The IRS LT11 notice indicates that the agency has not received payment for your past-due taxes. Although they’ve tried to reach out to you multiple times, they have not received any payment or any communication regarding payment plans or other solutions. If you don’t take swift action, there’s a very real chance of you losing your property. 

Not sure how to respond to LT11 or what your next steps should be? Damiens Law can help you explore your options.

Key Takeaways

• The IRS sends LT11 after sending a series of other collection notices.
• After sending LT11, the IRS has to wait 30 days before levying your assets.
• To keep your assets, you must respond promptly to LT11 and come up with payment arrangements.

• Damiens Law can help you address your tax issues to avoid levies and other negative outcomes.

What You Need to Know About the LT11 Notice

The IRS sends the LT11 notice after a taxpayer has ignored several other demands to pay their taxes. This letter serves as your final notice to make arrangements or face a levy (seizure) on your assets. You have 30 days to take action before the IRS starts taking assets. 

You may receive this notice if you owe taxes from a return you’ve filed, if the IRS adjusts your return through an audit or based on info received from third parties, or if the IRS assesses tax using a substitute for return. 

If you disagree with the amount you owe or the IRS’s plan to levy your taxes, you have the right to a Collection Due Process hearing or an equivalent hearing. During this hearing, you can dispute the IRS’s decision to levy your assets. If you haven’t previously had a chance to dispute the balance owed, you may also dispute that. 

In most cases, the IRS cannot take assets until it sends this notice or a similar final intent to levy notice. However, there are exceptions in the following cases: 

• The IRS is planning on levying a state tax refund, 
• The IRS issues a disqualified employment tax levy, or 
• The tax debt is owed by a federal contractor.

Important Information Included in LT11

LT11, Notice of Intent to Levy and Notice of Your Right to a Hearing, contains everything you need to know regarding what you owe, the IRS’s next steps, and your options. You can start by looking at the upper right corner to verify that the letter includes your SSN and is intended for you. The Billing Summary part of the notice includes the initial amount of your tax debt, any penalties charged to your account, and interest charges—all adding up to the amount due immediately.

To the left of this summary, you’ll find a date on which the IRS can begin levying your assets and a list of the assets they can legally levy. Note that even though the list specifies that the IRS can take your home, it is very uncommon for them to do so. It’s more likely that they will levy your wages, bank accounts, or tax refunds. The IRS always starts by seizing the assets that are the easiest to get. 

The notice also includes information on how you can pay, what to do if you cannot pay, and what to do if you disagree with the amount owed or levy. The rest of the notice explains the penalties you may be charged, other consequences of unpaid taxes, and a breakdown of interest charges.

The Path to LT11 – Other IRS Collection Notices

By the time LT11 is delivered to you via certified mail, you should be well aware that the IRS plans to levy your assets. LT11 is the last in a long line of tax collection notices from the IRS, including:

• CP14: This is the very first notice you receive, informing you that you owe money to the IRS. If you pay this bill upfront, you save the most money on interest and penalties.
• CP501: If you do not pay after receiving your initial notice, the IRS sends a reminder that you still owe money and that they may move forward with a lien if you do not pay.
• CP503: This is a step up in urgency, warning you that immediate action is required. The notice reminds you that penalties and interest are continuing to accrue and that you must make arrangements for payment.
• CP504: This is an urgent letter noting that if you do not respond, the IRS will send an official notice of intent to levy and move forward with seizing your assets. At this point, they may also place a blanket lien on your assets.

Once you receive CP501, there’s generally at least five weeks between each notice, since the IRS generally gives you 21 days to respond and pay. This means that you should have several months to take action and avoid receiving LT11. After CP504, the IRS will send LT11 or Letter 1058 by certified mail. IRC Section 6331 gives the IRS the right to levy assets after sending an official notice and waiting at least 30 days—LT11 and Letter 1058 both meet this requirement.

The Importance of a Prompt Response

If you’ve ignored the IRS notices you have received up until this point, you absolutely must respond promptly to LT11. Remember, this is the last notice the IRS sends before they have the legal authority to levy your assets. You only have 30 days from the date on the notice to address your tax debt and avoid a levy. The sooner you reach out to the IRS or a tax attorney, the more time you have to look into different payment options.

How to Respond to LT11

Your next steps depend largely on the accuracy of the notice you received. It’s important to first review the notice and compare it with your tax records to verify that the amount due is correct.

