IRS CP504 Notice: What It Means and What to Do

The short version. A CP504 is a Notice of Intent to Levy. It means the IRS plans to seize your state income tax refund to cover what you owe, and it may begin searching for other assets. It is one of the last warnings before the IRS can move against your wages and bank accounts, so it is worth handling now.

What the IRS can and cannot do next

This is the part most sites get wrong. A CP504 is not the same as the final notice, and the difference matters for what happens to your money.

After a CP504, the IRS can

Take your state income tax refund after 30 days.
Keep adding penalties and interest to the balance.
Begin searching for other assets it may later levy.
File a Notice of Federal Tax Lien.

After a CP504, the IRS cannot yet

Levy your wages from the CP504 alone.
Levy your bank account from the CP504 alone.
Take those steps without first sending a final notice (LT11, CP90, or Letter 1058).
Skip the Collection Due Process hearing rights that come with that final notice.

Why the state refund is different

By law, the IRS can levy a state tax refund based on the CP504 alone, because that source does not carry a pre levy Collection Due Process hearing right. For most other property, including wages and bank accounts, the IRS must first issue the final notice that gives you the right to a hearing. That is why the CP504 is a serious warning but not the last word.

What you can do about it

Which path fits depends on whether you can pay, how much you owe, and whether the balance is even right. Each is something you request and the IRS reviews. None is guaranteed.

Set up an Installment AgreementPay the balance over time in monthly amounts.
Ask for Currently Not Collectible statusIf you cannot pay anything now without hardship, the IRS can pause active collection.
Apply for an Offer in CompromiseSettle for less than the full balance when paying in full is not realistic.
Request Penalty AbatementIf penalties are a large part of the balance.
Check whether the balance is even rightIf the debt came from a proposed change like a CP2000, the underlying number may be worth disputing.

This is one notice. There may be more on your account.

A CP504 shows one balance. Your full IRS account can hold other years, other balances, and exactly where you stand in the collection process. Send your case in for a free review and we will tell you what is there.

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Related IRS notices

Not your notice? Look yours up on the home page.

The legal basis

What this is grounded in

Notice of Intent to Levy: Internal Revenue Code section 6331(d).
Collection Due Process hearing rights before other levies: Internal Revenue Code section 6330.
State refund exception to a pre levy hearing: Internal Revenue Code section 6330(f).
Levy process and required notices: IRM 5.11.1 and IRM 5.19.4.
Official IRS explanation of this notice: Understanding your CP504 notice.

These are the controlling Internal Revenue Code sections and Internal Revenue Manual parts. Links go to the live IRS.gov pages so you can confirm every point yourself.

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Got an IRS CP504 Notice? Here Is What It Means.