IRS Notice CP504: What It Means and What to Do Next
A CP504 is the IRS warning that it intends to levy, meaning seize, money to cover an unpaid balance. It's serious, but you still have time and options if you move now.
Have a CPA review my CP504A CP504 means the IRS still shows an unpaid balance after earlier reminders (usually CP14, CP501, and CP503) and is now warning that it will levy. The first thing it can take is your state income tax refund.
Despite the scary wording, a CP504 is generally not the final notice before wage garnishment or a bank levy. That comes next, with an LT11, Letter 1058, or CP90, which gives you 30 days to request a hearing. The time between those letters is your best window to fix this on your terms.
Where this notice falls in the IRS process
- CP14 — Balance due
- CP501 — Reminder
- CP503 — Second reminder
- CP504 — Notice of intent to levy — you are here
- LT11 / Letter 1058 / CP90 — Final notice, 30-day hearing rights
- Levy on wages, bank accounts, or other property
What the IRS can do now
- Take your state income tax refund and apply it to your federal balance.
- Keep adding penalties and interest every month the balance is unpaid.
- Move your account to the final levy notice (LT11, Letter 1058, or CP90) if you don't respond.
- For larger balances, certify the debt as "seriously delinquent" to the State Department, which can affect your passport. The dollar threshold is adjusted each year.
What the IRS generally can't do yet
- In most cases, garnish your wages or levy your bank account until it sends a final notice of intent to levy with hearing rights.
- Take away your right to request a payment plan, hardship status, or other resolution. Those options are still open.
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. Many people qualify to set one up without a financial disclosure.
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. The next letter gives the IRS power over 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 CP504? Let's stop it here.
Tiffany V., CPA can pull your IRS records, confirm what you actually owe, and map the best resolution before the final notice arrives.
Book my CPA reviewFrequently asked questions
Is CP504 the final notice before the IRS takes my paycheck?
Usually not. A CP504 lets the IRS take your state tax refund. Wage garnishment and bank levies generally require a final notice of intent to levy (LT11, Letter 1058, or CP90), which gives you 30 days to request a Collection Due Process hearing.
How long do I have to respond to a CP504?
Use the due date printed on your notice. The deadline is measured from the notice date, not the date you received it, so act right away.
Can the IRS take my state tax refund after a CP504?
Yes. Seizing your state income tax refund is the main levy action a CP504 warns about, and it can happen without another letter.
Can I still get a payment plan after a CP504?
Yes. Payment plans, hardship status, and other options remain available. Setting one up is one of the most common ways to stop collection from escalating.
Do I need a professional to handle a CP504?
Not always. If the balance is small and you can pay or set up a simple plan, you may handle it yourself. If you have a large balance, unfiled returns, multiple years, or can't afford a payment, a CPA, EA, or tax attorney can represent you and deal with the IRS directly.
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.