Where CP503 Fits in IRS Notices
The IRS sends a CP503 after earlier notices go unanswered. If the balance stays unpaid, the IRS may send a CP504 notice, its final reminder.
| Notice | What it means |
|---|---|
| CP14 | Your first bill for a balance due |
| CP501 | A reminder that you still owe a balance |
| CP503 | Your second notice |
| CP504 | A Notice of Intent to Levy |
A levy is when the IRS legally takes your money or property to pay what you owe. If you get a CP504 and don’t pay immediately, the IRS can levy your income and bank accounts. It can also seize property, including your state income tax refund. Acting on the CP503 helps you resolve the balance before that point.
What to Do If You Agree You Owe
Start by reading the notice. It shows how much you owe and when payment is due, and it lists your payment options.
Pay in Full by the Due Date
The IRS says you must pay the entire balance by the due date to avoid additional penalties and interest. You have two ways to pay:
- Pay online through the IRS payments page. Our guide on how to pay the IRS online walks through the steps.
- Mail your payment in the envelope the IRS sent. Include the bottom part of the notice so the payment credits your account correctly.
Set Up a Payment Plan If You Can’t Pay in Full
If you can’t pay everything now, you may qualify for a payment plan. One option is an installment agreement, which lets you pay your tax bill in monthly payments. You can apply through the IRS online payment agreement application or mail an installment agreement request.
What to Do If You Disagree or Already Paid
If you think the notice is wrong, contact the IRS at the toll-free number printed on it. Before you call, you can check your IRS Online Account. It shows your balance and up to 5 years of payment history.
You can also request an appeal under the Collection Appeals Program (CAP) before collection action takes place. Follow the instructions on your notice to start one.
What Happens If You Ignore a CP503 Notice
If you take no action on the notice, the IRS may file a Notice of Federal Tax Lien if it hasn’t already. A lien is a public notice to creditors that the IRS has a right to your current and future assets. It can affect your ability to get credit.
Ignoring the balance also moves you closer to a CP504 and a possible levy. If you’re expecting a refund this year, see whether you can get a refund if you owe taxes.
Sources
- IRS, Understanding Your CP503 Notice
- IRS, CP14, CP501 and CP504 notice pages
- IRS, CP503
- Taxpayer Advocate Service, Notices From the IRS
- IRS, Payments and Payment Plans; Installment Agreements
- IRS, Online Account for Individuals
- IRS, Installment Agreement
- IRS, Request an Appeal
