IRS Notice CP503: What It Means and What to Do

Why did I get a CP503?

Common reasons include:

• Earlier notices (such as CP14 and CP501) went unpaid or unanswered
• A payment plan was never set up, or a payment was missed
• A payment was applied to a different tax year or has not posted yet
• Penalties and interest continued to grow on an earlier balance

What should I do?

1. Read the notice carefully. It explains how much you owe, when payment is due and your payment options.
2. Check the balance against your payment records and your IRS Online Account.
3. Pay the full balance by the due date on the notice, online or by mail with the bottom part of the notice.
4. If you can't pay in full, apply for a payment plan online or mail an installment agreement request (Form 9465).
5. If you disagree, call the toll-free number on your notice right away to speak with a customer service representative.
6. If you already fixed the problem, such as by paying or setting up a plan, still call so your account shows it.

What documents do I need?

• The CP503 notice and the earlier notices (CP14, CP501)
• Proof of payment, such as bank statements, cancelled checks or payment confirmations
• Your filed tax return for the year shown
• Any installment agreement confirmation or IRS letters about your account

What should I avoid?

• Don't ignore it. The next notice in the series is generally a notice of intent to levy (CP504).
• Don't assume a recent payment or plan fixed everything. The IRS says to call so your account shows the actions you took.
• Don't wait past the due date to call about payment options.

What if I disagree with a CP503?

Contact the IRS right away at the toll-free number on your notice to discuss it with a customer service representative. You may also ask for an appeal under the Collection Appeals Program (CAP, Form 9423) before collection action takes place, following the instructions on your notice. Publication 1660 explains CAP.

What happens if I ignore a CP503?

If you don't pay, make arrangements or contact the IRS, it may file a Notice of Federal Tax Lien if it hasn't already. A lien is a public claim that may affect your ability to get credit. More penalties and interest may be added, and the account generally moves on to a notice of intent to levy.

What else should I know about CP503?

A CP503 means the IRS's automated notices are moving forward. The page calls it your "second reminder", and the notice after it is generally the CP504 notice of intent to levy. At that stage the IRS can levy a state tax refund without first offering a Collection Due Process hearing. So the CP503 stage is often the last notice before the IRS can take money without offering a hearing first, which makes it a good time to pay or set up a plan. Payments by the date on the notice limit how much more interest and penalty is added.