What the LT11 Notice from the IRS Means and What to Do

IRS Notice of Intent to Levy (LT11), which is very similar to Letter 1058, informs you that the IRS is about to take action against your unpaid tax debt. It’s a jarring notice. Typically, it comes after you’ve received several other letters for overdue taxes. Not acting means the IRS will seize your property or the right to your property.

Here’s what it means, why it happens, and most importantly, what to do. To get help now, contact us at Nashville Tax Solutions today.

Key takeaways:

• The LT11 notice informs you that the IRS is going to seize your property or your right to that property.
• The IRS may seize your assets through wage garnishment, bank account seizures, or property seizures.
• If you paid your debt, but did not receive credit for doing so, you’ll need to submit proof of your payment to the IRS quickly.
• If you cannot pay the tax debt you owe, you can seek solutions such as an Offer in Compromise or a payment plan, in some cases.
• Nashville Tax Solutions can offer guidance to you quickly through this process.

What Is an IRS Notice of Intent to Levy (LT11)?

LT 11 is an IRS Intent to Levy Notice With Your Right to a Hearing. It alerts you that the IRS is planning to start seizing your assets for unpaid taxes. You have 30 days to pay the debt or appeal with a Collection Due Process hearing. If you don’t take action by the deadline, the IRS will move forward with seizing your assets.

At this point, the IRS is no longer issuing a simple request for payment – this is a final warning. They are stating they plan to seize your assets to pay the tax debt owed. If you fail to act quickly, the IRS will act and has the legal authority to do so. Don’t ignore this letter if you owe back taxes.

What Does “Levy” Mean?

A notice of “levy” indicates the IRS plans to seize property or take property from you to pay the tax debt you owe. They have several ways they can do so:

• Wage garnishment: Attaching a levy to your wages means the IRS seizes all or a portion of your wages when your employer pays them to you. Employers must comply with this order.
• Bank levy: In this situation, the IRS takes action to seize the funds already in your bank account, up to the amount you owe.
• Asset levy: This seizure is of some form of property. It could include vehicles, real estate, personal property, or business assets such as equipment or inventory. The seizure of physical assets is generally a last resort, but it’s very possible, especially if you owe a significant debt or owe businesses taxes.

The IRS may also seize state tax refunds, Social Security benefits, retirement income, investment accounts, or most other property. There are some exemptions, but not many. If you’ve received a final warning like LT11, you need to act quickly.

What Can the IRS Do After Sending an LT11 Notice?

At this point, you are nearly out of time. You need to act quickly to prevent these actions from occurring. Once the IRS takes this step, they can:

• Contact your employer to garnish your wages.
• Contact your financial institutions to seize funds in your bank account.
• Take steps to seize other assets. This might include your investment accounts, the vehicles you drive every day (or infrequently), and the real estate you own.
• File a Notice of Federal Tax Lien (note that the IRS does not have to notify you of this action, but it is likely to occur at this point if it has not already happened).

Simply, you need to respond to these actions right now. If you fail to do so, it can and will lead to financial losses and additional complications.

Your Rights and Options After Receiving an LT11 Notice

You have both rights and options after receiving an LT11 Notice. It can be beneficial to speak to a tax lawyer at this point or determine which of the following actions best suits your situation:

Collection Due Process Hearing

The Collection Due Process (CDP) Hearing is your right. You can request this hearing by submitting Form 12153 to the IRS. You must do this within 30 days of the date listed on the LT11 Notice. This is the deadline you have for either filing a request for a hearing or paying the tax debt you have.

During the CDP hearing, you have the right to discuss alternatives to a levy. This is your chance to offer options such as the following to the IRS:

• Installment Agreement Plan: An installment agreement allows you to make payments over a period of time for the debt owed. A payment plan with the IRS may be possible depending on the circumstances and your ability to show the IRS you can make payments.
• Offer in Compromise (OIC): An IRS Offer in Compromise may help you offer the IRS a specific amount of payment that pays the debt off for less than the full amount you owe, but does so within a specific amount of time.
• Currently Not Collectible (CNC) Status: In situations where you are facing financial challenges, filing for CNC status, or hardship tax relief, may provide an avenue for holding off the IRS because you cannot pay any of your debt right now.
• Innocent Spouse Relief: In cases where the tax debt is due to actions your spouse took without your knowledge, or if it would be unfair to hold you responsible for the tax, Innocent Spouse Relief can absolve you of your spouse’s or former spouse’s tax liability.

You can also dispute the amount owed, but only if you haven’t had a chance to do so previously. For best results, consider working with a tax professional.

The Importance of the Collection Due Process (CDP) Hearing

The CDP hearing enables you to discuss alternatives to a levy or the seizure of your assets. It’s typically an informal meeting with an impartial IRS Settlement Officer. It is not conducted in court, but instead is usually held over the phone.

After the CDP hearing, a Notice of Determination occurs. This outlines the decision from the IRS, the terms of the agreement they offer, and any specific details you need. It also advises you that you can further appeal this decision through judicial review.

During the CDP hearing, the IRS will not move forward with any collection actions. Once you receive the determination, you get 30 days to appeal in Tax Court. If you appeal, collection actions remain paused. If not, the IRS can continue with the levy process at that point.

How to Respond to an LT11 Notice

You can request a CDP hearing by completing Form 12153. You have just 30 days to complete this form and submit it to the IRS. It can be beneficial to send it through certified mail to make sure the IRS receives it.

This form is basic and direct, but you must be able to complete it fully and in time. You will need to answer questions about yourself and the tax due.

Then, you will need to clarify why you want this hearing by choosing one of the listed options or writing in your own. Include any alternative solutions you may have. Once you complete the form, mail it to the address on the form where the IRS tells you to send it.

What if You Miss the 30 Day Deadline?

If you miss the 30-day deadline, you risk the IRS seizing your assets – but you still have one appeal option. You can request an equivalent hearing. This request does not stop collection actions, but it does give you a chance to talk about resolution options with a neutral party.

Unfortunately, you don’t have any appeal rights after any equivalent hearing – the results will stand. However, if there’s still a dispute, you have some options, such as paying and seeking a refund.

An equivalent hearing doesn’t offer the same benefits as a CDP hearing, but in some cases, it’s the strategic option because it doesn’t pause the collection clock.

Common Mistakes to Avoid

It is not uncommon for individuals to make several critical mistakes that can lead to further complications and limitations. Avoid the following:

• Ignoring the notice. This simply allows the IRS to levy your assets.
• Delay taking action. Once you see the notice, contact a tax attorney or request a CDP hearing unless you can pay the full amount owed by the date listed on the notice.
• Attempt to handle the situation without professional help. A professional will help you understand your options, protect your rights, and negotiate with the IRS on your behalf.
• Provide inaccurate information. Be open and honest with the IRS. Provide all information you have.

How Nashville Tax Solutions Can Help

Nashville Tax Solutions can assist taxpayers who have received an LT11 notice in several critical ways:

• Review the notice and assess the situation.
• Help taxpayers understand their rights and options.
• Represent taxpayers in communications with the IRS.
• Help taxpayers request and prepare for a CDP hearing.
• Negotiate with the IRS to find a resolution.

It can be a scary notice to receive, but our extensive background and resources enable you to know what all of your options and rights are. The sooner you reach out to us, the faster we can start working for you.

Taking Action to Avoid Levy

At this point, there is no other option to take but to act. Failing to do so puts your assets at risk. That may mean you cannot access your car to drive to work or pay your bills through your bank account.

When you take prompt action, you protect your assets. You avoid the worst possible outcome. Nashville Tax Solutions is the resource you need in these situations. Contact us now for legal guidance.