IRS Notice CP504

The client has entered into an installment agreement or submitted an Offer in Compromise. There are many reasons this can happen, from multiple red flags on your returns like an over-use of “employee business expenses,” for example,to just random selection because you’re self-employed. You can manage this appointment yourself, or hire us (or any licensed tax professional) to be there and represent you during the audit. ●    CP49—You owed a tax debt, and the IRS has applied your refund to that debt. No response is typically necessary unless you believe that the IRS has made an error and wish to contest the seizure of your refund. Now—why has the IRS notified you, and what should you do next?

• However, if there is no response or the tax debt has not been fully resolved, the IRS will issue a Notice CP504 Notice of Intent to Seize (Levy) Your Property or Rights to Property.
• Taxpayers who receive a CP504 Letter must follow IRS rules and procedures to prevent a tax lien from being filed and levies from being issued.
• Limits also exist for expense categories, including housing, clothing, and transportation.
• Below are sample letters from clients, along with plain-English explanations of what’s happening in each case.

You can, however, request an appeal under the Collection Appeals Program (CAP) before the collection takes place. Read your CP504 notice carefully and keep a copy for your records. The notice will explain how much you owe, including penalties and interest. You have 30 days from the date of the notice to pay your balance in full or make payment arrangements. As of 2022, the IRS only levies state and local refunds from personal income tax returns, but the agency may alter the rules and start to claim business refunds in the future.

Is it from the IRS?

Typically, the IRS will send you a CP504 Notice via Certified Mail. To meet strict requirements under the tax law, the agency has to mail the letter to your “last known address”. This is usually the mailing address listed on your last tax return. Usually, the IRS gives you thirty (30) days to take corrective action when noticed with a CP504 form. By the time you receive a CP504 notice, though, your payment is technically past due.

This has been a general overview of some common IRS notice types, but we’ve only scratched the surface. If the notice you received doesn’t appear on this list, or you’re unclear about whether you have a case to dispute the notice you’ve received, we advise you to speak to a tax professional right away. This notice should include the amount of the unpaid balance, a due date, and a penalty/interest schedule if the outstanding balance isn’t paid on time. If you and your advisors review your records and determine that the IRS is wrong, you can dispute the notice within 60 days. Consequently, the IRS must issue a final notice of intent to levy at least 30 days before the levy occurs (assuming the collection of the taxes at issue is not in jeopardy). If you want help talking with the IRS, negotiating a payment plan, or appealing the amount you owe, you should contact a tax professional.

Expert Tax Attorneys

●    CP90/CP504—The IRS intends to seize your property for unpaid taxes. The IRS sends CP90 and CP504 via certified mail, after previous notices about unpaid taxes have gone unanswered. Taxpayers who can’t pay their total balance may ward off the seizure by creating a payment plan or applying for an offer in compromise.

• A tax debt professional can deal with the IRS for you and take immediate action to help you address your tax debt.
• Please have your paperwork (such as cancelled checks, amended return, etc.) ready when you call.
• The IRS is now moving forward with placing a tax levy on your property.
• Consequently, the IRS must issue a final notice of intent to levy at least 30 days before the levy occurs (assuming the collection of the taxes at issue is not in jeopardy).
• This notice or letter may include additional topics that have not yet been covered here.

You may not be able to stop the IRS from taking your tax refund, but if you act quickly, you can stop the IRS from levying other assets, seizing your passports, or taking other serious collection actions. Contact us to help ensure you are following proper procedures correctly and you have taken the appropriate steps to avoid further liability and aggravation. You can also apply for a payment plan online by using the Online Payment Agreement Tool which is the fastest way to get an installment agreement approved. A tax debt professional can deal with the IRS for you and take immediate action to help you address your tax debt.

