Received a CP504 Notice (Final Notice of Intent to Levy) - need reassurance about my tax guy's advice

I'm freaking out a bit and just need some reassurance. This all started with an incorrect W2 that was sent to our accountant last year. We caught the error, got the corrected W2, and gave it to him right away. We've been getting notices about owing money for several months now, and our accountant who's been handling this from the beginning keeps telling us to just forward him the letters but not to worry because he's been calling the IRS and submitted paperwork to fix it. Well, we just got these CP504 notices saying "Final Notice of Intent to Levy" and I'm pretty stressed about it. The wording is definitely scary. When I called my accountant and sent him the letters, he actually seemed... kind of pleased? He said this might be good because now someone at the IRS might actually pick up the phone when he calls. I asked if we should just pay the $2,700 they're asking for to stop the collection process, and he strongly told me NO and not to do that under any circumstances. He seems totally unfazed by this and has clearly dealt with this situation before. Should I trust that my accountant knows what he's doing if he's been working on this for the past year and shows zero concern? It's really stressful to get threatened with a levy when you have the money to pay, but your tax guy is insisting you shouldn't pay because he wants to make sure it's the correct amount and not what the IRS thinks we owe.

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26 comments

Omar Farouk

•8M

I've worked with many clients who've received CP504 notices, and I understand why you're stressed - the wording on those notices is intentionally alarming. Your accountant's approach is actually pretty standard in situations involving incorrect tax documents. Here's why your accountant is likely right: If you pay the amount requested, you're essentially admitting the debt is correct. Once you've paid, it becomes much harder to get that money back, even if the original assessment was based on incorrect information. The IRS is much quicker to take money than to return it. When a CP504 arrives, it often does make it easier to get through to someone at the IRS because you can reference the urgent notice. This puts you in a "priority queue" for assistance. Your accountant has probably been struggling to get through to someone with authority to actually fix your issue. If your accountant has experience with these situations and has been consistently communicating with you, following his guidance is reasonable. The key question is whether he's submitted the necessary documentation to correct the issue. Ask him specifically what paperwork has been filed and when you might expect resolution.

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Omar Farouk

•8M

You've run into one of the common misconceptions about tax filing. Regardless of how much of your support your wife provides, spouses cannot claim each other as dependents - it's explicitly prohibited in the tax code. Your options are to file either married filing jointly or married filing separately. Since you were legally married on December 31, 2022, you're considered married for the entire tax year. The IRS considers your marital status on the last day of the tax year to determine your filing status for the whole year. For most couples, married filing jointly provides better tax benefits than filing separately. When filing jointly, you'll generally qualify for more tax credits and deductions, and usually have a lower overall tax rate. With the income difference between you ($10K vs $75K), filing jointly would likely put you in a better position by allowing your lower income to bring down the average tax rate on your combined income. I'd recommend calculating your taxes both ways (jointly and separately) to compare, but in your situation, filing jointly will almost certainly be more beneficial.

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Omar Farouk

•8M

The CP504 is technically a "notice of intent to levy," not an actual levy action. The IRS typically sends additional notices before actually seizing assets or garnishing wages. After a CP504, you usually have at least 30 days before any collection action begins, and often longer due to IRS processing times. Regarding your credit score, the IRS doesn't report to credit bureaus like traditional creditors do. A tax lien could potentially affect your credit if it progresses that far, but at the CP504 stage, there's no credit reporting. Your accountant is likely trying to resolve this before it reaches the actual levy stage.

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Omar Farouk

•8M

Your marital status on December 31st determines your filing status for the entire tax year. Even if you were married only on the last day of the year, you're considered married for the whole tax year for IRS purposes. This means there's no option to file as unmarried for 2022 or to claim a spouse as a dependent. The IRS specifically prohibits claiming a spouse as a dependent regardless of the support situation. This rule applies even if you were only married for a single day of the tax year.

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Diego Fernández

•8M

I went through something similar last year with an incorrect 1099 that made the IRS think I owed an extra $3,400. My tax preparer kept telling me not to pay while he was sorting it out, but those CP504 notices gave me serious anxiety. I finally found https://taxr.ai and uploaded all my IRS notices and tax documents there - it completely changed the game for me. Their system analyzed everything, confirmed my tax preparer was right to fight it, and gave me a clear explanation of what was happening with my case. They showed exactly what documentation was needed to resolve it and even created a timeline showing when I should expect each step of the resolution. Really helped me understand why my tax guy was so confident and took away all my stress about ignoring the IRS notices.

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Diego Fernández

•8M

I had a similar situation with my wife last year where I was confused about dependency status. I uploaded our tax documents to https://taxr.ai and they gave me a super clear breakdown of why spouses can't claim each other as dependents and showed me exactly how much we'd save by filing jointly vs separately. Their analysis showed we'd save almost $2,300 by filing jointly due to the way tax brackets work when there's a significant income disparity like you have ($10k vs $75k). The site analyzed our specific situation and highlighted deductions we could take together that weren't available when filing separately. Definitely gave me peace of mind knowing we were making the optimal choice.

