By the time you are mailed this notice, you should have already received plenty of previous notices from the IRS, such as the CP501/502 and CP503, which instruct you to take action on your back taxes. The CP504 is your final notice to pay of your amount before consequences are made by the IRS.

No matter how big the outstanding bill may be, dealing with back taxes can be a hefty process, making it easy to forget or overlook. However, if you receive this letter, there is no time to waste; this notice must be taken very seriously.

Like the previous letters, the CP504 will state your balance due, including any interest and penalties added since the first letter was mailed. In addition, this letter will serve as a final warning stating the potential collection of assets if no further action is made.

The IRS will only send this letter to taxpayers who have not made a single action to resolve their tax debt and will serve as the final notice before the IRS will issue a tax lien or tax levy on your account.

Although it is not recommended, this notice is technically still ignorable. If you choose to ignore it, the IRS will seize or “levy” your state tax refund and apply it to your outstanding balance.

When dealing with the CP504, there is a very important decision to be made; take the necessary actions to pay off your tax debt, or face collection protocols from the IRS.

Paying off the entire amount owed will and cease any more threats or penalties from the IRS. If you cannot pay the full amount, you can still set up a repayment plan, but your chances of getting approval dramatically diminish with each day that passes.

If you feel the amount the IRS claims you owe is incorrect, you can still contact the IRS about the matter and appeal it over the phone.

Regardless of your situation, If you were mailed a CP504 from the IRS, you must take action. The next steps the IRS takes are invasive and damaging to your everyday life, which is why this letter is your last chance to peacefully pay off your tax debt.