IRS Notice CP504: Intent to Levy - Urgent Action Required

CP504 is the first notice in the IRS collection sequence with real teeth. Here's what changes:

• State tax refund - The IRS can immediately claim your state tax refund
• Legal authority to levy - After required notices, they can seize wages, bank accounts, and other assets
• CDP hearing rights - You have 30 days to request a hearing to challenge the levy or propose alternatives
• Federal payment levy - Certain federal payments can be levied

Critical: CP504 is your last opportunity to request a Collection Due Process (CDP) hearing, which gives you appeal rights and temporarily stops levy action.

The 30-day CDP hearing deadline is crucial. Here's why:

What a CDP Hearing Does

• Temporarily halts collection action while your case is reviewed
• Allows you to propose alternatives (payment plan, OIC, CNC status)
• Gives you the right to appeal to Tax Court if you disagree with the outcome
• Forces the IRS to verify the tax is actually owed

How to Request a CDP Hearing

File Form 12153 (Request for a Collection Due Process Hearing) within 30 days of the date on your CP504. Mail it to the address on your notice. Keep a copy and send it certified mail.

What If You Miss the 30-Day Deadline?

You can still request an "equivalent hearing" within one year, but you lose Tax Court appeal rights and collection isn't automatically halted.

You have several options to prevent asset seizure:

1. Pay the balance in full - Immediately stops all collection
2. Set up a payment plan - Installment agreements stop levy action
3. Request Currently Not Collectible status - Proves you can't pay anything
4. Submit an Offer in Compromise - Proposes settling for less
5. Request a CDP hearing - Temporarily halts collection while you negotiate
6. File for bankruptcy - Automatic stay stops most collection (extreme option)

The key is taking action before the deadline. Once levy authority is established, stopping it becomes harder.

After proper notice, the IRS has broad authority to seize:

• Bank accounts - Can take the entire balance (one-time levy)
• Wages - Continuous levy until debt is paid or released
• State tax refunds - Automatically intercepted
• Federal payments - Social Security (up to 15%), federal contractor payments
• Accounts receivable - Money owed to you by others
• Real property - Homes, land (rare, requires additional approval)
• Personal property - Vehicles, equipment

Protected from levy: Unemployment benefits, certain disability payments, workers' compensation, minimum exempt amount of wages, school books, and necessary clothing.