What Can You Do If You Receive a CP503 Form from the IRS?

Dawn Allcot
Expert Contributor
Last Updated:
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  • If you have unpaid federal taxes and you did not respond to IRS form CP501, your first notice about past due taxes, you will receive CP503 – Second Reminder About Unpaid Taxes.
  • To avoid further IRS action, you should take care of the CP503 within 10 days.
  • If you can’t pay your delinquent taxes, consider consulting a tax professional to negotiate a payment plan or reduce your tax debt.

What is IRS Form CP503?

If you receive a CP503 – Second Reminder About Unpaid Taxes from the IRS, it’s imperative you address the tax bill immediately.

A CP503 is a letter the IRS sends via certified mail to inform you that you have an unpaid tax debt. The year from which you owe taxes is printed on the top of the form, along with the amount you owe, and the deadline to pay the tax bill. Usually, you have 10 days to respond to a CP503 before receiving another IRS notice expressing even greater urgency.

The obvious thing to do when you receive a CP503 is to pay the tax bill in full immediately. You can mail a check to the IRS, call the IRS to make a payment, or make a payment easily online using your checking account, credit, or debit card. Keep in mind, there may be additional fees associated with paying by debit or credit, but those fees will certainly be less than any interest, fees, and penalties that will continue to accumulate if you fail to pay your delinquent tax debt.

What Happens If You Can’t Pay the Taxes You Owe?

If you can’t pay the amount owed, you shouldn’t ignore the tax bill. Instead, assess your situation and your options to come up with the money.

What Can You Do If You Receive a CP503 Form from the IRS?

You might consider:

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  • Using your credit card to pay the bill
  • Borrowing the money from a friend or family member
  • Borrowing from your 401K retirement account
  • Taking out a home equity loan or home equity line of credit
  • Applying for a personal loan

Are you noticing a pattern? It is always better to find a way to pay off tax debt than to ignore the IRS. Any interest charges on credit cards or personal loans are likely to be lower than IRS penalties and interest, not to mention that incredible stress that comes from having the IRS contacting you trying to collect unpaid tax debt.

How to Deal with Unpaid Tax Debt and a CP503 Form

If you owe a large amount and have no way to get the money before the deadline, consider consulting with a tax attorney or tax accountant to explore your options.

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Even after you’ve received a CP503 Second Reminder About Unpaid Taxes, you have many options to deal with your tax debt, although you don’t have much time to do so.

Have A Professional Review Your Tax Returns

Is it possible that you made a mistake in filing your tax returns, missed a few deductions, and may not owe as much as you think you do? An experienced tax accountant can review your tax returns for accuracy and possibly reduce your overall tax bill by filing an amended return if there were any mistakes.

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How Much Tax Debt Do You Owe?

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Negotiate a Payment Plan With the IRS

Either alone or with help from a tax professional advocating on your behalf, you can successfully negotiate an installment agreement payment plan to pay off your debt over time.

File for an Offer in Compromise

A tax debt relief company can also help you negotiate an offer in compromise, which could reduce fees and penalties and settle your tax debt for less than what you owe. Tax professionals understand the language to use to increase the likelihood that the IRS will accept the offer. Use our Offer in Compromise Calculator to determine whether or not you are eligible for an offer.  

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File for Currently Not Collectible Status

If you can demonstrate that paying your tax debt will cause extreme financial hardship, you may be able to file for Currently Not Collectible (CNC) status, which will halt IRS collections actions on the debt. However, interest and penalties will continue to accrue and, when your income rises and your financial situation improves, you’ll be facing an even bigger tax bill.

Many people deal with unpaid tax debt. The important thing is to take action immediately. Do not ignore form CP503.

What Happens If You Ignore Form CP503 or Miss The Deadline?

If you ignore your second reminder about unpaid taxes, it is only going to get worse.

You’ll receive Form CP504 – Intent to Levy State Tax Refund or Other Property. Here is where things get serious. The IRS could take your state tax refund to cover unpaid federal tax debt, or even file a lien on your property.
Besides, penalties and interest will continue to grow, making it harder to pay your tax bill the longer you ignore it.

With options available to set up a payment plan or even negotiate a settlement, ignoring IRS Form CP503 – Second Reminder About Unpaid Taxes isn’t worth it.

The pros at Solvable can help you find a reputable tax expert to manage your tax debt before it gets any worse.

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Next Steps:

Dawn Allcot
Expert Contributor
Last Updated: