As outlined by Advocate Shahid (Tax Policy and Advisory Specialist). The IRS Letter LT11 is a “Final Notice of Intent to Levy. The response time is 30 days from the date of the notice. Without taking action, the IRS may start garnishing your wages, seizing your bank accounts or freezing your federal payments.
Your best response strategies will vary based on your circumstance:
Schedule a Collection Due Process (CDP) Hearing
You must make a CDP hearing request if you do not agree with the taxes due or wish to submit an alternative method of paying the taxes.
Action: Complete IRS Form 12153 and send to address provided on your letter.
Must be received by the mail box within 30 days of the LT11 letter date.
The benefit here is that any IRS action to levy will be stopped during the review by the IRS Office of Appeals.
Make a Payment Plan
If you agree that you owe the debt, but you can’t pay the total amount at once, you can come up with an installment agreement.
Action: Call the IRS directly on the telephone number listed on the notice.
Tool: IRS Online Payment Agreement Application can be used to propose a monthly payment plan.
Submit an Offer in Compromise (OIC)
If you are in a very difficult financial situation and you are unable to pay your tax debt in full, then you could be eligible for tax debt resolution.
Tool: IRS “Offer in Compromise” Pre-Qualifier to see if you qualify and determine an estimated offer amount.
Other options include claiming Currently Not Collectible (CNC) status.
You can request the IRS to stop collection activities if you are having trouble paying your basic living needs and this would be a hardship if you were to pay the IRS.
What to do: Contact IRS directly about your financial situation (You will need to give them information regarding your income and expenses).
Introduction: What IRS Letter LT11 Means and Why You Must Act Quickly
IRS Letter LT11 is an IRS final notice of intent to levy. It indicates that the IRS considers that you owe unpaid federal taxes and they may start to enforce collection of those unpaid taxes, such as by levying a bank account, levying wages or taking seizure of your property rights if you do not respond in time.
The IRS LT11 notice isn’t a typical IRS payment demand. It’s an IRS final levy notice as well as an IRS levy alert letter that’s connected to an outstanding tax obligation. The IRS notice response deadline is important because it could determine whether you have the ability to request a hearing and/or halt collection action in your IRS Letter LT11 final levy notice.
Levy does not necessarily mean lien. An IRS lien is a legal claim on property and a levy is the legal taking of property in order to pay a tax debt. This IRS certified levy notice is serious, but can be resolved if acted upon appropriately.
What Is IRS Letter LT11?
LT11 Notice of Intent to Levy Explained
An L-11 notice of intent to levy is an actual IRS collection notice L-11 sent out by the Internal Revenue Service. It becomes an Official notice of Intent to Levy and a Notice of Your Right to a Hearing. Essentially, the IRS is stating that the billing notices sent earlier didn’t pay the debt and that the collection process is more serious.
This is NOT a gentle reminder. An IRS tax levy notice is a warning stating that if the taxpayer does not respond to the IRS, IRS will take forced action for the collection. That may be taxes on wages, bank accounts or some type of property. The notice frequently is referred to as a Final Notice, meaning the taxpayer needs to take the timeframe of the IRS final notice reply deadline seriously.
IRS says, letter 11 or 1058 is a letter that notifies a taxpayer that the IRS has not received the payment of the overdue tax and is going to seize property or rights to property.
IRS Letter LT11 vs Letter 1058
Both terms, LT11 and Letter 1058, are generally mentioned in the same breath since both pertain to taxpayer’s right to request a Collection Due Process hearing. LT11 or Letter 1058 is the IRS’s Internal Revenue Manual for a Notice of Intent to Levy and Notice of Your Right to a Hearing, which are typically sent by certified mail with a request for a return receipt.
Anyone who has been reading IRS Letter 1058 vs LT11 notice knows the bottom line: both notices result in crucial taxpayer appeal rights. According to the IRS FAQ, the tax payers must file for a Collection Due Process hearing within 30-days of receiving an LT11 or L-1058, which typically involves filing Form 12153.
It is important that you receive that notice of your right to a hearing. A timely response may be used to challenge the levy, offer a payment alternative, suggest other collection options and/or increase the appeal rights available to the taxpayer before the IRS gets to work.
How Serious Is an IRS LT11 Notice?
What Can Happen If You Ignore LT11?
The IRS LT11 notice is a serious notice as it indicates that the IRS is getting closer to enforced collection. Taxpayers who may be wondering, “What happens if I do not respond to IRS LT11??” are in for a surprise and IRS will proceed with collection activities and go after a levy.
