Life gets busy, and sometimes, important notices slip through the cracks. However, you can face serious consequences when you ignore a CP504 notice from the IRS. One day, you might receive a letter stating that the IRS plans to seize your car. Can they do that? Yes, they can.
Potential levies and liens
Ignoring a CP504 notice can result in the IRS placing levies on your assets. A CP504 is a final notice of your unpaid balance after previous notices were sent but not settled. If you ignore this notice, the IRS can freeze your bank accounts, deduct from your wages, and even take your property, including your car. These actions can disrupt your life and create significant financial stress. The IRS uses these measures to collect unpaid taxes, and they have the legal authority to do so.
Impact on credit and assets
The IRS can issue a tax lien, which has serious financial consequences. Although it no longer impacts credit score, a lien makes obtaining loans, mortgages, or even renting an apartment difficult. It attaches to all your assets, including real estate, personal property, and financial assets. This lien remains until you pay your tax debt in full, making it crucial to address the issue promptly.
Taking immediate action
Dealing with a CP504 notice right away is essential. Ignoring it worsens the situation. You have several options to resolve the issue, such as:
- Paying the total amount
- Setting up an installment agreement
- Applying for an offer in compromise
Seeking advice from tax professionals can provide you with the best course of action. They can help you navigate the complexities of tax law and find a solution that works for you. Do not wait until the IRS takes drastic measures. Address the issue now and seek professional help to resolve your tax debt.
