Received a CP503 Notice: How To Handle Your Response (Step-by-Step Guide)

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Received a CP503 Notice: What is it and What Happens Next?

How To Manage Your CP503 Notice: Step-by-Step Tax Guide

Did You Receive a CP503 Notice?

When a Taxpayer has an unpaid balance with the IRS, the IRS will send the Taxpayer periodic notices to remind them that there is an amount still due. While there are many different types of letters the Taxpayer may receive, one of the more common notices if the CP503 Notice and CP504 Notice. These notices are generally not actionable by the IRS in terms of liens and levies – but it does set the IRS up for sending an LT11 or Letter 1058, which are final notice of intent to levy forms. Ultimately, the LT11/Letter 1058 will allow the IRS to pursue a levy against the Taxpayer and seize their property (money). Let’s take a brief look at the CP503 Notice by reviewing the IRS’ own summary on the CP503 Notice.

What is the CP503 Notice?

      • “You received this notice because we haven’t heard from you and you still have an unpaid balance on one of your tax accounts.”

What are Your Options 

      • “Read your notice carefully. It explains how much you owe, when your payment is due, and your payment options.

      • Pay the amount you owe by the due date shown on the notice.

      • Make a payment plan if you can’t pay the full amount you owe.

      • Contact us if you disagree by calling the toll-free number shown on your notice.”

Taxpayers should consider putting a strategy together before reaching out to the IRS.

What Can You Do Next?

Frequently Asked Questions

Here are some if the IRS’ FAQs on the CP503 Notice.

What is the notice telling me?

      • “This notice is your second reminder that you still owe a balance on one of your tax accounts. You received this notice because we haven’t received your payment or a response to previous notice(s) requesting you pay this balance.”

What do I have to do?

      • “Pay the amount you owe by the due date shown on the notice. You can quickly and easily pay your balance online or mail us your payment in the envelope we sent you. Please include the bottom part of the notice to make sure we correctly credit your account.

      • If you can’t pay the whole amount now, you may qualify for a payment plan (including installment agreements) by applying online through our Online Payment Agreement Application. You can also mail us an Installment Agreement Request.“

How much time do I have?

      • You must pay the entire balance by the due date shown on your notice to avoid additional penalties and interest.

What happens if I don’t pay or respond to this notice?

      • If you don’t pay the amount due, make payment arrangements, or contact us at the toll-free number on your notice, we may file a Notice of Federal Tax Lien if we haven’t already done so. A tax lien is a public notice to your creditors that the IRS has a right to your interests in your current assets and any assets you acquire after we file the lien; it can affect your ability to get credit.

Who should I contact?

      • If you have any questions about this notice, call us at the toll-free number shown on your notice by your payment due date to speak to a customer service representative.

What if I don’t agree or have already taken corrective action?

      • If you don’t agree, contact us immediately to discuss your matter with a customer service representative. We’ll do our best to assist you.

      • If you have already taken corrective actions, you should still call us at the toll-free number shown on your notice to make sure your account accurately reflects the actions you’ve taken.

Reference Tools

Late Filing Penalties May Be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting.  *This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure.  Contact our firm today for assistance.