IRS says a levy is a legal way for the IRS to collect on a tax debt. This can take the form of a wage levy, from a bank account, vehicles, real estate or personal property, or other rights to property. The IRS bank levy notice or IRS wage garnishment warning can be a reality if it is not followed.
The IRS will typically start enforcement once it has determined the tax, mailed a tax notice and demand for payment, the taxpayer fails to pay the tax, and at least 30 days before the levy is issued, the IRS mails a final tax notice and demand for payment. Therefore, it is safe to say that if you are asking the question “can IRS levy after LT11 notice?”, then you can, provided that the legal notice requirements are fulfilled and the taxpayer hasn’t done anything in time.
That is why this is a letter from the IRS that should be taken seriously, and not like regular mail. It can include IRS enforcement, IRS tax debt enforcement, seizure of property or a warning that the IRS is coming to seize property or property rights.
Real-Life Example
Self employed taxpayers will be issued with a LT11 for two previous years of unpaid federal taxes. He thinks that the IRS will notify him again, so he waits. Once the deadline is over, he has the least favorable Collection Due Process hearing protection and should either request another hearing, or deal directly with IRS collections.
That’s why it’s crucial that the initial reaction to an LT11 is deadline-oriented, NOT emotion-oriented. The idea is not to “panic. It’s all about preservation of appeal rights, prevention of unnecessary enforcement, and action before the collection process goes any further by the IRS.
IRS Letter LT11 Response Deadline
The 30-Day Rule
The most critical date in an LT11 notice is the date to file request for a Collection Due Process hearing. Taxpayers can file a CDP hearing usually within 30 days from the date they receive an LT11 or L-1058, which is referred to as the Request for a Collection Due Process or Equivalent Hearing (CDP Hearing), according to the IRS. (IRS)
So, if you’ve been wondering “how many days do I have to respond to LT11?” the answer is 30 days after receiving the notice. Note that this is an IRS LT11 notice with a 30 day response time frame that’s important since it shields vital appeal rights of the IRS. Timely CDP hearing requests can get the levy issue before IRS Independent Office of Appeals before this collection is moved on.
The first priority in responding to your IRS Letter LT11 final levy notice should be the due date. Please don’t just look at the balance due. First, double check the deadline, make sure that the tax years shown apply, and determine if you want to submit Form 12153 before the collection due process deadline.
What If You Miss the 30-Day Deadline?
You can also submit a comparable hearing request, but this will not provide the same protection as a timely CDP request, if you miss IRS LT11. IRS Publication 1660 tells taxpayers that if the CDP is late and the taxpayer requests an equivalent hearing, the law does not bar levy, the collection statute is not suspended, and the taxpayer does not have a right to go to court if he or she disagrees with Appeals’ decision.
That is, a late IRS final notice of intent to levy appeal will allow you to discuss the case with Appeals, but not prevent IRS collection action in and of itself. Once the 30 days is over, the taxpayer should still respond promptly to the notice, may seek an IRS collection appeal, and may look at payment options, penalty abatement or collection alternatives before it becomes more difficult to deal with collection.
How to Respond to IRS Letter LT11 Step by Step
Step 1: Read the Notice Carefully
First, verify the tax year, amount due, date of the IRS notice, when the IRS requires a response, IRS address and if the IRS notices a LT11, Letter 1058, CP90 or other levy related notice. This is a FINAL COLECTION NOTICE NOT A REMINDER NOTICE FROM THE IRS. The IRS indicates that LT11 or Letter 1058 means that the IRS hasn’t received the back taxes due and is planning to acquire property or rights to property.
Step 2: Confirm the Tax Debt
Check balance due on the IRS account against tax returns, payment history, IRS transcripts and previous tax notifications. Before you pay or appeal, check to see if the unpaid tax balance IRS notice is accurate. You can discuss the imbalance at a limited time at a CDP hearing if it’s incorrect.
Step 3: File Form 12153 If Needed
For CDP hearing protection: Complete Form 12153 for LT11 notice prior to the deadline. Include details and explain why you are appealing the IRS levy notice. As part of Appeals’ consideration of collection alternatives, IRS may ask for financial data.
Step 4: Choose a Resolution Option
You can establish IRS installment agreement terms, apply for offer in compromise, apply for currently not collectible status, submit a penalty abatement request, pay in full, request to revoke a tax levy or request a tax levy release.
Step 5: Send the Response Properly
Send your reply to the IRS final notice to the address listed on the IRS notice. Make copies, use certified mail/tracked delivery, retain or mail proof of delivery, and avoid sending incomplete forms.
