IF Statement With BEGIN END Block

I'm working on a stored procedure which includes an IF statement at the end of the procedure which appends my sql call with two lines. But I'm getting an error that probably comes from the fact that I have a nested BEGIN END block in my overall procedure. Can anyone tell me if my assumption is correct and help polish of the syntax?

The error I'm getting is:

Msg 156, Level 15, State 1, Procedure payments_sp, Line 55

Incorrect syntax near the keyword 'AND'.

and the sql code looks like this:

SET ANSI_NULLS ON
GO
SET QUOTED_IDENTIFIER ON
GO

ALTER PROCEDURE [dbo].[payments_sp]
-- Add the parameters for the stored procedure here
@payment_type varchar(15),
@mydate smalldatetime
AS
BEGIN
-- SET NOCOUNT ON added to prevent extra result sets from
-- interfering with SELECT statements.
SET NOCOUNT ON;
-- Insert statements for procedure here
DECLARE @myBool1 tinyint, @myBool12 tinyint
SET @myBool1 = 1
IF (@payment_type = 'CODE1' OR @payment_type = 'CODE4')
SET @myBool1 = 1
ELSE
-- the payment type must be 'CODE1' or 'CODE2'
-- set the value to false
SET @myBool1 = 0
IF (@payment_type = 'CODE3' OR @payment_type = 'CODE4')
SET @myBool12 = 1
ELSE
SET @myBool12 = 0

SELECT
SUM(Mydatabase.dbo.[PAYMENTS].[AMT_RECD])
FROM Mydatabase.dbo.[PAYMENTS]
INNER JOIN Mydatabase.dbo.[ACCT]
ON Mydatabase.dbo.[PAYMENTS].[SOME_UID] = Mydatabase.dbo.[ACCT].[SOME_UID]
WHERE Mydatabase.dbo.[ACCT].[CLIENT] = 'MY CLIENT'
AND Mydatabase.dbo.[PAYMENTS].[DATE_RECD] = @mydate
AND Mydatabase.dbo.[PAYMENTS].[BOOL] = @myBool1
AND Mydatabase.dbo.[PAYMENTS].[SOURCE] != 'val1'
AND Mydatabase.dbo.[PAYMENTS].[SOURCE] != 'val2'
AND Mydatabase.dbo.[PAYMENTS].[SOURCE] != 'val3'

IF (@payment_type = 'CODE3' OR @payment_type = 'CODE4')
BEGIN
AND Mydatabase.dbo.[PAYMENTS].[SOURCE] != 'val4'
AND Mydatabase.dbo.[PAYMENTS].[SOURCE] != 'val5'
END
END
GO

SET ANSI_NULLS OFF
GO
SET QUOTED_IDENTIFIER OFF
GO