IRS notices and letters vary greatly in the level of urgency and cause for concern. For instance, Letter 2788C is a simple request to have business records updated. Unfortunately, communication via Notice CP504B is far more concerning. In fact, receipt of Notice CP504B requires action on your part.
What Does Notice CP504B Mean?
A CP504B notice is sent to business owners to notify them that the IRS intends to levy against business assets. Notice CP504B is sent because of an outstanding balance due on a tax account. If the balance isn’t paid, the IRS will begin searching for assets to issue a levy on. The IRS may also file a Federal Tax Lien if a lien hasn’t already been filed.
What Happens If You Don’t Pay or Contact The IRS?
If you fail to contact or pay the IRS within 30 days, the IRS will then send you a notice giving you a right to a hearing before the IRS Office of Appeals (if such a notice hasn’t already been received). If you do not timely file an appeal, the IRS will then proceed to seize your property or the rights to your property. Property that can be seized could include:
- Business assets (inventory, cash, etc.)
- Bank accounts
- Accounts receivable
It is extremely difficult to borrow against or sell property with a lien in place.
Responding to Notice CP504B
It’s important to speak with a knowledgeable tax attorney before responding to the IRS. An attorney can correspond with the IRS and help you develop a strategy to avoid aggravating the situation. The first step in responding to Notice CP504B is to contact the IRS and appease collections to prevent levies.
The next step in the process will be obtaining the IRS account transcripts and file to compare them to your business records. If you agree that the business owes what the IRS says it does, your attorney can help you devise a plan to reduce or mitigate the tax. Often, the amount owed is disputed. Depending on the situation, you may be able to file amended returns to reduce the amount owed along with a penalty abatement request.
Speak with A New Jersey IRS Tax Attorney
If you’ve received Notice CP504B and have questions or would like legal advice, contact Paladini Law by calling (866) 908-8157 or filling out an online form for a free initial 20 minute conversation. Attorney Brad Paladini has helped taxpayers across New Jersey avoid penalties and save thousands. Attorney Paladini can review your case, help you determine if hiring an attorney makes sense, and plot a course of action to resolve your tax issue.