IRS notice CP503 is a second tax balance due reminder from the IRS when you have unpaid taxes. The IRS sends a CP503 notice if you still haven’t paid your taxes, or they haven’t received a response from you after sending initial notices of overdue taxes (CP14 and CP501).
If you receive a CP503 notice, it is important that you take action, as the IRS’s next step will be to send a final balance due notice informing you that they plan to file a federal tax lien and/or levy your assets (wages, bank accounts, retirement, etc.).
Even if you can’t pay the full amount you owe the IRS, you should respond to the CP503 notice, as you have several options for settling your outstanding tax debt. Similarly, if you believe the CP503 notice was sent in error, there is an appeals process to dispute what you owe the IRS.
What Is a CP503 Notice and Why Did I Receive It?
IRS CP503 notice is also known as a Second Tax Balance Due Reminder. The CP503 is sent for the purpose implied by its name — to remind you, for the second time, that you owe the IRS back taxes. IRS notice CP503 also provides IRS contact information so you can reach out to settle your tax debt.
What Do I Do When I Receive a CP503 Notice?
When you receive a CP503 notice, you should either pay the full back taxes amount by the due date or contact the IRS to make payment arrangements, like an IRS payment plan/installment agreement, or let them know you disagree with the unpaid taxes amount in the CP503 notice.
How Much Time Do I Have to Respond to My CP503 Notice?
IRS notice CP503 includes a payment due date. You have until that date to either pay the balance due or contact the IRS.
What Happens If I Don’t Respond to My CP503 Notice?
If you don’t respond to your CP503 notice, the IRS will escalate the collection process. The next notice you receive will be a CP504 (Final Notice of Tax Balance Due and Intent to Levy). You’ll want to avoid IRS liens and levies.
What If I Receive a CP503 Notice and Can’t Pay What I Owe the IRS?
If you can’t pay what you owe the IRS, you shouldn’t ignore your CP503 notice and hope the problem goes away — it won’t. The longer you wait to settle your tax debt, the more penalties and interest the IRS will tack on, and the more expensive the problem will become.
Fortunately, the IRS offers a number of tax relief programs to help you settle your unpaid taxes while working within your financial constraints. The most attractive of these programs is an Offer in Compromise (OIC), in which the IRS agrees to accept a lower amount to settle your tax debt than what you actually owe. This program requires proof of financial hardship.
A more common tax relief program is an IRS payment plan, in which you make monthly installment payments to the IRS until your tax debt is paid in full. The IRS will consider your household income and your other debts and obligations when coming up with the monthly payment amount.
What Should I Do If I Disagree and Want to Appeal My CP503 Notice?
If you believe the information in your CP503 notice is erroneous, and you want to appeal, you should contact the toll-free number included in your CP503. An IRS representative will walk you through the process of disputing the tax debt. It is often a good idea to get a tax professional involved ahead of time, as the IRS has many resources and can be difficult to challenge.
What’s the Difference Between a CP503 Notice and a CP503H Notice?
The IRS sends a CP503H notice when it believes you have an unpaid balance on your shared responsibility payment (SRP) account. Typically, a taxpayer receives a CP503H notice when the IRS believes they lacked the minimum required health insurance coverage during a given tax year.
How Can Wiztax Help?
The key is to get started. Ignoring these notices makes everything more complicated. Call us today at (866) 568-4593 to learn more about how we can help, or start here to take our free online evaluation. Regardless, we promise to save you thousands in fees.
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