IRS Notice CP 504 is a Notice of Intent to Levy. However, it’s not exactly what it sounds like. This document is actually the final reminder of your past-due tax bill from the IRS. While you should immediately pay (or make arrangements to pay) your tax debt, the only property that can be levied at this point is any state tax refund that may be due to you. Before the IRS levies your property including bank accounts, , wages, personal assets, and retirement assets it must issue a Final Notice of Intent to Levy and Right to a Hearing.
CP 504 also explains additional consequences of failing to resolve your tax debt such as the filing of a Notice of Federal Tax Lien filed against you. This lien can limit your ability to sell or borrow against your property, as well as get credit. You may also not be able to hold a passport, limiting your ability to travel overseas.
IRS Final Notice of Intent to Levy
If you do not address your back taxes, a Final Notice of Intent to Levy and Notice of Your Right to a Hearing will come after IRS Notice CP 504. Your final notice may be LT11 Notice, Letter 1058, or another similar document. This communication from the IRS will include your right to a hearing. This is how you know it is your final notice and the IRS will levy your assets if you don’t properly respond within 30 days.
What to Do with a Final Notice
The first step to resolving your tax debt at this stage is to take action. You can no longer ignore your back taxes. Your options include: paying the amount owed in full; making alternative payment arrangements; or asking for a hearing. Seek out a trusted tax resolution professional to help you decide what your best course of action is. You can schedule a free consultation with a licensed CPA in our Boca Raton office to see how East Coast Tax Consulting Group can help you navigate an IRS Final Notice of Intent to Levy.
If you’re able to pay the amount you owe to the IRS in full, your back tax issues will be resolved quite quickly. However, this is not a feasible solution for every taxpayer. A variety of alternative payment arrangements are available to all taxpayers, including:
- Installment Agreement
- Offer in Compromise
- Currently Not Collectable Status
- Innocent Spouse Status
- Penalty Abatement
If you receive a Final Notice from the IRS you can exercise your right to a Collection Due Process (CDP) Hearing with the Office of Appeals by filing Form 12153 within 30 days from the date of the letter. This prevents enforced collection activity against you until a decision is made on your proposed collection alternative. However, if you fail to act, the IRS can and will seize your assets. At this point, your tax resolution becomes about stopping an IRS levy rather than preventing one.