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IRS Notice CP504: Final Warning Before Levy

Notice CP504 is the IRS's final notice of intent to levy your state tax refund and a warning of impending asset seizure. It is a serious escalation — the language on CP504 explicitly warns that if you do not respond, the IRS will: seize ("l

By Sarah Mitchell·3 min read·Updated April 23, 2026
High Urgency
Notice CP504 is the IRS's final notice of intent to levy your state tax refund and a warning of impending asset seizure. It is a serious escalation — the language on CP504 explicitly warns that if you do not respond, the IRS will: seize ("levy") your state tax refund; search for and seize other property; file a Notice of Federal Tax Lien if not already filed. CP504 is not yet the final levy notice for all assets — that is Letter 1058 or LT11 — but it is the clear final warning that the situation has reached critical.

What the IRS can actually do after CP504

CP504 gives the IRS authority to: levy state tax refunds (most state revenue departments share data with the IRS for this purpose); levy certain other Treasury payments (Alaska Permanent Fund dividends, for example); begin investigation for broader asset seizure. For other asset levies — bank accounts, wages, property — the IRS must first send Letter 1058 or LT11, which provides 30-day Collection Due Process rights. CP504 does not itself authorize wage garnishment or bank levies.

How to respond to CP504

CP504 is an emergency-level notice. Multiple resolution paths remain open: paying the balance, establishing an installment agreement, applying for an Offer in Compromise, or requesting Currently Not Collectible status. Each path has specific qualifying criteria, and the right one depends on the taxpayer's financial situation. Properly executed, any of these halts escalation and prevents the state refund levy from taking effect. The window for resolution at CP504 is narrower than at earlier notices — procedural delays at this stage can mean the difference between negotiated resolution and enforced collection.

Why Collection Due Process is not yet available

CP504 does not trigger Collection Due Process (CDP) rights. CDP rights come with Letter 1058 or LT11, the Final Notice of Intent to Levy. However, CP504 does give you a final chance to resolve matters before the IRS proceeds to those critical notices. Waiting for CDP rights at Letter 1058/LT11 means accepting that state refund levy may have already occurred.

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Frequently asked questions

Does CP504 mean the IRS will garnish my wages?+

Not immediately. CP504 authorizes state refund levy and signals impending broader action, but wage garnishment requires Letter 1058 or LT11 first. However, the path to wage garnishment typically runs through CP504 — acting now prevents escalation.

Will the IRS take my state tax refund after CP504?+

Very likely, yes. CP504 specifically authorizes state refund levy through the State Income Tax Levy Program (SITLP). If you have a state refund pending, it will likely be intercepted unless you resolve the federal debt first.

Can I still set up a payment plan after CP504?+

Yes. Payment plans remain available throughout the collection sequence. Call the number on the notice immediately — once you have an approved installment agreement, collection action (including state refund levy) generally stops.

How long after CP504 before actual levy?+

The IRS may levy the state refund relatively quickly (30 days is common). For other assets, Letter 1058 or LT11 with a 30-day CDP window must come first. Total time from CP504 to wage garnishment might be 60-90 days if all notices are issued.

Is Letter 1058 the same as CP504?+

No. CP504 is a final warning before state refund levy. Letter 1058 (and its twin LT11) is the Final Notice of Intent to Levy all assets, with 30-day Collection Due Process rights. CP504 comes earlier in the sequence.

About the author

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Sarah Mitchell

Consumer Affairs Editor · Fresh Start Division Editorial

Sarah Mitchell is the Consumer Affairs Editor at Fresh Start Division. She reports on predatory tax resolution practices, consumer protection, and advocacy for taxpayers navigating the IRS.

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