The team of tax experts at Optima Tax Relief reviews the steps you should take next.
If you receive a CP504 Notice from the IRS, the most important thing you should do is take action. A CP504 is the IRS’s way of letting you know that if your outstanding debt to the IRS isn’t taken care of immediately, the IRS will seize your pending state income tax refund to offset the balance due. The experts at Optima Tax Relief review some of the key questions you may have as a CP504 recipient.
If you are able, pay your outstanding balance in full by the due date stated on the CP504 Notice. You can visit the IRS’ payments page to find out more about your payment options. If that isn’t feasible, you can see if you qualify for an installment plan directly with the IRS, and by doing so, may be able to thwart the IRS’ efforts to seize your pending tax refund.
A CP504 notice can also signify that even more serious consequences – beyond just issuing a levy on your pending tax refund – may be coming if you don’t take action. The CP504 functions as the IRS’ official notice of intent to levy as required by Internal Revenue Code section 6331(d). So, what does that mean for you? It means the IRS may be proactively assessing what other assets you have in your name that they may also levy in order to pay your outstanding balance. These assets can include wages (including commissions and other income sources), bank accounts, personal assets (including your car and home), as well as business assets and social security benefits. Once this levy is in place, the IRS may even issue a revocation of your passport.
If you have received a CP504 from the IRS, contact them immediately to work towards a resolution. The IRS has a number of tools and resources available to help guide delinquent taxpayers through their journey to eliminate their debt to the IRS.