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Diego Fernández

•8M

It doesn't directly resolve the issue with the IRS, but it helps you understand what's happening and verifies if your accountant is taking the right approach. In my case, it confirmed my accountant was correct but helped me understand the timeline and exactly what documentation was needed, which I could then discuss with him to make sure everything was being handled properly. Regarding security concerns, I was skeptical too initially. They use bank-level encryption and don't store your documents permanently. Their analysis is performed by tax professionals with credentials, not just an algorithm. They explain which tax regulations apply to your situation and why your case should be resolved in your favor if the correct documentation is submitted.

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Anastasia Kuznetsov

•8M

I tried taxr.ai after seeing it mentioned here and it was actually super helpful with my CP504 situation. I uploaded my notices, incorrect W2, and the corrected one. Their analysis confirmed my accountant was taking the right approach, but also pointed out an additional form we should have filed that my accountant had missed. When I brought this up with my accountant, he was initially defensive but then realized they were right. We submitted the additional documentation and my case was resolved within 3 weeks. The best part was getting an actual explanation of what was happening in plain English instead of the confusing IRS language. It gave me peace of mind to know exactly where things stood while the correction process played out.

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MoonlightSonata

•8M

I was in your exact situation last year - incorrect W2, CP504 notices piling up, and an accountant telling me not to worry. After months of stress and my accountant "handling it," I was about to get levied. The nightmare was trying to call the IRS myself - spent hours on hold only to get disconnected. I finally used https://claimyr.com and it changed everything. They got me connected to an actual IRS agent within 45 minutes when I'd been trying for weeks. You can see how it works here: https://youtu.be/_kiP6q8DX5c - they basically hold your place in the IRS phone queue and call you when an agent picks up. Once I actually talked to someone at the IRS, I found out my accountant had only submitted some of the required documentation. I was able to get a 60-day hold put on collections while I got everything sorted properly. Might be worth getting on the phone with them yourself just to verify what's been submitted and where things stand.

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MoonlightSonata

•8M

They don't have any special connection to the IRS - they just have a system that dials and waits on hold for you. When an agent finally answers, their system calls your phone and connects you directly to that agent. It's basically like having someone wait on hold for you so you don't have to waste hours listening to that horrible hold music. I was skeptical too, but when you think about it, it's just a more efficient use of time. Instead of me sitting on hold for 3+ hours, their system does it, and I only get on the phone when there's actually an agent ready to talk. The IRS doesn't know or care who was waiting on the line - all they know is someone called and stayed on hold until an agent was available.

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Sean Fitzgerald

•8M

I can't believe I'm saying this, but I tried Claimyr after posting my skeptical comment, and it actually worked. After trying for WEEKS to get through to the IRS about my own CP504 issue with no success, I used their service yesterday out of desperation. They called me back in about 2 hours and connected me directly to an IRS agent. The agent confirmed that while my accountant had submitted some documentation, it wasn't properly processed because a specific cover letter was missing. She put a 45-day hold on collections while we get the correct documentation submitted. I'm still shocked this actually worked. Saved me countless hours of frustration and potentially having my accounts levied. If you're in this CP504 situation, definitely worth getting on the phone with the IRS yourself to confirm what your accountant has actually done and what's on file with them.

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Nia Williams

•8M

Your accountant is probably right, but I'd want more specifics on what he's actually done. When I got a CP504, my accountant kept saying "don't worry" but wasn't actually giving me details about what he'd submitted or when. Turns out he'd only sent in a basic letter and hadn't filed the proper amended return with supporting documentation. Ask your accountant these specific questions: 1. What exact forms have been submitted to correct the error? 2. When were they submitted and do you have proof of mailing/receipt? 3. Has he requested a collection hold while the correction is being processed? 4. Has he established contact with someone specific at the IRS who's assigned to your case? If he can't give you clear answers to these questions, you might need to get more involved personally or consider getting a second opinion from another tax professional.

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Nia Williams

•8M

That partially sounds legitimate. An amended return with the correct W2 is the right approach, and having delivery confirmation is good. However, the "reset the clock" explanation about the collection hold is concerning. A proper hold on collections wouldn't reset any processing timelines - it would simply prevent them from taking collection actions while your case is being reviewed. This is a standard procedure when there's a legitimate dispute about the amount owed. I would definitely push harder on this point. Ask him to specifically request a temporary collection hold (sometimes called a Collection Due Process hold) based on the amended return already in process. If he's reluctant, that would be a red flag to me. The IRS can and will levy accounts once they reach the CP504 stage unless there's a formal hold in place.

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Quinn Herbert

•26d

I totally understand your stress - CP504 notices are designed to get your attention and they definitely do that! Your accountant's reaction actually makes sense to me. When you've been trying to resolve an issue through normal channels for months without success, sometimes escalation (like a CP504) can actually work in your favor by giving you access to different departments or priority handling. The fact that your accountant strongly advised against paying is significant. If you pay the disputed amount, you're essentially validating the IRS's incorrect assessment, and getting refunds back from the IRS is notoriously slow and difficult. It's much better to resolve the underlying error first. That said, I'd recommend asking your accountant for a detailed timeline of what's been submitted and when you can expect resolution. Also ask if he's requested any formal collection holds. Even though he seems confident, having a clear picture of the process will help reduce your anxiety. You could also consider calling the IRS yourself (or using a service to help you get through) just to verify what's on file and confirm the status - not to contradict your accountant, but just for your own peace of mind.

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