Got a CP504? Read this before you panic
I get the CP504 panic call every week.
Someone opens the letter, sees the words "intent to levy," and figures the IRS has already emptied the bank account.
Usually, not yet.
A CP504 is serious. But it's usually not the notice that starts the most important deadline in IRS collections. That one is usually the LT11 or Letter 1058. Knowing which letter you have tells you how much time you have and what to do next.
What a CP504 is
The CP504 is the IRS's Notice of Intent to Levy under section 6331(d) of the tax code. It means you still have an unpaid balance and the IRS is getting ready to collect.
According to the IRS, after a CP504 it can:
levy your state income tax refund,
start searching for other assets to levy, and
file a Notice of Federal Tax Lien, if it hasn't already.
The CP504 also warns that seriously delinquent tax debt can lead to a U.S. passport being denied or not renewed.
What you can do at this stage: pay, set up a payment plan, call if you disagree, or request an appeal under the Collection Appeals Program before collection action takes place.
What an LT11 or Letter 1058 is
The LT11 and Letter 1058 are the IRS's Final Notice of Intent to Levy and Notice of Your Right to a Hearing. After this notice, the IRS can levy your wages, bank accounts and other property.
Here's the key part: you generally have 30 days from the date on this notice to request a Collection Due Process (CDP) hearing. You request it on Form 12153, sent to the address on the notice.
Why that hearing matters:
A timely request generally stops levy action while the hearing is pending.
You can propose a collection alternative, like a payment plan or Currently Not Collectible status.
If you disagree with the result, you can usually take it to the Tax Court.
Miss the 30 days and you can still ask for an "equivalent hearing" within a year. But levies can continue during it, and you lose the Tax Court review.
The ladder, in plain words
Balance-due notices. The IRS asks you to pay.
CP504. "We intend to levy." The state refund is at risk, and the IRS may file a lien.
LT11 or Letter 1058. "Final notice." The 30-day hearing clock is running.
Levy. Wages, bank accounts or other property.
Not every case follows this exact path, and there are exceptions. But it's the most common pattern I see.
Don't trust the headline. Check the details.
Two things I always do first:
Look at the notice date, not the date you opened it. The deadlines run from the date on the letter.
Pull the IRS transcripts. I've seen CP504 balances that looked huge come down to something workable once we found a substitute return the IRS filed or a payment that was applied to the wrong year.
Also, the penalty can get more expensive. If you don't pay within 10 days after a notice of intent to levy, the IRS failure-to-pay penalty generally goes up from 0.5% to 1% a month.
What I do when you send me one of these
Identify exactly which notice you have and the deadline that applies.
If it's an LT11 or Letter 1058 and the 30 days are still open, protect your CDP hearing rights.
Pull transcripts to confirm the balance and find any errors.
Build the right resolution: a payment plan, Currently Not Collectible status, or another option your numbers support.
Short FAQ
Does a CP504 mean my bank account is about to be frozen? Not necessarily right away. The CP504 allows a levy on your state refund and starts the IRS search for other assets. Levies on wages and bank accounts usually come after the final notice (LT11 or Letter 1058).
How long do I have after an LT11 or Letter 1058? Generally 30 days from the date on the notice to request a Collection Due Process hearing.
Can I set up a payment plan after a CP504? Yes. The IRS says you can set one up if you can't pay in full. Doing it now is usually easier than after a levy.
I missed the 30-day deadline. Is it too late? You may still be able to request an equivalent hearing within one year, but levies can continue and there's no Tax Court review.
Got one of these letters?
Book a free 30-minute call to go over your case. For a quick question, you can call (718) 510-3166. Send me the notice and I'll tell you where you stand.
General info, not advice for your specific case. Every case is different.
