A taxpayer will receive a CP504 Notice (Intent to Levy) as a final reminder that they have outstanding taxes due to the IRS. The CP504 notice generally follows other attempts by the IRS to communicate with a taxpayer and settle a tax issue.

A CP504 Notice informs a taxpayer that, if the IRS doesn't receive any outstanding taxes, the IRS will begin seizing assets such as wages, bank accounts, state tax refunds, and other property. The IRS may also file a Notice of Federal Tax Lien.

A federal tax lien notice is to inform creditors and others that the IRS has a right to a taxpayer's current or future assets. This lien can also affect a taxpayer's ability to get credit.

For businesses, a CP504 Notice can be doubly stressful because it raises the possibility of seizing crucial assets that could force a company to shut down. The good news is that a CP504 Notice is a warning of what could happen, meaning a taxpayer still has time to shift course.

Preventing Asset Seizure

CP504 Notices will include a date by which the taxpayer must communicate with the IRS. For a business, the best way to prevent a tax seizure that could put a company out of business is to communicate with the IRS.

That a taxpayer is unable to pay their outstanding tax debt won't, on its own, prevent a tax seizure. If a taxpayer is communicating with the IRS to find a resolution to their tax issue, however, that is more likely to prevent a tax seizure.

Taxpayers can avoid a seizure through one of the following options:

·        Pay the full amount due

·        If they disagree with the amount due, contact the IRS

·        Set up a payment plan

·        Review payment options

·        Under the Collection Appeals Program (CAP), request an appeal

The key is that all of these options must be done before the deadline on the CP504 Notice.

Don't Fight the IRS Alone

If you have questions about avoiding tax seizures and understanding options for handling outstanding tax debts, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.