I received an IRS CP504 notice. What happens next?

What a CP504 actually says

The letter shows the tax year, the balance with penalties and interest to date, and a due date, usually 30 days from the date printed at the top. Below that, the IRS states that if you do not pay, it intends to levy your state income tax refund and may look for other property. It usually comes after a first bill (CP14) and reminder notices (CP501 and CP503).

Read the date on the notice first. Almost everything that follows runs from that date, not from the day the envelope reached you, so check the specific deadline printed on your notice and the hearing rules that apply to it.

Can the IRS levy my bank account or wages after a CP504?

After the due date on a CP504, the IRS can levy a state tax refund you are owed and apply it to the balance. For most other assets, including bank accounts and wages, the IRS generally must first send a final notice of intent to levy that carries the right to a Collection Due Process hearing, usually an LT11 or a Letter 1058, and then wait 30 days.

Do not assume that notice is still to come. It is required only once for each tax and period, so if the IRS already sent one for the same tax year, even a long time ago, it does not have to send another before each levy. The law also lets the IRS levy first and offer the hearing afterward in a few situations: when it believes collection is in jeopardy, for certain employment tax debts, and for federal contractors.

A notice you never saw can still be valid. A final notice generally counts when the IRS sent it by certified or registered mail to your last known address, usually the one on your most recent return, even if you had moved or never picked it up. A notice that was never sent, or that was not sent to your last known address, may be legally defective, and that is a ground to have the levy released. Your account transcript shows which notices were issued and when.

Separately, once a balance is assessed and unpaid the IRS can file a Notice of Federal Tax Lien. And a debt of more than $66,000 in 2026 can be certified to the State Department, which affects passports, once a levy has been issued or a lien notice has been filed and the time to contest it has passed, subject to exclusions, for example when the debt is being paid under a qualifying payment arrangement or you are in hardship status. Neither depends on the CP504, which is one more reason not to wait.

What is the usual timeline after a CP504?

• CP504: 30 days from the date on the notice to respond. After that, a state tax refund can be levied.
• Final notice with hearing rights (LT11 or Letter 1058), if one has not already been issued for that tax year: 30 days to request a Collection Due Process hearing with Form 12153. In most cases a timely request pauses the levy for that year while the appeal is open.
• After that window: the IRS can levy bank accounts, wages, accounts receivable and other assets, and it does not have to warn you again before each levy.

In practice this takes weeks, sometimes months, but the clock is not in your hands. The useful part is that at every stage before the levy, an agreement can generally stop it.

Three moves to make this week

First, check the numbers. Pull your IRS account transcript, or have a representative pull it under a signed authorization. It shows what was assessed, for which years, whether returns are missing, what penalties are running, and which collection notices have already been issued. Notices are usually right about the tax and often misunderstood when it comes to what you can do about it.

Second, decide the track. The main ones are: pay in full, a payment plan, an offer in compromise if you qualify, or a hardship status called currently not collectible if you cannot meet basic living expenses. Each has conditions, and unfiled returns block a payment plan and an offer, so missing returns come first.

Third, respond before the date on the notice. While a payment plan request is pending, the IRS generally cannot levy. Only a complete request counts: it has to identify the debt and propose a specific amount, with the required returns filed and a financial statement when one is needed.

Mistakes I see often

• Ignoring the letter because the balance cannot be paid. The deadline on the notice matters more than the balance.
• Assuming another warning will always come before a levy. The final notice may already have been sent.
• Paying a national company a fee before anyone has read the transcripts.
• Sending a partial payment without an agreement, which changes nothing about the levy timeline.
• Calling the IRS and agreeing on the spot to a monthly amount that will not survive the first slow month.

Every situation is different and results depend on the facts of each case. This guide is general information, not advice on your file. The complimentary 15-minute introductory call is where your facts come in.