IRS Collection Alternatives After LT11
Installment Agreement
An installment agreement is typically a good option when the taxpayer agrees to the remainder but is not able to pay it all in one payment. Taxpayer requests to pay off the tax debt over a period of time with an IRS payment plan following LT11. According to the IRS, a payment plan is a settlement to pay taxes over a long period of time, and in some instances, taxpayers can fill out an application online or on Form 9465. One of the most popular IRS LT11 notice tax debt options if you require to establish IRS installment agreement terms.
Offer in Compromise
If the taxpayer is unable to pay the total debt in a manner that is realistic, and meets Internal Revenue Service (IRS) requirements, an Offer in Compromise might be appropriate. Generally, tax payers use Form 656 and financial documents to apply for offer in compromise. In this type of tax debt resolution, the IRS will consider approving cases where tax debt is eligible to be settled for less than what is owed.
Currently Not Collectible Status
Not collectible status will not be applied unless collection would cause financial hardship. An IRS hardship request will temporarily stop most collection activity, but the debt is not cancelled, penalties and interest will still accrue. This may be a way to keep IRS bank levy action at bay or to help prevent wages from being subject to an IRS levy prior to the review of the taxpayer’s financial status.
Penalty Abatement
A request for penalty abatement might be granted if there’s reasonable cause and good faith. This type of IRS final notice tax help or tax resolution help only deals with penalties and not the tax balance or interest.
Case Laws to Mention in the Article
Case law should only be used as a means of support and not a replacement for an IRS letter LT11 final levy notice response. These cases illustrate possible scenarios that could occur if an LT11 or Letter 1058 controversy is taken all the way to IRS Appeals or Tax Court.
Sego v. Commissioner, 114 T.C. 604 (2000)
When discussing what the standard of review is in Collection Due Process cases, use Sego. Where the underlying tax liability is properly at issue the Tax Court can take a de novo look at the underlying tax liability. Most other IRS Appeals decisions are considered for “abuse of discretion. The opinions of the Tax Court in recent years remain consistent with Sego for this rule.
Murphy v. Commissioner, 125 T.C. 301 (2005)
Explain the concept of “abuse of discretion” with Murphy. Generally, the IRS Appeals decision can be appealed when it is arbitrary, capricious or unsound in law or fact. It can be helpful when discussing Appeals’ actions in the case of an appeal of a levy, a request for payment plan, or a hardship argument.
Pough v. Commissioner, 135 T.C. 344 (2010)
In the collection alternatives section use Pough. It affirms the tax-payers’ obligation to give financial data when requested and to appropriately bring up problems in the course of the CDP. Appeals’ inferences or conclusions about collection alternatives under the abuse-of-discretion standard are frequently considered by Tax Court in a case that had been brought from there.
Boechler, P.C. v. Commissioner, 596 U.S. 199 (2022)
Be careful when using Boechler in the deadline section. The Supreme Court considered the 30-day rule to petition Tax Court upon a CDP determination and ruled this time limit is not jurisdictional and could be subject to equitable tolling. That does not mean that taxpayers should not bother with the LT11 deadlines. The best course of action is: Respond promptly, submit Form 12153 in time (for LT11), and maintain appeal options!
Real-Life Case Studies to Include
Case Study 1: Taxpayer Can Pay Monthly but Not in Full
The IRS issues a taxpayer a final notice of levy of $18,000. She agrees it is right, but doesn’t have the money to pay in full. Her best course of action is to fill out Form 12153, appeal for a Collection Due Process hearing, and make an offer of an installment agreement and financial information. Taxpayers can request payment plans with the IRS and Form 9465 is often a form used when requesting monthly payments. Appeals can also provide IRS payment plan after LT11 notice and payment plan options for the IRS notice LT11, including financial information including Form 433-A.
Case Study 2: Taxpayer Disagrees With the Amount Owed
A taxpayer is issued LT11, but feels the IRS balance contains incorrect penalties and/or payments made. He can complete Form 12153 by marking the box stating that he is not responsible for the IRS tax debt and provide a reason to challenge IRS tax debt. The underlying tax liability, however, can only be disputed in a CDP hearing under specific circumstances and typically where the taxpayer did not get a notice of deficiency or other prior notice to dispute the underlying tax liability. This is the area of taxpayer appeal rights and IRS Appeals Office that will come into play.
Case Study 3: Taxpayer Missed the LT11 Deadline
A taxpayer late picks up the mail and the 30 day period has elapsed. This is an IRS LT11 deadline that has been missed, but that shouldn’t mean that the taxpayer just ignores the urgent IRS levy notice. He can still file a similar IRS collection appeal request, or a hearing request. The distinction is the hearing is not as protected as a timely CDP hearing and could not necessarily prevent levy action in the same manner.