What to Do If You Receive Notice CP504

IRS Notice CP504 alerts you that the IRS intends to seize your state tax refund. It also states that the IRS may “levy your property or rights to property and apply it” to the balance you owe. Low Income Taxpayer Clinics (LITCs) are independent from the IRS and TAS. LITCs represent individuals whose income is below a certain level and who need to resolve tax problems with the IRS.

• Your attorney can also assist you with the preparation of a penalty abatement request.
• WATAX has lots of experience constructing compelling offers that get accepted by the IRS, so please get a hold of us if you’d like to greatly improve your odds of getting your offer accepted.
• For more information or to find an LITC near you, see the LITC page on the TAS website or Publication 4134, Low Income Taxpayer Clinic List.
• He was very knowledgeable, professional, explained things in easy to understand terminology & was very easy to discuss our tax issues with.

It is also telling you that we will begin searching for other assets on which to issue a levy. To avoid this, you must pay the amount you owe immediately. If you’ve owed a balance to the IRS that you haven’t paid, they’ll eventually attempt to seize funds from any legitimate source of income. The CP504 or more recently the LT-11 and LT-16 letters – while intimidating https://kelleysbookkeeping.com/irs-form-4562-instructions/ – are still fairly early in the collection process and let’s us know that the collection process has begun. If you did nothing after getting these letters, you would probably receive a levy on bank accounts or wages in about 90 days. On top of that, penalties and interest on your unpaid amount will continue to accrue until the balance is paid.

If you don’t agree with Notice CP504 for any reason, you should contact the IRS at the number on the letter, or you should call a tax specialist from our directory. To request an appeal under the Collection Appeals Program (CAP), call the IRS directly or send Form 9423 (Collection Appeals Request within 30 days of receiving the notice. Through the Municipal Tax Levy Program (MTLP), the IRS can also levy refunds from your city or municipal tax program.

If you decide not to go to Tax Court, you can expect to pay what you owe the IRS or plan to negotiate with your tax professional on what you owe thru the IRS collection branch. On another note, you can still What Should You Do If You Receive An Irs Cp504 Form? dispute your Audit even if you choose not to go to Tax Court by doing an Audit Reconsideration. Maybe you forgot, maybe you’ve put it off, or maybe you never knew you owed additional taxes to the IRS.

The IRS will mail this letter to your last known address, which is generally the mailing address on your last tax return that was filed. If you disagree with, or if you can’t full pay, the CP504 Notice, the IRS must be immediately contacted and informed of your position and intentions. The IRS is also required to assess penalties and interest against you for the unpaid tax. Additionally, a Notice CP504 can result in the denial or revocation of your United States Passport per the Fixing America’s Surface Transportation (FAST) Act legislation.

• This notice means the government will find a way to forcibly take what is owed by searching for recoverable assets as payment.
• Use our site to contact a tax pro to learn what the best actions are for your situation.
• The IRS needs to be informed in a timely manner that you will be making arrangements to pay your tax debt under the guidelines and criteria made available by the Tax Code.
• This notice informs the taxpayer that the IRS has recalculated their taxes using the information from the third-party source, which may result in a higher tax bill or a refund.

Our firm is where clients turn when the stakes are high and the issues are complex. The tax resolution companies referenced herein are not law firms nor are such representations being made. They may or may not have a specialized degree in taxation or be individually licensed in your particular state. Before seizing other assets, the IRS will typically send an additional notice notifying you of your right to request a Collection Due Process hearing. However, if the IRS has already sent this notice, it can seize your assets sooner.

You also might be in danger of the IRS filing a Notice of Federal Tax Lien on your property, interfering with your full rights to your property, and hindering your ability to sell or borrow against the property. These tax liens can affect your credit score, notify creditors of your obligation to the IRS, and place at stake your professional licenses. When the IRS sends you a CP504 notice, the government entity satisfies a legal requirement to give you notice of its intent to levy as necessitated by Internal Revenue Code section 6331(d). This notice means the government will find a way to forcibly take what is owed by searching for recoverable assets as payment.