IRS notice decoder
IRS Notice CP504: intent to levy, starting with your state refund
A CP504 is a Notice of Intent to Levy issued under Internal Revenue Code section 6331(d). It demands immediate payment and authorizes the IRS to seize your state income tax refund. It is one step short of the final notice: before the IRS can levy wages, bank accounts, or other property, it must generally send one more letter that carries hearing rights. Treat the CP504 as the loudest warning you will get before that happens.
General information, not tax or legal advice. Deadlines and dollar figures below reflect what the IRS publishes and can change; the controlling dates are the ones printed on your own notice. ClearChoiceRadar is not affiliated with the IRS.
Where you are in the collection sequence
- CP14First bill
- CP501Reminder
- CP503Second reminder
- CP504Intent to levy you are here
- LT11 / CP90Final notice, hearing rights
- LevySeizure possible
What a CP504 can and cannot do
What actually happens from here
If the balance remains unpaid, the IRS can take your state income tax refund and apply it to the debt. The notice also warns of the broader consequences on the path ahead: filing of a Notice of Federal Tax Lien, damage to credit, and eventual seizure of wages, bank accounts, business assets, personal property, and Social Security benefits once the final notice stage is reached.
There is also a penalty mechanic that catches people off guard: if you do not pay within 10 days of a notice of intent to levy, the monthly late payment penalty rate doubles from 0.5% to 1%. The balance starts growing faster at exactly the moment the stakes get higher.
The passport rule
The CP504 references the FAST Act, under which the State Department generally will not issue or renew a passport for someone the IRS has certified as having seriously delinquent tax debt. For 2026 that means legally enforceable tax debt over $66,000 including penalties and interest, where a lien has been filed and remedies have lapsed or a levy has been issued. The threshold adjusts for inflation each year. Certification arrives on a separate notice, CP508C.
The moves that still work
Payment in full stops everything. An installment agreement remains available and generally halts enforced collection while it is in effect; it also puts the late payment penalty back down, to 0.25% per month for individuals who filed on time. If you dispute the debt or the action, the Collection Appeals Program is available before collection action takes place, using the instructions on the notice. And if you cannot pay at all, hardship programs still exist, but they require you to engage rather than wait.
Pick a lane before the final notice
Stop the escalation
An approved installment agreement generally prevents levy while it is active and cuts the monthly penalty rate.
Payment plan options →Challenge or reduce it
Dispute the amount using the number on the notice, or pursue penalty relief for reasonable cause, which shrinks what you owe.
Penalty relief criteria →True hardship
An Offer in Compromise or Currently Not Collectible status can address balances that cannot realistically be paid.
What CNC status means →CP504 questions
Can the IRS take my bank account with a CP504?
Generally not from the CP504 itself. This notice authorizes seizure of your state tax refund. Levying bank accounts, wages, or other property generally requires the IRS to first issue a final notice with a right to a hearing, such as an LT11, Letter 1058, or CP90.
How long do I have to respond to a CP504?
The notice demands payment immediately rather than setting a future due date. There is also a cost to delay: if payment is not made within 10 days of a notice of intent to levy, the monthly late payment penalty rate increases from 0.5% to 1%.
What is the difference between CP504 and LT11?
The CP504 is an intent to levy notice limited in immediate effect to your state tax refund, and it does not carry Collection Due Process hearing rights. The LT11 or Letter 1058 is the final notice that opens the door to levying wages, bank accounts, and other property, and it comes with a 30 day right to request a hearing on Form 12153.
Does a CP504 mean my passport is revoked?
No. Passport certification is a separate process with its own notice, CP508C, and applies to seriously delinquent tax debt over an inflation adjusted threshold, $66,000 for 2026, where a lien has been filed and remedies have lapsed or a levy has been issued. The CP504 warns you about that regime; it does not trigger it by itself.
Can I still set up a payment plan after a CP504?
Yes, and it is usually the fastest way to stop the escalation. An approved installment agreement generally prevents levy action while it is in effect.
Sources: IRS: Understanding your CP504 notice, IRS: Failure to pay penalty, IRS: Passport revocation or denial for unpaid taxes. The deadline that governs your case is the one printed on your notice.
Want help responding to a CP504?
Compare tax relief companies that handle IRS collection matters. Many offer free initial consultations; check individual providers for details.
Compare tax relief companiesWe earn compensation from companies featured on this site. This compensation may influence which companies appear and their placement. Full disclosure