A CP504 is the IRS's formal Notice of Intent to Levy. A levy is a legal seizure of your money or property to pay a tax debt. The IRS sends a CP504 when earlier bills went unpaid. This notice lets it take your state tax refund. It is serious, but it's not the last step before your paycheck or bank account is touched. In most cases the IRS must send one more notice, with the right to a hearing, before it levies those. You still have time to set up a payment plan, and that is usually the simplest way to stop collection here.
Why you got a CP504
The IRS sends a CP504 because it hasn't received payment of your unpaid balance after earlier notices such as the CP14, CP501 and CP503. The Taxpayer Advocate Service (TAS), an independent office within the IRS, notes it's also called the "Final Notice" in this series of reminders.
What the CP504 says
The notice includes:
- The amount you owe, including penalties and interest added so far.
- A demand to pay immediately.
- A statement of what the IRS can levy. The IRS says it can levy your state income tax refund and will begin searching for other assets.
- Lien information. The IRS may file a Notice of Federal Tax Lien if it hasn't already.
- Passport information. It explains that the State Department generally can't issue or renew a passport for someone with seriously delinquent tax debt. See CP508C.
- Appeal rights under the Collection Appeals Program, with Publication 1660 and Publication 594 enclosed.
Here's what the IRS can do after a CP504, and what it usually still has to do first:
| Action | Can happen after CP504? |
|---|---|
| Levy your state tax refund | Yes. TAS says this can happen if payment isn't received within 30 days of the notice date. |
| File a Notice of Federal Tax Lien | Yes, if not already filed. You'd receive Letter 3172 with hearing rights. |
| Levy wages, bank accounts, Social Security or other property | Generally only after a final notice with Collection Due Process (CDP) rights, such as an LT11 or Letter 1058 or CP90/CP297, unless you already received one. |
| Federal contractor or disqualified employment tax levies | These are exceptions that can come without a pre-levy hearing notice (Publication 594). |
The IRS Independent Office of Appeals puts it directly in its CDP FAQs: the IRS cannot levy with just a CP504, and the formal final notice comes next.
What to do
- Read the notice and check the balance. Compare it with your IRS Online Account and your own records.
- If you can pay, pay now. Use IRS.gov/payments or mail a check payable to the "United States Treasury" with the payment stub.
- If you can't pay in full, pay what you can and set up a plan right away. The IRS calls the Online Payment Agreement tool the fastest way to get an installment agreement approved. Individuals can use it if they owe $50,000 or less and have filed all required returns. You can also call the number on the notice. Publication 594 says the IRS can't issue a new levy while a payment plan is pending or in effect.
- If you disagree with the amount, call the toll-free number on the notice with your documents. The Appeals FAQs list other routes: pay and file a refund claim, request audit reconsideration if you have new information, or file an offer in compromise based on doubt as to liability.
- If you disagree with the proposed levy, you can request a Collection Appeals Program (CAP) review by sending Form 9423, Collection Appeal Request, to the address on the notice. CAP decisions are quicker, but you can't take them to court.
- If you've already paid or set up a plan, call anyway so the IRS can confirm your account reflects it.
If paying would leave you unable to cover basic living expenses, tell the IRS. It can't levy property if it agrees the levy would cause economic hardship, and it can place your account in currently not collectible status. An optional lien and levy response package is available on this site, but it isn't required.
What happens if you ignore it
- Your state refund can be taken. Then the IRS may send a notice giving you the right to a hearing before the IRS Independent Office of Appeals, if you haven't already received one.
- A final notice of intent to levy follows. That's an LT11/Letter 1058 or CP90/CP297, which gives you 30 days to request a Collection Due Process hearing.
- After that, the IRS can levy wages, bank accounts, business assets, personal assets including a car or home, retirement accounts and Social Security benefits. See IRS levy and wage garnishment.
- A lien may be filed, which can make it hard to sell or borrow against property. See federal tax liens.
- The failure-to-pay penalty can double. The IRS says that if you don't pay within 10 days after getting a notice of intent to levy, the penalty rises from 0.5% to 1% per month, up to a 25% cap.
On $10,000 of unpaid tax, the failure-to-pay penalty is $50 a month at the regular 0.5% rate. At the 1% rate that applies after a levy notice, it's $100 a month. With an approved payment plan (and an on-time return), an individual's rate drops to 0.25%, or $25 a month. Interest is added on top in every case.
Is this notice real?
Scammers like to use the word "levy." Check by signing in to your IRS Online Account, where a real balance and notice will appear, or call the IRS at a number on IRS.gov. The IRS doesn't demand payment by gift card, prepaid card or wire, and it doesn't threaten to have you arrested. Pay only through IRS.gov/payments or by check to the "United States Treasury." More tips: how to spot IRS scams.
Frequently asked questions
Can the IRS take my paycheck after a CP504?
Usually not yet. According to IRS Appeals, the IRS can't levy wages with just a CP504. It must first send a final notice of intent to levy with your right to a Collection Due Process hearing. The exceptions are a state refund levy and a few special cases, such as federal contractor levies.
Can I request a Collection Due Process hearing now?
Not from a CP504. CDP rights come with the final notice (such as an LT11) or a lien filing notice (Letter 3172). The IRS says you don't need to wait for the final notice, though. It's in your interest to call now and work out payment.
Does setting up a payment plan stop a levy?
Generally, yes. Publication 594 says the IRS can't issue a new levy while you have a current or pending payment plan. Make sure every new return is filed and paid on time, or the plan can default.
Will this affect my passport?
It can if your debt becomes "seriously delinquent." For 2026, that means more than $66,000 in assessed tax, penalties and interest, where the IRS has either filed a lien and your appeal rights have run out, or issued a levy, according to the IRS. Debts being paid under an approved plan aren't certified.
Sources
- Internal Revenue Service (IRS), "Understanding your CP504 notice". irs.gov
- Taxpayer Advocate Service, "Notice CP504". taxpayeradvocate.irs.gov
- IRS Independent Office of Appeals, "Collection due process (CDP) FAQs". irs.gov
- IRS, Publication 594, The IRS Collection Process (Rev. 1-2026). irs.gov
- IRS, Publication 1660, Collection Appeal Rights. irs.gov
- IRS, "Failure to pay penalty". irs.gov
- IRS, "Revocation or denial of passport in cases of certain unpaid taxes". irs.gov
IRSV.com is an independent guide and is not affiliated with the IRS. This page is general information, not tax or legal advice. Rules change; confirm details on IRS.gov or with a tax professional. Found an error? Tell us.