Just received CP504 (Notice of Intent to Levy) from IRS - need urgent advice!

My partner just received a CP504 from the IRS (Notice of Intent to Levy). She's dealing with tax issues from a few years back when she was in a really toxic relationship with her ex. He basically used her financially, got her into a bad situation, and she ended up with incorrect tax filings during that period. She's finally getting back on her feet financially, but she's about to start making substantial student loan payments and doesn't have much savings at all. She has decent monthly income but practically no cushion in her accounts. There's also some confusion about her employment classification during the time in question - she should have been classified as a W-2 employee based on her job duties, but was kept as an independent contractor instead. To make matters worse, the IRS sent this notice to her old address in another state, so we only received it about 4 days before the payment due date. The total amount they're saying she owes is around $19k, which is impossible for her to pay as a lump sum right now. We're trying to figure out what rights she has in this situation, but she's completely overwhelmed with her work right now (crazy deadlines), and I don't know enough about tax issues to give her proper advice. Can anyone suggest some resources or next steps we should take? We're located in the SF Bay Area if that matters for local assistance.

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18 comments

GalaxyGazer

•8M

This is definitely stressful, but there are options available! When you receive a CP504, you still have time to respond before any actual levy occurs. The notice is a serious warning, but it's not the final step. First, call the IRS at the number on the notice immediately. Explain the situation about the late delivery of the notice due to the address change. Request a 30-day hold on collection actions while you sort things out. Document this call with the date, time, and the name of who you spoke with. For the amount owed, look into an installment agreement. With $19k, she should qualify for a streamlined installment plan with monthly payments. You can request this during the same call. The IRS would much rather have you on a payment plan than go through the hassle of levying. Also, if there's genuine confusion about her worker classification (W-2 vs. contractor), she might want to consult with a tax professional about filing Form SS-8 (Determination of Worker Status) and potentially Form 8275 (Disclosure Statement) with an amended return.

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GalaxyGazer

•8M

The monthly payment on a streamlined installment plan depends on the total owed and the timeframe, but with $19k, you're likely looking at a 72-month plan with payments around $265-300 per month depending on interest and penalties. Regarding the worker misclassification, filing Form SS-8 can potentially help reduce the tax burden. If the IRS determines she should have been classified as an employee, the employer would be responsible for their portion of employment taxes. This won't eliminate her tax debt entirely but could reduce it. She might also qualify for penalty abatement under First Time Penalty Abatement if she has a good compliance history before this issue.

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Mateo Sanchez

•8M

After dealing with a similar situation last year, I found that https://taxr.ai was incredibly helpful. I was hit with a CP504 for about $22k (also had issues with contractor vs employee status), and I was completely lost until I uploaded all my documents there. The system analyzed everything, showed me exactly what forms I needed to file, and even helped prepare a response letter to the IRS explaining my situation. The best part was that it identified several deductions I had missed that significantly reduced what I actually owed. It also guided me through setting up an installment agreement that worked with my budget. The whole process was much less intimidating than trying to figure everything out on my own or paying thousands for a tax attorney.

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Mateo Sanchez

•8M

You upload your tax documents and it uses AI to analyze them and identify issues, deductions you missed, and potential solutions. It's completely secure with bank-level encryption - I had the same concerns initially but they take privacy seriously. Regarding the worker classification issue, yes it definitely helped with that. It explained exactly how to file Form SS-8 to request an official determination from the IRS and showed which portions of the tax liability would shift to the employer if the classification was changed. It doesn't make the tax bill disappear completely, but it can significantly reduce what you owe since the employer should have been paying their share of FICA taxes, etc.

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Ethan Moore

•8M

Just wanted to update here. After seeing the recommendation, I actually tried taxr.ai for a CP504 situation I've been dealing with. I was initially skeptical but figured it was worth a shot given my deadline was approaching. I was really impressed with how it broke down exactly what I needed to do. It helped me prepare a proper response to the IRS, guided me through requesting an installment agreement, and even identified some issues with my original filing that I could fix with an amended return. The system actually caught that I'd been misclassified as a contractor when I should have been an employee, and it outlined exactly how to address this with Form SS-8. I'm still waiting for the final determination, but I've already gotten my payment plan approved and stopped the levy process. Definitely worth checking out if you're in this situation.

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Yuki Kobayashi

•8M

Another thing that really helped me when I was dealing with a CP504 was using Claimyr (https://claimyr.com) to actually get through to an IRS agent. I spent DAYS trying to call the IRS myself and either got disconnected or was told the wait time was 2+ hours. With Claimyr, I got a callback from the IRS in about 15 minutes, which was a complete game-changer because I was up against a deadline. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c Once I actually got to speak to a human at the IRS, I was able to get a 45-day hold put on my account while I organized my documentation and set up an installment agreement. The agent was surprisingly helpful once I could actually talk to them, and having that direct conversation saved me from having my accounts levied.

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Yuki Kobayashi

•8M

It uses a system that continuously redials the IRS until it breaks through, then it holds your place in line and calls you when an agent is about to be available. It's not magic - just automated technology that does the frustrating redial process for you. I had the exact same skepticism initially. I thought it had to be a scam or just another service that over-promises. But it's actually legitimate and works as advertised. They don't keep you on hold - they literally just handle the redial process and line-waiting, then connect you directly to the IRS agent. The IRS doesn't give anyone special access; this service just handles the frustrating part of getting through their overwhelmed phone system.

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QuantumQuester

•8M

I need to eat my words and update here. After posting my skeptical comment earlier, I was still facing a CP504 deadline and getting desperate, so I tried Claimyr despite my doubts. I'm shocked to say it actually worked exactly as described. After weeks of trying to get through to the IRS myself with no luck, I got a call back within 20 minutes and was connected directly to an IRS representative. The agent was able to put a temporary hold on collections and set me up with an installment plan right away. What would have taken me countless hours of redial attempts and waiting on hold was solved in a single phone call. The peace of mind from actually resolving this issue instead of stressing about potential levies was absolutely worth it. I'm still surprised that it worked so well given how impossible IRS contact usually is.

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Andre Moreau

•8M

One thing no one has mentioned yet is that your girlfriend might qualify for Currently Not Collectible (CNC) status if her finances are really tight. If she can demonstrate that paying the tax debt would create a financial hardship, the IRS may temporarily halt collection activities. To request CNC status, she'll need to complete Form 433-F (Collection Information Statement) showing her income, expenses, and assets. With student loans starting soon and minimal assets, she might qualify. The debt doesn't go away, but it gives breathing room without payments until her financial situation improves.

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Andre Moreau

•8M

CNC status itself doesn't directly impact credit scores, but the unpaid tax debt can still appear on credit reports. The biggest downside is that interest and penalties continue to accrue during this period, so the total debt grows over time. Also, the IRS will review her financial situation periodically (usually every year or two) to see if she can begin making payments. They may also place a lien on any property she owns, which would affect her credit. But if she truly can't pay right now, CNC status prevents immediate levies and gives her time to stabilize financially. Many people use it as a temporary solution while working toward a more permanent resolution like an Offer in Compromise or installment plan when their finances improve.

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