CP504B Notice: The IRS Intends to Levy a Business Tax Balance

What the CP504B notice says

The IRS page for this notice opens: “We’re providing you with this notice of intent to levy as required by Internal Revenue Code section 6331(d) because we haven’t received payment for the amount you owe.” It warns that the IRS may levy property or rights to property, and that it may also file a Federal Tax Lien if it has not done so already.

IRS Document 6209, the IRS’s own guide to its notice numbers, lists the 504B as the final balance due notice for a business account. It lists the plain 504 as the final notice for an individual account. Our CP504 page covers that one.

What the IRS can do after this notice

IRC 6331(d) lets the IRS levy only after it tells the taxpayer in writing that it intends to, and the law requires that notice “no less than 30 days before the day of the levy.” The CP504B is that notice for a business.

Most levies need one more notice first: an offer of a Collection Due Process (CDP) hearing, a review by the IRS Independent Office of Appeals. The IRS page says so: “In most other situations, before we levy on your property or rights to property, we’ll send you a notice that gives you the opportunity to request a Collection Due Process hearing.”

Two levies skip that step, and this is the most important fact on the page. The IRS page says that if it does not receive the amount due “within 30 days from the date on the notice,” it may serve a Disqualified Employment Tax Levy or a Federal Contractor Levy. IRC 6330(f) confirms that for those two levies the business gets its hearing only after the levy.

The IRS page lists what property can mean: wages and other income, bank accounts, business assets, personal assets such as a car and home, and Social Security benefits.

The notice also opens the door to a lien. The IRS page says it can file a Notice of Federal Tax Lien, which it calls “a public notice that the IRS has a claim on your property due to unpaid taxes, which can impact your credit.” A lien marks the property; a levy takes it.

Each one has a narrow trigger. IRC 6330(h) limits the employment tax levy to a business that already asked for a CDP hearing about unpaid employment taxes within a recent look-back period, and the contractor levy to a business that is a federal contractor. Our LT73 page explains the employment tax levy, and our LT75 page explains the contractor levy.

What to do by the date on the notice

Pay the balance if you can, and keep proof of the payment with the notice. If the business cannot pay in full, the IRS page points to a payment plan, an offer in compromise, or a temporary collection delay when the business faces financial hardship. Our collection alternatives router compares those options for a business.

If the business already has an approved installment agreement, the IRS page says to keep paying as agreed. If you applied and have no approval yet, it says to pay as much as you can now to reduce more interest. If you recently paid in full, it says you can disregard the notice.

You can also ask for an appeal under the Collection Appeals Program (CAP) before the IRS acts. The IRS page tells you to follow the instructions on your notice for that request, and it points to Publication 1660, Collection Appeal Rights. It also points to Publication 594, The IRS Collection Process, for the steps that follow.

If you disagree with the balance

The IRS page tells you to call the toll-free number on your notice right away and to have your paperwork ready. If you have the business’s account transcript, compare it with the notice before you call. Our transcript analyzer explains each line of a business transcript in plain words.

The IRS page also lets you send documents through the IRS Document Upload Tool. Keep a copy of everything you send, and note the date you sent it.

Why a business notice mentions passports

The IRS page says the CP504B also explains that the State Department may deny or revoke a passport. The law puts that paragraph there: IRC 6331(d)(4)(G) says every notice of intent to levy must describe the rules for certifying a seriously delinquent tax debt to the State Department.

IRC 7345 defines that debt as a tax liability “of an individual.” The passport rule reaches a tax debt that a person owes, not a debt that only a corporation owes.

What people mistake the CP504B for

Some readers take a CP504B for the individual CP504 and expect the same timeline. Our CP504 page explains that for an individual the CP504 by itself clears the way only for a levy on a state tax refund. The CP504B page says that the state refund levy program “only applies to individual state tax refunds” for now, and it names the two business levies above instead.

Others wait for more warning letters. The IRM says that on business accounts “the first and final notices are the only notices issued.” A business can move from its first bill to this notice with no reminder between them.

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