A CP504 arrives after the earlier reminders, and its list of what the IRS can seize is hard to read calmly. Here is what it allows right now, what has to happen next, and how to use the time you have.
IRS Notice CP504: Can the IRS Take Your Money Now?
By Damian Gerry on LinkedIn (opens in a new tab), Founder
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In most cases, a CP504 does not let the IRS take your paycheck or empty your bank account yet. If you do not pay or call within 30 days of the notice date, the IRS can levy your state tax refund, but before it levies wages or a bank account it generally must send one more letter: the final notice that gives you the right to a Collection Due Process hearing.
That still makes the CP504 serious. It is the last reminder before the IRS can start enforced collection, so the next 30 days are the best time to act.
What a CP504 is
The CP504 is a Notice of Intent to Levy under Internal Revenue Code section 6331(d). It usually arrives after earlier reminders, such as the CP501 and the CP503 (the IRS calls the CP503 your second reminder). The law requires this kind of written notice at least 30 days before a levy, and the CP504 is how the IRS gives it.
The notice lists what the IRS counts as property or rights to property: wages, real estate commissions and other income, bank accounts, personal assets such as your car and home, and Social Security benefits. Seeing that list is frightening, but the notice itself explains that, in most situations, a hearing notice comes first.
CP504 compared with the final notice
The final notice is the LT11 or Letter 1058, titled Final Notice of Intent to Levy and Notice of Your Right to a Hearing. Here is how the two letters differ.
| Question | CP504 | LT11 or Letter 1058 |
|---|---|---|
| Legal basis | IRC 6331(d) notice of intent to levy | IRC 6330 notice of your right to a hearing |
| What the IRS may levy after 30 days | Your state tax refund (plus two levy types that mostly affect businesses) | Wages, bank accounts, and other property |
| Your appeal right | Collection Appeals Program: call or send Form 9423 within 30 days of the notice date | Collection Due Process hearing: file Form 12153 within 30 days |
| Effect of appealing | Request it before the collection action takes place | The IRS suspends levy action during the appeal |
One caution: the CP504 says the IRS will send a hearing notice first "unless we have already issued one to you." If you already received an LT11 or Letter 1058 for the same tax year, a levy on wages or a bank account may come without another warning.
"In most other situations, before we levy on your property or rights to property, we'll send you a notice that gives you the opportunity to request a Collection Due Process hearing, unless we have already issued one to you."
Internal Revenue Service, in its sample Notice CP504
What to do in the next 30 days
Each option below depends on your situation and on the IRS accepting it.
- Pay in full. This ends the matter and stops more interest and penalties from building.
- Set up a payment plan. Individuals who owe $50,000 or less in combined tax, penalties, and interest, and have filed all required returns, can apply online for a long-term plan. If you owe less than $100,000, a short-term plan gives you up to 180 days.
- Ask about currently not collectible status. If paying would leave you unable to cover basic living expenses, the IRS may pause most collection. You still owe the balance, penalties and interest keep growing, and the IRS may ask for a financial statement such as Form 433-F.
- Look into an Offer in Compromise. An offer may let an eligible taxpayer settle for less than the full balance. You must have filed all required returns and not be in an open bankruptcy, and the application fee is $205.
- Dispute the balance. If you think the amount is wrong, call the number on your notice. The notice says the IRS will assume you agree if it does not hear from you.
If you do nothing, the IRS may also file a Notice of Federal Tax Lien, and interest and penalties continue.
Online payment plan setup fees (as of March 2026)
| Plan type | Setup fee |
|---|---|
| Short-term plan (180 days or less), individuals | $0 |
| Long-term plan with direct debit | $29 (waived for low-income taxpayers) |
| Long-term plan with other payment methods | $69 ($43 for low-income taxpayers, which may be reimbursed) |
When the IRS can levy before offering a hearing
Section 6330(f) lists four exceptions to the pre-levy hearing notice: a levy on a state tax refund, a jeopardy levy (when collection is at risk), a Disqualified Employment Tax Levy, and a Federal Contractor Levy. In each case, the IRS must offer a Collection Due Process hearing within a reasonable time after the levy. The state refund exception is the one most individuals meet, and it is why the CP504 names your state refund.
If a levy notice does follow
If you receive an LT11 or Letter 1058, file Form 12153 within 30 days to keep your hearing rights. If a bank levy does happen later, the bank holds the funds for 21 days before sending them to the IRS, which is time to call.
If you also owe California, the state follows its own rules; our guide on what to do when the FTB freezes your bank account walks through that timeline. If you would rather not handle the IRS call alone, here is how we help with wage garnishments and bank levies, starting with a free, confidential review.
Frequently Asked Questions
Can the IRS levy my bank account right after a CP504?
Usually not. After the CP504's 30 days pass, the IRS can levy your state tax refund. Before levying a bank account or wages, it generally must send a Final Notice of Intent to Levy and Notice of Your Right to a Hearing (LT11 or Letter 1058) at least 30 days ahead, unless it already sent one for that tax year.
Can I still set up a payment plan after getting a CP504?
Yes. The CP504 itself points you to payment plans. Individuals who owe $50,000 or less in combined tax, penalties, and interest and have filed all required returns can apply online for a long-term plan, and those who owe less than $100,000 can apply for a short-term plan of up to 180 days.
Does a CP504 give me Collection Due Process rights?
No. The CP504 offers an appeal under the Collection Appeals Program, which is a different program. Collection Due Process rights come with the LT11 or Letter 1058, and you request that hearing on Form 12153 within 30 days.
Sources: IRS, Understanding your CP504 notice; IRS, Sample Notice CP504; IRS, Understanding your CP503 notice; IRS, Understanding your LT11 notice or Letter 1058; IRM 5.11.1; 26 U.S.C. 6330; 26 U.S.C. 6331; IRS, Levy; IRS, Payment plans; IRS, Temporarily delay the collection process; IRS, Offer in Compromise.
