If you’re heading out to the trail and come across a warning, it’s probably a good idea to heed that warning. Maybe it has to do with adverse weather conditions, wildlife, or a part of the trail to avoid due to certain hazards. If you ignore the warning, you could find yourself in a bad situation, whether it’s legal trouble or physical peril.
Taxes are similar in that the IRS usually sends warnings before taking more serious actions. These include using a levy to garnish your wages or take money directly from your bank account. One such warning is CP504 or Notice of Intent to Levy. If you have any unpaid taxes with the IRS and receive a CP504, the Highland Tax Group can help.
Reasons for Receiving a CP504 Notice
The IRS sends CP504 notices to taxpayers who have not made payments to address unpaid balances. If you receive a CP504, you likely ignored or failed to respond to previous notices informing you of unpaid balances on one of your tax accounts. This is your final notice to pay; the IRS will provide no further courtesies or warnings about unpaid balances.
You still have options, but CP504 notices signal that the IRS is done waiting. They may already be taking steps to levy your income and bank accounts. Your notice will detail the exact amount you must pay to avoid this fate and provide basic guidance on payment options.
The Urgency of a CP504 Notice
The IRS requires those receiving a CP504 notice to immediately pay their total debt or contact the IRS to find a solution.
The IRS will soon begin levying your wages and accounts, especially if you delay after receiving a notice. Federal tax liens and delinquent account status can also affect your ability to receive credit and renew a passport.
Your options are still open now, but only if you kick it into high gear. There is no way to ignore this situation; eventually, your financial accounts, assets, and state tax refunds are at risk. Payment plans are a great option if you don’t have enough funds to cover your balance. The IRS is often willing to work with taxpayers who respond to CP504s instead of ignoring them.
Preventing an IRS Levy After Receiving a CP504
There aren’t many ways to prevent the IRS from levying your accounts and assets without addressing the elephant in the room: an unpaid tax balance. However, how you get to that point can vary, and the immediate steps you take to reach an agreement with the IRS will impact your repayment journey.
Respond Immediately
Ignoring a CP504 notice won’t make it go away, and the last thing you should do is let this final notice go unanswered. Even if this tax balance is a mistake, you must contact the IRS as soon as possible to clear up any issues associated with your account. Contact Highland Tax Resolution and let our experts help you through the matter.
Pay The Full Amount
Paying your outstanding taxes is the simplest way to eliminate IRS concerns related to your CP504. While this may not be feasible for you, it gives the IRS what they want and will get them out of your hair.
Set Up A Payment Plan
If full payment isn’t possible, you can create a payment plan to reduce your tax balance over time. This won’t eliminate interest and existing penalties, but it will prevent the IRS from levying assets and accounts due to non-compliance.
Alternative Resolutions
You can avoid repaying your entire balance in two primary situations: when much of your tax debt involves penalties and when there is no feasible way to pay off the debt. Typically, these relief options require you to show the IRS significant evidence of financial hardship.
Don’t ignore your CP504 notice. Things may seem bad now, but they’ll get worse if you don’t respond to the IRS. Contact the Highland Tax Group to learn what your options are.