If you’ve received a CP504 Notice from the Internal Revenue Service (IRS), you can’t afford to ignore it. This letter, which confirms that you have an amount due on your account, serves two purposes:
- A reminder that the IRS has not received payment of your outstanding tax balance
- A warning that if you don’t pay immediately or reach out to make payment arrangements, the IRS may levy your income and bank accounts and seize your property (including your state income tax refund) to pay your tax liability.
In general, the IRS sends the following notices before you receive a CP504:
- CP14 and/or CP501: You have taxes due on an account.
- CP503: The IRS has not heard from you and your account is still unpaid.
If you don’t respond to the CP504, you will receive a CP90, LT11, or Letter 1058, which is a Final Notice of Intent to Levy and Notice of Your Right to a Hearing.
The CP504 Notice- an Overview
The CP504 Notice indicates the amount of tax due and the due date for paying it. It may also indicate interest charges and a failure to pay penalty, both of which are added to the tax debt and may accrue until you make the payment. On the left-hand side of the letter, the IRS warns that failure to pay or respond may result in a levy or seizure of your property.
Property subject to seizure includes but may not be limited to:
- Income such as wages, commissions, bonuses, and Social Security benefits
- Personal and business bank accounts
- Personal and business assets
Many taxpayers receive this notice because they’ve been too worried or stressed to respond. They know they can’t afford to pay their tax balance, so they ignored the preceding letters. If you don’t take action immediately after getting a CP504, you may face an even more stressful situation.
What to Do After Receiving a CP504
If you receive a CP504, you need to act immediately. Your response deadline will be on the notice. If you do not respond by that due date, you may face a tax levy on your property and accounts. As soon as you receive an IRS notice, contact an MN tax attorney to learn more about your rights and options.
What if You Can’t Pay the Balance?
You may be able to work out a payment plan if you are unable to pay the entire amount. Online payment plans and installment agreements are both possibilities, and an Offer in Compromise may help you settle a tax debt for less than what you owe. If the IRS accepts your offer, you will be able to pay less than the full amount through a lump-sum payment or periodic payment plan.
What if You Don’t Agree With the Notice?
Regardless of whether you agree or disagree with the tax notice, you must respond immediately or face a seizure order. A Minnesota tax attorney can assist you in dealing with the IRS, challenging incorrect assessments, or negotiating a lower tax bill.
Do You Have Questions About Your CP504 Notice?
If you receive a CP504 Notice in MN, you should consult with Pridgeon & Zoss, PLLC regarding your legal rights. We can help you protect your money and assets by negotiating more affordable payment arrangements with the IRS or even arranging to settle your tax debt for a lower amount. For more information or to schedule a consultation, contact us today.
