CP 504

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I do not often write an introduction to my own blog post but am making an exception today. Today’s post is short and it is about a taxpayer right’s victory. I want to use the extra space to celebrate some other victories. Of course at PT we are excited about Villanova’s basketball victory for any of you who missed the game. Basketball is a unifying force at the school and a great source of pride. I miss going to the campus gym every morning and walking through the lobby which is a museum of their victories. Villanova had another great victory announcing the selection of Christine Speidel as its new tax clinic director. In addition to joining Villanova to run its tax clinic, Christine is joining procedurallytaxing as a member of our blogging team. She has written several guest posts over the years. Look for many posts by her in the future. As a law student she worked in the Consumer Law Clinic of the Legal Services Center where I now teach. She will bring a lot of new energy to the blog.

Another matter to celebrate is the annual publication of the low income taxpayer report. The report catalogs the work of these clinics and may be of interest to those of you with interest in the tax issues facing individuals. Volume 8 of recent journal article looks at the students who work in clinics and reports on how that work encourages (and discourages) future pro bono efforts of the students exposed to representation during school. Keith

On December 2, 2016, I wrote a strongly worded post about the inappropriate language in Letter CP 504. The CP 504 letter the IRS was sending at the time said that the if the taxpayer did not pay the tax listed on the form the IRS could levy on their property and listed a litany of types of property on which the IRS could levy. The problem with the letter was that the CP 504 letter does not give the IRS that right. The statements made in the letter were legally wrong and could have inappropriately led taxpayers to the wrong conclusion about the action the IRS could take to collect the unpaid assessment of taxes.

In addition to blogging the issue, I had discussions with the appropriate persons at the IRS explaining why I thought the letter was wrong and should be changed to eliminate the language stating that the IRS could levy on a taxpayer’s property. The IRS listened and it made a commitment that it would change the letter to make it accurate. The persons with whom I spoke indicated that the change would not occur until January 2018 – a period approximately one year after committing to the change. I knew that changing an important letter in the collection notice stream would take time and waited.

Recently, one of my clients received the new and improved CP 504 letter. The IRS made the promised changes and no longer tells taxpayers that it can levy on their property in the manner stated in the prior version of this letter. You can see a redacted version of the new letter here. You can find a copy of the prior letter in the earlier post if you want to compare the letters and note the changes.

The IRS deserves credit for changing the letter and appropriately responding to criticism. The collection notice stream is an important part of the collection process. Getting the language in the letters sent during that stream to be accurate as well as persuasive is an important part of the collection function at the IRS.


  1. Congrats on getting a successor although she will have big shoes to fill. Also, as long as I have worked in this area (December, 1978), I never thought I would live to see the IRS change the wording of its forms which are too often (one is one too many) misleading. I often have wondered the extent to which this has been intentional but I am willing to reconsider that position if the IRS will actually listen to a representative and then follow up on the change. I wonder if this has happened before?

  2. To avoid doing yet another tax return, I took a few moments to compare the list of Tax Court trial locations to the list of Low Income Taxpayer Clinic locations. Here are places where Tax Court judges sit, with no clinic nearby:

    Alabama: Birmingham and Mobile. The only clinic in the state is at Montgomery.

    Florida: Jacksonville. (Gainesville is 70 miles away.) Tampa. (St. Petersburg is across the bay and Plant City is 25 miles inland.) I was surprised that the Tax Court does not go to Orlando.

    Idaho: Pocatello. (Boise is 240 miles south.)

    Louisiana: Shreveport. (One clinic in New Orleans.)

    Maine: Portland (halfway between Bangor and Boston).

    Minnesota: St. Paul. But of course there is Minneapolis nearby.

    Mississippi: Jackson. The only clinic is in Oxford.

    Montana: Billings. The only clinic is in Helena.

    Nevada: Reno. (Las Vegas is four hours away if you drive 100mph past Death Valley.)

    South Carolina: Columbia (closer to Charlotte NC than to Greenville SC).

    South Dakota: Aberdeen (262 miles from Vermillion).

    Tennessee: Knoxville (25 miles from Oak Ridge).

    Texas: Dallas (but two clinics in Fort Worth). El Paso (closer to Albuquerque than to Lubbock). No clinics in Austin, but the Tax Court avoids the Texas capital also.

    Virginia: Roanoke (but a scenic one-hour drive from Lexington).

    As I write this I am thinking of my friend here in Arizona who uses the Internet to communicate regularly, by video and voice, at no cost, with his family in a small city 300 miles from Moscow, Russia.

    At least half the United States is more than 100 miles away from an LITC, and millions of people live there. How much would it cost for an Internet Tax Clinic, anywhere, that allows taxpayers in need to receive assistance despite their choice not to reside in urban areas?

    Many towns have community colleges or other schools where facilities are available for those without an Internet connection. Even more places have libraries. If help with teleconferencing is not available for free, a small stipend would encourage participation.

    As I learned to ask in an IRS management-intern class more than thirty years ago, “Don’t tell me why it can’t be done. Tell me how you are going to do it.”

    • Nick Xanthopoulos says

      The United States Tax Court maintains a list (www.ustaxcourt.gov/clinics/clinics.pdf) of which Low Income Taxpayer Clinics (LITCs) cover which trial sessions. Some LITC practitioners travel far from their main office to cover calendar calls. As a result, comparing the list of US Tax Court trial locations to the LITC locations listed in Publication 4134 paints a less complete picture than the Court’s list of participating LITCs.

      • I admire the LITC practitioners who cover calendar calls. However, meeting a client for the first time on the day of trial, when both the client and the lawyer may be far from home, is not an ideal circumstance. At least some trials may be avoided by earlier involvement.

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