The IRS is notorious for its complicated forms, many of them with inscrutable names. One of the most intimidating IRS forms to receive in the mail is labeled “Notice CP504.”
Also known as a Final Notice or Notice of Intent to Levy (Internal Revenue Service Section 6331(d), this letter is meant to inform you that, because you have an unpaid balance, the IRS is preparing to take your money by other means.
How can the IRS get your money?
The IRS has the power to take your money by garnishing your wages or Social Security benefits, levying your state income tax refund or even seizing your bank accounts, business assets and personal assets. It could even seize your home and car..
In addition to the CP504, the IRS can also send the taxpayer a Notice of Federal Tax Lien. Having a lien against your property can hurt your credit rating and make it difficult to sell certain assets.
And the IRS has other ways to pressure the delinquent taxpayer as well. It can even prohibit the State Department from issuing or renewing a passport to some taxpayers who owe unpaid taxes.
What are your options?
If you are in the unhappy situation of receiving a CP504 Notice, you have options, but you must act quickly.
If you are unable to pay your outstanding debt immediately, you may be able to negotiate an alternative way to pay your balance, such as through an installment plan. You can also dispute the amount at issue. In either case, it is wise to seek out advice from professionals with experience in tax law.