Notice Type
A CP504 notice is a more serious follow-up, sent when a balance remains unpaid after earlier reminders. It states that the IRS may levy your state tax refund and can take further collection action on the remaining balance if it isn't resolved. Understanding what led to this notice and confirming the balance is accurate is often where our $45 notice review can help, though situations at this stage that involve active collection action may need additional professional support beyond the initial review.
Before You Respond
A CP504 means the IRS has already sent earlier notices about this balance and is now warning of further collection action, so it's important to look at closely and promptly. Check the date printed on your actual notice — CP504 notices state a specific date by which you need to pay or respond, and that date is what determines your timeline, not a general rule of thumb. If no payment or response is made by that date, the IRS can proceed with the actions described in the notice, including levying a state tax refund, and the balance can move further into IRS collection. Reviewing the notice and acting before that date keeps more options available to you.
Know Before You Act
Before paying the amount listed, it helps to understand two things: what the balance is actually made up of, and whether earlier notices or payments related to it were addressed. The IRS may be correct. But the balance is sometimes based on incomplete information, and there can be a payment that wasn't applied, a response that's still being processed, or steps from an earlier notice that were missed. Knowing which of these applies to your situation is what determines the right next step.
CP504 Questions
Start with a secure notice upload and a free IRS notice summary. If you want organized next steps, optional $45 Review & Guidance is a one-time purchase with no subscription. It may include an Action Plan, records to gather, response options, and case questions. When the information and supporting documents provided support a written IRS response, you can use the action steps provided to prepare it yourself or unlock the option for Think Twice Tax to draft a personalized response letter for you.