Common Mistakes to Avoid After Receiving IRS LT11
Once you have been issued LT11, the worst thing you can do is to ignore it when you can’t afford to pay it in full. The IRS LT11 notice or Letter 1058 is not an indication of the IRS hasn’t gotten paid for back taxes; it simply means that if the situation remains unresolved, the IRS will seize the property or rights to property.
One of the serious errors would be failing to meet the time limit for the 30-day CDP hearing. Taxpayers can seek a Collection Due Process hearing within 30 days after receiving a LT11 or L-1058, typically on Form 12153, with the IRS. You could make it more difficult to defend against IRS action and restrict your options for appeal if you miss this deadline.
Another common mistake made by taxpayers is calling the IRS without first reviewing the tax years, balance due, prior payments and penalties. If the IRC does not receive financial documents, there is no reason to suspect that they will be the ones to make the payments. If the IRC only gets vague reasons or wants a payment plan with no financial documents, then it’s not going to make the payments.
When to Contact a Tax Professional
IRS LT11 assistance should be looked into by a taxpayer when the amount of balance is large, the deadline is near or when wages and bank accounts are at threat. According to the IRS, an LT11 (also known as a Letter 1058) indicates the IRS has not received payment for unpaid taxes on property or rights to property, and will proceed to take the property. This is not a typical IRS tax bill, it’s a levy notice.
Extensive documentation is required for financial hardships, a missed prior notice, business payroll taxes and professional assistance is especially important if the taxpayer wants to contest the amount of tax owed. A tax attorney for IRS LT11, IRS final levy notice attorney or qualified representative will be able to look at the deadline, tax years, balance of the account, penalties and the options for appeal.
Taxpayers have up to 30 days, typically within the time they have to file from receipt of a letter (LT11 or L-1058) to request a Collection Due Process hearing, according to the IRS. By failing to meet that deadline, the IRS appeal representation may be weakened and protection against the IRS collection efforts is decreased.
Contact a professional before the IRS garnishes wages, bank funds, or property if you need IRS notice of lien assistance or IRS tax resolution assistance or if you want to avoid IRS wage garnishment. If responded in a timely fashion, rights to appeal may be preserved and a smoother road to payment, hardship or another resolution may be established.
Conclusion
IRS Letter LT11 is taken seriously but it’s not too late to take action before the IRS levy process gets any further. The best answer is to read the notice, verify the response time, and check the tax years and balance due, and determine if a Collection Due Process hearing is required.
If you wish to challenge the levy, appeal the levy or discuss a payment plan, submit Form 12153 prior to the deadline. Having a timely response can preserve appeal rights and provide an opportunity to submit a realistic collection alternative, like an installment agreement, an Offer in Compromise, currently not collectible status, hardship request or penalty abatement request.
Never let wages, bank accounts or property rights be garnished by the IRS. The right way to respond to the IRS Letter LT11 final notice of a levy is to be calm, focused on the deadline, and to provide the IRS with accurate financial information prior to taking any action on you.
FAQs
What is IRS Letter LT11?
IRS Letter LT11 is a final notice of intent to levy and notice of right to a hearing. It means that the IRS is asserting that unpaid taxes are still owed and they will likely begin taking steps to have the tax enforced on property or rights to property.
Is IRS Letter LT11 serious?
Yes. LT11 is a serious notice, as it could be issued prior to IRS action such as a bank levy, wage levy or property levy. It should be considered an IRS collection notice due to the deadline.
How many days do I have to respond to IRS LT11?
In general, the IRS will allow taxpayers 30 days to file a Collection Due Process hearing request on Form 12153 from the date they receive LT11 or Letter 1058.
What is Form 12153 used for?
After some of the IRS lien or levy notices a Collection Due Process hearing or other hearing is requested on a Form 12153. Should be delivered to hearing-request address as listed on the CDP notice.
Can the IRS levy my bank account after LT11?
Yes. The IRS may levy taxpayer’s property, rights to property (including bank accounts), if the taxpayer does not make arrangements, does not pay, or does not appeal the tax properly.
Can I set up a payment plan after receiving LT11?
Yes. Financial information will be requested if necessary and a payment plan or installment agreement should be requested upon receipt of LT11 but before the deadline.
What happens if I miss the LT11 deadline?
Such hearing is not as well protected as a timely CDP hearing, and does not grant the same Tax Court review rights with Appeals’ decision.
Do I need a tax attorney for IRS LT11?
While not necessarily, the assistance of a professional is helpful when the debt is significant, the deadline is approaching, the IRS balance is being disputed, or there’s a risk of the wages, bank accounts, or business assets being lost.