IRS Notice CP503: What It Means and What to Do Next
A CP503 is the IRS's second reminder, and the tone is more urgent. The next letter is usually a notice of intent to levy.
Have a CPA review my CP503A CP503 means the IRS still hasn't heard from you about an unpaid balance after earlier notices. Penalties and interest have kept growing.
If the balance stays unpaid, the next step is usually a CP504, which allows the IRS to take your state tax refund. This is a good time to act, while you still control the timing.
Where this notice falls in the IRS process
- CP14 — Balance due
- CP501 — Reminder
- CP503 — Second reminder — you are here
- CP504 — Notice of intent to levy
- LT11 / Letter 1058 / CP90 — Final notice, 30-day hearing rights
- Levy on wages, bank accounts, or other property
What the IRS can do now
- Keep adding penalties and interest to your balance.
- Keep future federal tax refunds and apply them to the balance.
- Send a CP504 notice of intent to levy if you don't respond.
What the IRS generally can't do yet
- Garnish your wages or levy your bank account based on this notice alone.
- Take away your right to a payment plan, hardship status, or other resolution.
Your options
Pay in full
If you can, this stops penalties and interest from growing. Confirm the balance is correct first.
Payment plan
Short-term plans (up to 180 days) and longer installment agreements are available. While a plan is in place, the monthly failure-to-pay penalty is generally cut in half.
Hardship status
If paying would leave you unable to cover basic living expenses, the IRS can pause collection by marking your account Currently Not Collectible.
Offer in Compromise
Settling for less than you owe is possible when your income and assets show you can't realistically pay the full amount. It's not for everyone, so get a real evaluation.
Penalty relief
First-time abatement or reasonable-cause relief can remove some penalties, lowering what you owe.
Dispute the balance
If the amount is wrong, or payments weren't credited, respond in writing with proof before the deadline.
What not to do
- Ignore it. Each unanswered letter moves you closer to levies on your paycheck and bank account.
- Call the IRS unprepared. Know your income, expenses, and any unfiled years before you negotiate.
- Pay a company that guarantees "pennies on the dollar" before anyone has looked at your IRS records.
- Leave returns unfiled. The IRS generally requires all required returns to be filed before it will agree to a resolution.
Got a CP503? Get ahead of the levy notice.
Tiffany V., CPA can pull your IRS records, confirm the balance, and put a plan in place before a CP504 shows up.
Book my CPA reviewFrequently asked questions
Is CP503 the last notice before a levy?
No. A CP504 notice of intent to levy usually comes next, and wage or bank levies generally require a final notice with 30-day hearing rights after that.
I never got a CP14 or CP501. Is this real?
It can be. Notices sometimes go to an old address. Check your IRS online account at IRS.gov to confirm the balance and see your notice history.
Can I make a partial payment?
Yes, and it reduces what interest and penalties accrue on. But a partial payment alone doesn't stop the notices. A payment plan or other arrangement does.
Written by Tiffany V., CPA, founder of Cents Savvy LLC. Last reviewed October 2026. This page is general information, not tax or legal advice for your situation. Cents Savvy LLC is a private CPA firm and is not affiliated with the IRS. Always follow the dates printed on your own notice.