There is no such thing as a routine letter or notice from the IRS, and you want to be sure you read and understand every one of them, especially if you get a CP 504 Notice (see the code in the upper right-hand corner of your letter).
With the CP 504 Notice, the IRS is telling you that they haven’t received a payment of the money you owe, and this is a notice that the IRS intends to seize your assets. “If you don’t pay the amount due immediately, the IRS can levy your income and bank accounts, as well as seize your property or your right to property, including your state income tax refund, to pay the amount you owe,” says the IRS in simple, plain and direct language.
What Are Your Options?
You do have options if you have received a CP 504 Notice. The first option is the one the IRS wants you to choose: pay your tax bill. The second option is also okay with the IRS: set up a payment plan, and if you owe less than $50,000, you can consider acceptance of your payment plan to be almost automatic.
There is a third option: you can contact the IRS and tell them you disagree with the amount owed. Then there is the fourth option: you can call a tax professional and discuss other options such as seeking help through the Fresh Start Program or through the Offer In Compromise Program and get your tax bill reduced or even eliminated.
You Must Act Quickly
Remember, you must act quickly. The IRS has the power to seize your wages, commissions, and other income; the IRS can seize bank accounts and your business assets; the IRS can seize your house and your car, and even your Social Security benefits.
A tax professional can also stop the IRS, so consult with a trusted tax pro.