If you've been receiving letters from the Internal Revenue Service (IRS) about unpaid taxes, then getting one more letter may not seem to matter all that much. But a CP 504 letter is qualitatively different from any previous letters you've received. And you should respond as soon as possible if you've received one. Let's explain why.
The goal of previous letters has been to let you know that you had unpaid taxes and to ask you to pay the amount due. But the other letters gave you a period of time to respond and pay the amount.
Your Final Notice
By contrast, CP 504 letter is a final notice. The letter notifies you of the unpaid taxes, but there's no remaining grace period for you to pay the amount. Instead, the amount must be paid immediately.
Furthermore, the CP 504 notifies you that the IRS will start levying (i.e., taking) assets they know about—such as bank accounts and salaries, and the IRS is going to start searching for additional assets that they can levy to pay the amount. And the IRS can file a Notice of Federal Tax Lien (if it hasn't already done so) to notify your creditors that it has a lien on your property.
In other words, the CP 504 is the last warning you'll get before the IRS takes any action against you—and it can do so at any time.
However, all of that still doesn't mean that you are out of options.
What Can I Do?
You can always pay the taxes due to halt the proceedings. If you cannot pay them, you can pay part of the amount or work out a payment plan. And you can see if the IRS will negotiate and reduce the outstanding debt. You can still challenge the amount if you've already paid it or if there's another reason why you don't believe you owe the amount the IRS is demanding.
The key here is that you need to act. Not acting means the IRS will act.
But you don't have to do anything on your own. You can get an attorney to help you—everything from reviewing your liability to talking to the IRS for you. If you need help, 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.
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