Educational notice: This page provides general information about the CP504 notice. It is not tax advice and is not affiliated with or endorsed by the IRS.
CP504 Notice Explained: What It Means and What Usually Happens Next
A CP504 notice is an IRS letter that says you have an unpaid tax balance and the IRS intends to levy your state tax refund if the balance is not addressed.
This page explains what a CP504 notice is, why people commonly receive it, how serious it is, and what typically happens next — in plain English, without IRS jargon.
What Is a CP504 Notice?
A CP504 notice is officially titled “Notice of Intent to Levy — State Tax Refund”. It is usually sent after earlier IRS balance-due letters have gone unanswered.
The key point is this: At the CP504 stage, the IRS is warning that it may take your state tax refund. It is not yet a wage levy or bank levy.
Takeaway: CP504 means the IRS is escalating, but it is still a warning stage.
Why Did I Get a CP504 Notice?
Most people receive a CP504 notice because an earlier balance due was not resolved. This does not automatically mean you ignored the IRS — mail delays, address changes, or simple confusion are very common.
Common reasons include:
- A tax balance from a prior year remains unpaid
- A return was filed but the balance was not paid in full
- The IRS adjusted a return and assessed additional tax
- Previous notices (such as CP14, CP501, or CP503) were missed
Takeaway: CP504 is usually not the first notice — it’s part of a sequence.
How Serious Is a CP504 Notice?
A CP504 notice is considered serious, but it is often misunderstood.
What it does mean:
- The IRS is actively pursuing collection
- Your state tax refund may be taken
- The account is moving closer to enforced collection
What it does not mean:
- Your wages are being garnished right now
- Your bank account is frozen
- You are being audited
Takeaway: CP504 is a warning sign, not the final step.
What Usually Happens After a CP504 Notice?
If a CP504 notice is not resolved, the IRS often sends a Final Notice of Intent to Levy, commonly known as an LT11 or similar letter.
That later notice is important because it typically includes formal appeal rights and is closer to actual levies on wages or bank accounts.
Not everyone receives the same follow-up notices, and timing can vary. However, CP504 is generally one of the last warning letters before more serious action.
Takeaway: CP504 is often followed by a final levy notice if nothing changes.
Does a CP504 Give You Appeal Rights?
Yes. A CP504 notice states that you may have the right to request a Collection Due Process (CDP) hearing.
The deadline is usually 30 days from the date on the notice. Missing this deadline may limit your options later.
The letter itself explains where and how a hearing request may be submitted.
Takeaway: The timeline matters with CP504 letters.
Common Misunderstandings About CP504 Notices
- “This means they are taking my paycheck.” Not yet. CP504 focuses on state tax refunds.
- “This means I did something criminal.” CP504 is a civil collection notice, not a criminal accusation.
- “Ignoring it will make it go away.” Ignoring IRS letters usually leads to escalation, not resolution.
Takeaway: CP504 is stressful, but panic is usually based on misinformation.
Helpful Related Pages
- How IRS letters usually progress
- Browse all IRS letter explanations
- Frequently asked questions about IRS letters
Frequently Asked Questions About CP504 Notices
Is a CP504 notice the final IRS warning?
No. CP504 is usually followed by a final notice, such as an LT11. That later letter is closer to actual levy action.
Can the IRS take my state tax refund after a CP504?
Yes. CP504 specifically warns that the IRS may levy your state tax refund if the balance remains unresolved.
Does CP504 mean my bank account will be levied?
Not at this stage. Bank levies usually come after a final notice of intent to levy.
Is a CP504 the same as an audit?
No. CP504 is a collection notice, not an audit or examination.
Should I talk to a professional about a CP504?
If you need advice specific to your situation, a licensed tax professional (EA, CPA, or attorney) can review your case and explain your options.
This page is for general educational purposes only and does not provide tax or legal advice. WhatThisIRSLetterMeans.com is not affiliated with the IRS or any government agency.