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IRS CP504 Notice: Intent to Levy and Your Options
Learn what an IRS CP504 Notice means, its consequences, and your options to avoid levies, wage garnishment, or asset seizure.
The Internal Revenue Service (IRS) uses various notices and correspondence to communicate with taxpayers about their tax obligations. One such notice, the CP504, holds a significant place in the realm of IRS communications as it signals the IRS's intent to levy and take enforcement action to collect a delinquent tax debt. In this comprehensive guide, we'll explore the intricacies of the CP504 notice, understand its implications, and delve into the various options available to address this critical stage of tax debt resolution.
A tax lien may be filed against your property, which can negatively impact your credit score and financial standing. This can make it difficult to secure loans, obtain credit, or engage in financial transactions.
Accrued penalties and interest continue to accumulate on the outstanding tax debt, increasing the overall amount owed.
Frequently Asked Questions
What is the CP504 notice?
A CP504 is an urgent notice telling you that you have an unpaid tax balance and that the IRS intends to take action if it isn't resolved. Specifically, it warns of the agency's intent to levy your state tax refund and to search for other assets it may seize. It's a serious step in the collection process and signals that earlier balance-due notices went unaddressed, so it shouldn't be set aside.
How much time do I have to respond to a CP504 notice?
The notice asks you to pay the balance by the date printed on it, typically about 30 days out. Acting before that date is the best way to head off the levy on your state refund and the further collection steps the IRS describes. If you can't pay in full, it's still wise to contact the IRS or arrange an alternative within that window rather than waiting.
Can I negotiate the terms of an installment agreement after receiving a CP504 notice?
Yes. Receiving a CP504 doesn't prevent you from setting up a payment plan. You can request an installment agreement to pay the balance over time, and many taxpayers can apply online for balances under the IRS thresholds. The monthly amount generally depends on what you owe and your financial situation, so a tax attorney can help you propose terms that are realistic for your budget.
What happens if I don't respond to a CP504 notice?
Ignoring a CP504 allows the IRS to levy your state income tax refund and to continue pursuing collection. After issuing a separate final notice of intent to levy that carries your right to a hearing, the IRS can move to seize wages, bank accounts, and other property, and may file a federal tax lien. Penalties and interest also keep accruing on the unpaid balance, so the cost of inaction grows over time.
Can I appeal a CP504 notice?
If you believe the balance is wrong, you can contact the IRS to dispute it and provide supporting records. Formal appeal rights, including a Collection Due Process hearing, generally attach to the later final notice of intent to levy rather than the CP504 itself, but the Collection Appeals Program may also be available. Because the appeal routes depend on which notice you've received, a tax attorney can help confirm what options apply to your case.
Can I qualify for an Offer in Compromise (OIC) after receiving a CP504 notice?
Possibly. An Offer in Compromise lets eligible taxpayers settle for less than the full amount owed when paying in full would create a hardship or the collectible amount is genuinely in question. Eligibility turns on a detailed review of your income, expenses, and assets, and not everyone qualifies. Because the application is document-intensive and the IRS scrutinizes it closely, it's worth discussing your eligibility with a tax attorney before applying.
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This content was written and reviewed by the licensed tax attorneys at Victory Tax Lawyers, LLP. Our attorneys specialize in IRS tax relief and are licensed members of the California State Bar with a nationwide practice.
Last Reviewed: 2026 · Meet Our Attorneys →
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