IRS CP504 Notice of Intent to Levy: What It Means and What to Do

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Jessica Gonzalez, CPA | Published October 4, 2026

A CP504 is the IRS’s notice of intent to levy. It usually arrives after earlier balance-due notices, like the CP14, went unpaid. Of the three notices I’ve written about, this is the one that calls for the quickest action.

Take it seriously, but don’t panic. A CP504 is urgent, and it is also not the last step. You still have options, and the sooner you use them, the more of them you keep.

What the CP504 notice means

The IRS says the CP504 is your Notice of Intent to Levy under Internal Revenue Code section 6331(d). It means the IRS still shows an unpaid balance and hasn’t heard from you.

The notice warns that the IRS can levy your income and bank accounts and seize property, including your state income tax refund. It also says the IRS can file a Notice of Federal Tax Lien if it hasn’t already. A lien is a public notice to your creditors that the IRS has a right to your interests.

The CP504 also explains the possible denial or revocation of a U.S. passport for seriously delinquent tax debt. And the cost of waiting goes up: if you don’t pay within 10 days after a notice of intent to levy, the failure-to-pay penalty increases to 1% per month.

What it doesn’t mean yet

A CP504 is not the final warning for most levies. According to the IRS, “the IRS cannot levy with just this notice.” The state tax refund is the notable exception, which the IRS can levy without the later 30-day notice.

Here in Texas there’s no state income tax, so many San Antonio clients have no state refund at stake. That can change if you file in another state, for example after a move or for work done elsewhere.

Before most levies, the IRS must send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing, usually Letter LT11 or Letter 1058. The IRS sends it at least 30 days before a seizure.

That final notice gives you 30 days to request a Collection Due Process (CDP) hearing using Form 12153. A timely request generally suspends levy action for the periods you appeal and preserves Tax Court review. Miss it, and you can still request an equivalent hearing within the one-year period on Form 12153, but without Tax Court review.

What to do first

1. Read the notice closely. Confirm the tax years, the balance, and the date to respond.
2. Check that the balance is right. Compare it to your records and your IRS online account.
3. Contact the IRS or pay. The notice says to pay immediately or call the number on your notice. Silence is the costliest choice.
4. Get all returns filed. Payment plans and offers generally require filed returns, so missing returns can block your options.
5. Gather financial information. For hardship status or an offer, the IRS may ask for forms like 433-F or 433-A plus bank and income records.

Your options

Pay in full

If you can, paying the balance ends the collection process. Include the bottom portion of the notice with any mailed payment, or pay online.

Set up an installment agreement

The CP504 says to make a payment plan if you can’t pay in full. Individuals who owe $50,000 or less in combined tax, penalties, and interest and have filed all required returns can apply online. A short-term plan of up to 180 days is available if you owe less than $100,000.

Setup fees range from $0 for short-term plans to higher amounts for long-term plans, with reductions for low-income taxpayers. Interest and some penalties continue while you pay.

Currently not collectible status

If paying anything would keep you from meeting basic living expenses, you can request that the IRS delay collection. The IRS calls this temporarily suspending most collection activities. The debt isn’t forgiven, and penalties and interest keep accruing.

The IRS may still file a lien, apply your federal refunds to the debt, and review your finances periodically.

Offer in compromise

An offer in compromise lets some taxpayers settle for less than the full amount. The IRS looks at your ability to pay, income, expenses, and asset equity.

You must have filed all required returns and made required estimated payments, and you can’t be in an open bankruptcy. The application fee is $205 unless you qualify for low-income certification. The IRS offers a Pre-Qualifier tool to check eligibility first.

Penalty relief

If your history is clean, first-time abate may remove failure-to-file or failure-to-pay penalties. Generally, you need timely filed returns for the prior three years and no penalties in that period, other than the estimated tax penalty.

When a penalty is removed, the IRS reduces the related interest. Reasonable cause is another path if something outside your control caused the problem.

The CP504 also notes you may request an appeal under the Collection Appeals Program before collection action takes place.

One thing my year as an IRS Revenue Agent taught me: the IRS works from the record in front of it. A payment, a filed request, or a documented call gives that record something to act on.

Mistakes to avoid

• Assuming you still have plenty of time. Your state refund can be taken now, and the 1% penalty rate can apply soon.
• Waiting for the final notice to act. The 30-day CDP window is short, and options are easier to set up earlier.
• Offering a payment amount you can’t keep. A defaulted agreement can put you back in collection.
• Ignoring unfiled years. They can block payment plans and offers.
• Emailing your notice or Social Security number. My firm uses the SmartVault secure portal instead.

When to get help

A CP504 is the right time to bring in a professional if the balance is large, you can’t afford the payments the IRS proposes, or you have unfiled returns. The same goes if you think the balance is wrong, perhaps from an unanswered CP2000.

CPAs, attorneys, and enrolled agents have unlimited representation rights before the IRS. You also have the right to retain an authorized representative of your choice. If you face serious financial hardship, the Taxpayer Advocate Service, an independent organization within the IRS, may also help. No outcome is guaranteed.

CP504 FAQ

Can the IRS take my paycheck or bank account right after a CP504?

Generally not yet. The IRS says it cannot levy with just this notice, apart from a state tax refund. A final notice with hearing rights, such as an LT11 or Letter 1058, comes first.

Do I get a hearing?

Not from the CP504 itself. Collection Due Process rights come with the final notice, and you have 30 days from it to request a hearing.

Will a payment plan stop the levy process?

A payment plan is the option the CP504 itself points to if you can’t pay in full. Interest and some penalties continue while you pay, so it ends the escalation, not the cost.

What if I truly can’t pay anything?

Ask about currently not collectible status. You’ll likely need to document income, expenses, and assets. The debt remains, and the IRS may review your situation later.

Does booking a call with you pause IRS collection?

No. Booking a call does not extend any IRS deadline. If your date is close, contact the IRS directly as well.

If a CP504 is sitting on your kitchen table, let’s look at it now. My first IRS notice review is a flat $250, completed within 3–5 business days. I can also prepare your response or represent you before the IRS.

Book a free 15-minute fit call or call (210) 441-1293, and see my IRS notice assistance page. Please don’t email your notice or Social Security number; I’ll send a SmartVault secure portal link. Booking a call does not extend your IRS deadline.

Sources

• IRS: Understanding your CP504 notice
• IRS: Collection Due Process (CDP) FAQs
• IRS: Collection Due Process (CDP)
• IRS Publication 594, The IRS Collection Process
• IRS: Failure to pay penalty
• IRS: Payment plans; installment agreements
• IRS: Online payment agreement application
• IRS: Temporarily delay the collection process
• IRS: Offer in compromise
• IRS: Penalty relief due to first-time abate or other administrative waiver
• IRS: Penalty relief
• IRS Publication 1, Your Rights as a Taxpayer
• IRS: Understanding tax return preparer credentials and qualifications

Related: IRS Notice Help · IRS CP14 Notice · IRS CP2000 Notice