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At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is how we get compensated.
At Solvable, we care about your financial well-being and are here to help. Our research, articles and ratings, and assessments are based strict editorial integrity. Our company gets compensated by partners who appear on our website. Here is
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If you have unpaid federal taxes and you did not respond to IRS notice 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 back taxes.
What is IRS Notice 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 back taxes. The year from which you owe taxes is printed on the top of the notice, 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 back taxes.
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.
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 back taxes 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 tback taxes.
How to Deal with Unpaid Back Taxes and a CP503 Notice
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.
Even after you’ve received a CP503 Second Reminder About Unpaid Taxes, you have many options to deal with your back taxes, 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.
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 back tax assistance company can also help you negotiate an offer in compromise, which could reduce fees and penalties and settle your back taxes 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.
If you can demonstrate that paying your back taxes 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 back taxes. The important thing is to take action immediately. Do not ignore notice CP503.
What Happens If You Ignore Notice CP503 or Miss The Deadline?
If you ignore your second reminder about unpaid taxes, it is only going to get worse.
You’ll receive Notice 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 back taxes, 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 Notice 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 back taxes before it gets any worse.
Solvable is a for-profit company that helps customers resolve their tax problems, but a free service for consumers. Partners cannot pay us to guarantee favorable editorial reviews or ratings. We do not publish favorable (or unfavorable) editorial reviews or assessments at the direction of an advertiser or partner. We always work to put consumers first and do our best to provide value in meaningful ways, but our reviews are subjective.
How We Make Money
Solvable is compensated by some of the companies seen on our website. Most often, Solvable receives fees when one of our readers clicks, fills out a form, applies for, or receives a financial product from one of our partners. We also earn fees for capturing consumer stories and writing about them, displaying advertising, having our partners sponsor certain parts of the site, and writing content that may be relevant to our partner and their audience. This compensation may impact where products appear on this site, including article pages, comparison listings, the order in which they appear or if they will even appear on a given page, and our matching recommendations. Solvable has not written about, reviewed, or rated all financial products available to consumers.
In addition, we may be compensated in the following ways:
Referrals to consumers who use the online form or locator line that may provide expert answers to questions;
Marketing tax resolution, tax preparation, tax audit help and general tax assistance.
Referrals to services that help consumers with tax resolution, tax preparation, tax audit help and other tax issues.
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We hope that you find Solvable helpful in your efforts to get a fresh start.
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Student Loan Refinancing Advertiser Disclosure
Student loan offers that appear on this site are from companies or affiliates from which solvable may receive compensation. This compensation may impact how and where products appear on this site (including for example, the order in which they appear or whether a lender is “featured” on the site). solvable does not include all student loan companies or all types of offers available in the marketplace.
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Potential savings may vary based on the interest rates, balances and remaining repayment term of the loans you are seeking to refinance. Your overall repayment amount may be higher than the loans you are refinancing even if your monthly payments are lower. Variable rate options will fluctuate over the term of your loan with changes in the LIBOR (or other index utilized by the lender) rate, and will vary based on applicable terms and presence of a cosigner. Fixed interest rates may be based on applicable terms and presence of a co-signer. Additional terms and conditions, and rates are subject to change at any time without notice and may not be available in all states or for all types of current student loans. Such changes should only apply to applications taken after the effective date of change. Please note: Due to federal regulations, Lenders are required to provide every potential borrower with disclosure information before they apply for a private student loan. The Lender you select is required to provide you with an Application Disclosure and an Approval Disclosure within the application process before you accept the terms and conditions of your loan. solvable is not a lender or creditor, it does not offer, extend or alter credit terms. Only participating lenders can perform the full application and deliver the required disclosures, please ask your lender about rates, terms, fees, and potential discounts that may be available for each product.
Please Note:
Certain federal and private student loans may not be eligible for consolidation/refinance.
Certain consolidation/refinance plans may result in higher monthly payments or negative consequences (i.e. prepayment penalties).
Consolidation/refinance may lead to other negative results, such as loss of grace periods.
Loans in default generally cannot be consolidated until completion of a repayment trial plan so tell your lender if you are in default and determine relevant options (be wary of those asking for upfront fees as well)
Other options or programs may fit your needs (i.e. personal loan, debt consolidation and/or debt relief). Consult your financial and/or tax advisor prior to making any decisions.
Solvable is not a creditor as it does not offer, extend or alter credit; rather it is an online market lead generator that allows consumers to shop and compare rates, terms and costs associated with financial products such as mortgages, auto loans, personal loans, student loans, etc. solvable does not originate or fund any product it markets; rather it has a network of lenders or Partners/affiliates. You may choose to speak with one or more of these lenders or Partners/affiliates to determine what your actual terms and savings may be. Only a lender can provide you with a formal application for credit, your inquiry form here is merely an expression of interest and/or intent to obtain credit or assistance. You must discuss your actual credit situation and fill out the lender’s required documents prior to obtaining an extension of credit. Network lenders may not have the best or the lowest rates so you are encouraged to continue to shop and compare additional lenders, credit unions, local financial institutions, etc. to ensure you are truly getting your best deal for your situation.
You should contact your tax professional or other financial advisor to determine if you can actually realize savings by refinancing when it can extend the life of your current loan. You should ask the lender about all terms, rates, fees and costs associated with each product and if you will realize a net tangible benefit from the same. All initial estimated savings is done by trying to calculate what your rate may be; however, solvable does not have that information and cannot guarantee potential savings or that lenders will approve you for such product that would warrant those savings. Rates are not guaranteed and change daily. Lenders/Brokers/Dealers/Partners that perform the actual underwriting will have to determine if you meet their underwriting criteria which is unknown to solvable at the time of matching/offer/quote delivery. All amounts are estimates and examples only and do not represent an actual offer.
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