tax Liens”
• IRS “Understanding Your Collection Appeal Rights”
• IRS “Taxpayer Bill of Rights”

Take the First Step Toward Relief

If you’ve received IRS Notice CP504, you’re at a critical point in the IRS collection process. Ignoring the notice can lead to levies, liens, passport issues, and escalating stress.

You don’t have to figure this out alone.

• Start by gathering your notices and recent tax returns.
• Complete your firm’s Discovery Chat Questionnaire so you can discuss your situation with a professional.
• From there, a structured case evaluation can determine whether the IRS’s numbers are right, what relief you qualify for, and how to stop things from getting worse.

Handled correctly, IRS Notice CP504 can be the turning point where you stop reacting to the IRS and start taking control of your tax situation.