The CP504 Notice, also known as the Notice of Intent to Levy, is a serious warning from the IRS indicating that they plan to levy your assets if you do not resolve your unpaid tax debt. When the IRS sends a CP504 notice, it means that previous notices about your outstanding balance have been ignored or unpaid, and the IRS is now preparing to take action to collect the debt.
A levy allows the IRS to seize your property to satisfy tax debt, including:
- Bank accounts
- Wages (wage garnishment)
- Retirement accounts
- Social Security benefits
- Personal property (e.g., cars, houses)
The CP504 provides the taxpayer with one final opportunity to pay the balance or make payment arrangements (like an Installment Agreement) before the IRS proceeds with enforcement actions. It is critical to respond to this notice promptly, as failure to do so can result in the IRS seizing your assets within 30 days of the notice being issued.
Taxpayers who are unable to pay the full balance can request an Installment Agreement, submit an Offer in Compromise, or apply for Currently Not Collectible (CNC) status if they cannot afford to pay. The notice also includes information about how to appeal the levy through the Collection Due Process (CDP) hearing process. Ignoring a CP504 notice can lead to serious financial consequences, so it is essential to act quickly.