IRS Notice CP504: Notice of Intent to Levy

The IRS describes CP504 as its final reminder that it intends to levy because a balance is still unpaid. The notice is legally significant: it satisfies the section 6331(d) notice requirement, which allows the IRS to levy your state tax refund. It also explains that the State Department can deny or revoke a passport for seriously delinquent tax debt.

What a CP504 does not do on its own is authorize a wage garnishment or bank levy. For those, the IRS must also send a Final Notice of Intent to Levy with Collection Due Process rights — the LT11 or Letter 1058 — unless you've already received one.

The IRS asks you to pay the amount on a CP504 immediately. The failure-to-pay penalty rate increases from 0.5% to 1% per month starting 10 days after a notice of intent to levy, so delay is costly. Call the number on the notice right away if you can't pay in full.

If you don't respond, the IRS can file a Notice of Federal Tax Lien, levy any state tax refund, and send the LT11 or Letter 1058 final notice. After the 30-day hearing window on that letter closes, the IRS can levy wages, bank accounts, business assets, and certain federal payments — including up to 15% of Social Security benefits through the Federal Payment Levy Program.

1. Don't wait for the next letter — call the number on the CP504 or use your Online Account today.
2. If you owe $50,000 or less, apply online for a payment plan; an approved plan generally stops levies.
3. If you owe more, prepare Form 433-F or 433-A and your last three months of bank statements and pay stubs.
4. File any missing returns — the IRS won't approve plans with unfiled years.
5. If you can't pay basic expenses, request Currently Not Collectible status.
6. If paying in full would never be possible, evaluate an Offer in Compromise with our estimator.
7. If a levy would cause immediate hardship, contact the Taxpayer Advocate Service.

Read the official IRS explanation: Understanding your CP504.

Ignoring a CP504 lets the IRS escalate on its own timeline. It can take your state refund, file a public tax lien, and send the final levy notice. Once the hearing deadline passes, a wage levy stays in place every pay period until the debt is paid or released, leaving you only an exempt amount based on your standard deduction and dependents (IRS Publication 1494). Bank levies freeze funds on the day they hit; the bank holds them for 21 days and then sends them to the IRS. See wage garnishment and bank levy for how to get a levy released.

Yes. The CP504 explains that under the FAST Act, the IRS can certify seriously delinquent tax debt to the State Department, which generally won't issue or renew a passport. The certification threshold is adjusted for inflation each year. Entering an approved payment plan, having a pending Offer in Compromise, or being in a timely Collection Due Process hearing are among the exceptions that prevent or reverse certification.

The IRS collection notice stream follows a predictable order. Knowing where your letter sits tells you how much time you have and what the IRS is legally allowed to do next.

• CP14 — the first bill. It says you have a balance due and asks you to pay within 21 days.
• CP501 — the first reminder that the balance is still unpaid.
• CP503 — the second reminder. The IRS may file a Notice of Federal Tax Lien if it hasn't already.
• CP504 — Notice of Intent to Levy under IRC section 6331(d). The IRS can now take your state tax refund and warns that wages and bank accounts are next.
• LT11 or Letter 1058 — Final Notice of Intent to Levy and Notice of Your Right to a Hearing. You get 30 days to request a Collection Due Process hearing.

The gaps between letters are usually several weeks, but the IRS does not have to send every letter, and some accounts skip straight from CP14 to CP504. See our overview of all IRS notices for the full list.

Every notice in the sequence can be resolved with the same set of IRS programs. Which one fits depends on how much you owe and what you can realistically pay each month.

• Payment plan (installment agreement): individuals who owe $50,000 or less in combined tax, penalties and interest and have filed all returns can usually set up a Simple Payment Plan online, with no financial statement. The online setup fee is $29 with automatic withdrawals or $69 without.
• Short-term plan: if you can pay within 180 days and owe less than $100,000, there's no setup fee — interest and penalties still accrue.
• Offer in Compromise: settles for less than the full balance only when the IRS agrees you can't pay in full through income and asset equity. The application fee is $205 unless you meet the low-income certification.
• Currently Not Collectible status: pauses active collection if paying would leave you unable to cover basic living expenses.
• Penalty abatement: first-time abatement or reasonable cause can remove failure-to-file and failure-to-pay penalties, which also removes the interest charged on those penalties.

Our tax settlement calculator shows which of these your situation points toward in about a minute.

Doing nothing is the most expensive choice. Interest accrues at the federal underpayment rate — currently 7% a year, compounded daily — and the failure-to-pay penalty adds 0.5% of the unpaid tax per month, up to 25%. Once you're on an approved payment plan (and filed on time), that penalty drops to 0.25% a month. If you ignore a notice of intent to levy, it rises to 1% a month starting 10 days after the notice. Use the penalty and interest calculator to see what waiting costs on your balance.

You can handle most notices yourself by calling the number on the letter or using your IRS Online Account. Consider professional help — an enrolled agent, CPA or tax attorney — if you owe more than $50,000, have several unfiled years, run a business with payroll taxes, or are already facing a levy. If the IRS is causing you financial hardship, the free Taxpayer Advocate Service can step in. Be wary of any company that promises to settle your debt for a fraction of what you owe before reviewing your finances — read how to choose a tax relief company.