IRS LT11 Notice: Don't Panic Immediately , but Don't Ignore It Either
What taxpayers need to know about the IRS final notice before levy action
The IRS just sent you an LT11 Notice. Is it time to pack your bags and move to a deserted island? Not quite. But it is time to pay attention.
An IRS LT11, officially titled Notice of Intent to Levy and Notice of Your Right to a Hearing, is one of the most important collection notices the IRS sends. It is sometimes issued as Letter 1058. Unlike earlier reminder notices, the LT11 tells you the IRS intends to begin enforced collection unless the problem is addressed.
The good news is that you still have options. In many cases, the LT11 is also a valuable opportunity to stop collection action, preserve appeal rights, and choose a resolution strategy before the IRS chooses one for you.
What Is an LT11 Notice?
Think of the LT11 as the IRS saying, "We have sent reminders. Now we are moving to the serious part of the conversation."
The notice tells you that the IRS intends to levy certain property or rights to property. It also explains your right to request a Collection Due Process hearing with the IRS Independent Office of Appeals.
Review the Official IRS Notice
You can review the official IRS LT11 notice here:
https://www.irs.gov/pub/notices/lt11_english.pdf
The IRS also provides a plain-language explanation of the LT11 and Letter 1058 here:
https://www.irs.gov/individuals/understanding-your-lt11-notice-or-letter-1058
What Is a Levy?
Many taxpayers confuse a federal tax lien with a tax levy. Here is the easiest way to remember the difference:
A lien is a claim. A levy is a taking.
A federal tax lien is the government's legal claim against your property. A levy is when the IRS actually takes money or property to satisfy a tax debt.
A levy may reach items such as:
· Money in a bank account
· A portion of wages or salary
· Certain Social Security benefits
· Business income or accounts receivable
· State tax refunds
· Contents in a safe deposit box
How Did It End Up at This Point?
The LT11 usually does not arrive out of nowhere. The IRS sent earlier balance-due notices, such as the CP14, CP501, CP503, or CP504. Some taxpayers could not afford to pay. Others moved, misunderstood the notice, or hoped the IRS would eventually just go away and lose interest.
Unfortunately, the IRS has a very long memory and a computer system that does not get tired of sending letters.
The 30-Day Deadline Is Really Important!
You generally have 30 days from the date of the LT11 notice to request a Collection Due Process hearing. A timely request can preserve important appeal rights and generally prevents most levy action while the appeal is pending.
If the deadline is missed, an Equivalent Hearing may still be available, but it does not provide all the same protections. This is one reason taxpayers should not place the LT11 in the infamous kitchen drawer labeled "I will deal with this later."
What If You Cannot Pay the Full Balance?
Receiving an LT11 does not automatically mean you must pay the entire balance immediately. In fact, depending on your circumstances, other collection alternatives may include:
· A short-term payment extension
· An installment agreement
· Currently Not Collectible status when payment would create financial hardship
· An Offer in Compromise
· A Collection Due Process appeal
· Penalty relief in appropriate cases
· Other strategies based on your income, expenses, assets, filing history, and collection statute
What If You Do Not Agree That You Owe the Tax?
Do not assume the amount on the notice is automatically correct. The IRS may be collecting a balance caused by a Substitute for Return, an unprocessed amended return, an audit adjustment, a missing payment, identity theft, or another issue.
In many cases, the tax itself can still be challenged. In others, the immediate goal may be to stop collection while the correct procedure is used to address the underlying balance. The right approach depends on how the balance arose and what opportunities were previously available to dispute it or are still available to correct it.
Before You Call the IRS
A quick, unprepared call can sometimes create more problems than they solve. Before contacting the IRS and waiting on hold for hours, it helps to understand:
· Which tax years are involved
· Why the balance was assessed
· Whether all required tax returns have been filed
· Whether the 30-day appeal deadline is still open
· Whether you agree with the balance
· What payment or hardship options may fit your circumstances
· What financial information the IRS may request
Common Mistakes After Receiving an LT11
· Ignoring the notice because you cannot pay in full
· Waiting until the final days of the appeal period
· Calling the IRS without first understanding the case
· Agreeing to a payment amount that is not affordable
· Assuming every tax balance is correct
· Failing to file missing tax returns
· Believing a levy cannot happen because nothing has happened yet
Frequently Asked Questions
Will the IRS levy my bank account immediately?
It depends; there are procedural steps and notice requirements before levy action can take place. However, the LT11 is a final notice, so delaying a response is risky.
Can I still get a payment plan after receiving an LT11?
Generally, yes. Eligibility depends on the amount owed, filing compliance, finances, and other case facts.
Can the IRS levy wages?
Yes. A wage levy can continue from paycheck to paycheck until the levy is released, the debt is paid, or another resolution is reached.
Can the IRS take money from a bank account?
Yes. A bank levy generally captures funds in the account at the time the levy is received, subject to applicable rules and holding periods.
Can I challenge the tax at the hearing?
Yes. The ability to dispute the underlying liability depends on whether you previously had a proper opportunity to contest it and or still can contest based on available options.
Does receiving an LT11 mean I am going to jail?
No. The LT11 is a civil collection notice. It is about collecting a tax debt, not putting you in jail.
The Bottom Line
An LT11 is serious, but it is not a reason to panic. It is a reason to act. The earlier you address the notice, the more likely you are to preserve your rights and evaluate the full range of collection alternatives.
Think of the LT11 as the IRS saying, knock knock, "This is your opportunity to solve the problem before we solve it for you."
Need Help with an LT11 Notice?
If you received an IRS LT11 Notice, do not guess and do not wait until your paycheck or bank account becomes part of the conversation. Tax Relief Services can review the notice, explain the available options in plain English, and help develop a strategy based on your specific circumstances.
Contact us at www.TaxReliefHawaii.com
About the Author
David M. Ramirez, EA, JD, MST, USTCP, NTPI Fellow, CTRC, is a former IRS agent and the President of Tax Relief Services in Honolulu, Hawaii. For more than 25 years, he has helped individuals and small businesses resolve IRS and Hawaii tax problems. He also teaches and writes about IRS representation, taxpayer rights, collection alternatives, and practical strategies for dealing with the IRS.
Disclaimer: This article is for general educational purposes only and is not legal or tax advice. Every case is different. Consult a qualified tax professional about your specific facts and deadlines.
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