Received CP503 notice unexpectedly - what's the correct 'reason for payment' option when paying online?

I just opened my mailbox yesterday and found a CP503 notice from the IRS for tax year 2018 completely out of nowhere. The notice says the payment deadline was January 15, 2025, and I only got the notice on January 13th! I never received any previous notices about this issue. I'm trying to pay this immediately through the IRS website, but I'm stuck at the "reason for payment" dropdown menu. There's no specific option for CP503 payments and I don't want to choose the wrong one and have my payment misapplied. Which reason for payment should I select when paying online for a CP503 notice? I'm in California, and this is for my federal taxes. The amount they're saying I owe is around $3,200 including penalties and interest. I'm worried because the notice mentions further collection actions if I don't pay right away, but I want to make sure I'm selecting the right payment reason.

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19 comments

Eleanor Foster

•8M

The CP503 is actually a second reminder that you owe taxes - the first notice would have been a CP501. It sounds like you might have missed the first notice or it got lost in the mail. When paying online for a CP503, you should select "Tax Return or Notice" as your reason for payment. Then you'll need to provide the tax year (2018), form number (1040 or whatever form you filed), and the notice number (CP503). This ensures your payment gets applied correctly. Since you've already received a CP503, I'd recommend paying as soon as possible. The next step in the IRS collection process is typically a CP504, which is a "Final Notice of Intent to Levy" - basically meaning they could start taking more aggressive collection actions. If you can't pay the full amount right away, you should look into setting up an installment agreement on the IRS website.

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Eleanor Foster

•8M

Yes, the standard IRS process is to send a CP501 (first notice) before issuing a CP503 (second notice). It's quite possible your first notice got lost in the mail or was delivered to the wrong address. The IRS uses the address they have on file, which might be outdated if you've moved. Paying the full amount will typically halt any future collection actions. The IRS payment systems are automated, so once they receive your payment and process it, the collection process should stop automatically. However, if you want peace of mind, you can call the IRS after making your payment to confirm they received it. Just be prepared for potentially long wait times on the phone.

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Anna Stewart

•8M

After getting a surprise tax notice, I tried calling the IRS for weeks with no luck. I was so stressed about missing deadlines! Then I found this service called taxr.ai (https://taxr.ai) that saved me hours of frustration. I uploaded my CP503 notice and got a complete explanation of what it meant, why I received it, and exactly which payment option to select online. It showed me where to find the tax year and form numbers on my notice too. Their system breaks down all the tax jargon into plain English - told me exactly what "reason for payment" to select and what would happen if I missed the deadline. Definitely made dealing with an unexpected IRS notice way less stressful!

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Anna Stewart

•8M

Yes, it absolutely works for business tax notices too! I've seen people use it for everything from sole proprietor issues to S-corp and partnership questions. It's especially helpful for identifying which business forms you need to reference when making payments. For timing, I got my complete analysis in under 15 minutes. That's what impressed me the most - I uploaded my notice right before bed thinking I'd check it the next day, but got a notification with the full breakdown before I even finished my nighttime routine. They prioritize notices with upcoming deadlines too, which is reassuring when you're under time pressure.

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Morgan Washington

•8M

I just wanted to update after trying taxr.ai with my own CP503 notice. Super impressed with how quick and straightforward it was! Uploaded my notice last night and immediately got clear instructions for exactly which payment option to choose (Tax Return or Notice). The breakdown explained that my notice was showing up because of an error in my 2018 calculations, not just an unpaid balance like I thought. It showed me how to reference the specific tax forms involved when I made my payment. Ended up paying online this morning with the correct reason code and got confirmation from the IRS that my payment was properly applied. Definitely would have selected the wrong option without the guidance!

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Kaylee Cook

•8M

After spending DAYS trying to reach someone at the IRS about my CP503 notice, I finally found Claimyr (https://claimyr.com). Honestly thought it sounded too good to be true, but their service actually got me connected to a real IRS agent in about 20 minutes instead of the 2+ hours I was waiting on my own. The agent confirmed exactly which payment reason I needed to select, verified that my account was still in good standing, and even helped me understand why I never received the first notice. Turns out they had been sending notices to my old address despite my change of address form! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c - basically they navigate the IRS phone system for you and call you back when an agent is about to answer. Saved me hours of hold music and stress.

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Kaylee Cook

•8M

They don't listen to your conversation at all. The way it works is they use technology to navigate the IRS phone system and wait on hold for you. When they detect that an agent is about to pick up, they call you and connect you directly to the IRS agent. It's just you and the IRS on the call once you're connected. I was totally skeptical too. But after waiting on hold for 2+ hours three different times and getting disconnected, I was desperate enough to try. I'm not exaggerating when I say I got connected to an actual IRS representative in about 20 minutes. Completely worth it when you're facing collection actions and need answers immediately.

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Lara Woods

•8M

I need to eat my words. After posting my skeptical comment, I decided to try Claimyr myself since my CP503 deadline was approaching fast and I couldn't get through to the IRS. Got connected to an IRS agent in 17 minutes when I had been trying for DAYS on my own. The agent confirmed I should select "Tax Return or Notice" for my CP503 payment, and also explained why I was getting this notice 7 years after filing (they found a discrepancy between reported income and what my employer submitted). The agent even helped me set up an installment plan since I couldn't pay the full amount at once. Definitely saved me from further penalties and probably a CP504 notice. Sometimes being proven wrong is actually a good thing!

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Adrian Hughes

•8M

I've paid three different CP notices this way over the years and never had any issues. The key is making sure you enter the correct tax year and form number along with it. However, "Amount Owed on Notice" would also work fine. The most important thing is that you include your SSN, the correct tax year (2018), and the form number referenced on your notice. The payment system will attach the payment to your account regardless of which of these two options you select. The IRS cares more about identifying YOU correctly than the specific reason code you choose from their dropdown.

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Eli Butler

•8M

The IRS generally doesn't report to credit bureaus directly, but tax liens used to show up on credit reports. However, since 2018, the three major credit bureaus no longer include tax liens on credit reports as part of their National Consumer Assistance Plan. That said, you should still address it ASAP. If you can't pay in full, set up a payment plan on the IRS website under "Pay" and then "Payment Plans." This shows good faith and stops most aggressive collection actions.

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