If You Agree With Your Debt and Collection Actions

If you know that the amount listed is accurate and have no reason to contest the IRS’s plan to levy your assets, you’ll have to decide how to pay your tax debt. However, first and foremost, you’ll want to contact the IRS—either directly or with the help of a tax attorney. When you stay silent, they can only assume that you are ignoring their notices and that you have no intention of paying your taxes. 

When you start the process of applying for payment plans or other payment options, they at least know you are attempting to handle your tax debt. Look into the “Payment Options” section below to figure out which options may suit your financial needs.

If You Disagree With Either the Debt or the Collection Actions

If you have looked over the notice and compared it to your tax records, you may find that the amount isn’t quite right. Maybe penalties or interest were incorrectly calculated, or maybe the debt does not account for payments you have made. Or you might agree with the amount you owe but think that there are other payment options that are more suitable than a levy. 

In all cases, it’s important to act quickly to request a Collection Due Process hearing. To avoid losing your right to a hearing, you must submit Form 12153 before the 30-day deadline to request a CDP hearing.

Depending on how your CDP hearing goes, a number of outcomes may occur. First, the current debt amount and levy arrangements may remain in place with no changes made. Second, the IRS may adjust the debt to account for payments or incorrect calculations. Third, the IRS may stop the levy process in order to allow you to pay off the debt via an installment agreement or other means. If you disagree with the results of the CDP hearing, you have the right to appeal. 

What If You Miss the 30-Day Deadline to Request a CDP Hearing

If you miss the 30-day deadline, the IRS will move forward with the levy, but you still have the right to request an equivalent hearing. This is similar to the CDP hearing, in that you can appeal the collection action and talk about alternatives. However, you cannot appeal the results of an equivalent hearing. 

Additionally, by the time you request an equivalent hearing, the IRS may have already started to levy your assets. It’s very hard to get a levy released once it’s in progress, but it’s not impossible. There are also redemption options – for instance, if the IRS seizes real estate, you have the right to buy it back, but you’ll have to cover the auction price plus a hefty interest payment. 

Payment Options

If you want to avoid a levy, the IRS will expect you to agree to another payment arrangement that satisfies your debt. Potential options include:

• Installment agreement: An installment agreement is easily one of the most popular payment options among taxpayers, as it is relatively easy to set up, often requires no financial disclosure, and can help you avoid a levy. Long-term installment agreements allow you to pay your debt off in up to 72 monthly payments (or by the Collection Expiration Date if sooner) – but you may be able to get longer if you provide a financial disclosure. 
• Offer in compromise: In certain situations, the IRS accepts less than the total amount you owe. They do this if a full financial analysis shows that you are unable to pay more than what you are offering. To determine this, they look into your assets, debts, income sources, equity in your assets, and other financial obligations.
• Currently not collectible status: If you can demonstrate that you are completely unable to pay off any of your tax debt—again, via a collection information statement—the IRS will temporarily put a stop to its collection efforts against you.
• Penalty abatement: Although this does not resolve your tax debt in full, it can make it much more manageable if you’ve accrued a substantial amount in penalties. You can request first-time penalty abatement if you have a history of tax compliance and no recent penalties from the IRS, and reasonable cause penalty abatement may be available to those who have a good reason for having fallen behind—this may include natural disasters, death or serious illness of a close family member, or genuine loss of documents needed to do taxes.

There’s also a partial payment installment agreement, which requires smaller payments that are not enough to pay off your debt off in full. You make payments until the collection period expires, and then, you don’t have to pay any balance remaining after that time. Note that if you want to pursue this option, you will need to provide an in-depth financial statement.

What Happens If You Ignore LT11

Those who receive LT11 are in this position because they missed or ignored several other IRS notices—you cannot delay or avoid dealing with this notice. If you do, the IRS will levy your assets after the 30-day window has passed. This may mean that they freeze and then seize the funds in your bank account, garnish your wages, or take physical possession of your assets. 

Note that IRS wage garnishment does not follow the same limitations as other garnishments—while creditors have strict limits regarding how much they can take, the IRS has a lot more freedom. They must leave you a limited amount based on your filing status and number of dependents, but that amount is extremely low. Anything above that, they are legally free to seize. 

The IRS may also file a Notice of Federal Tax Lien, which gives them a claim over your assets. This lien is viewable by creditors, which can limit your credit opportunities. You will also have a much harder time refinancing or selling your assets.

All of these actions can have a devastating effect on your financial stability, which is why it’s so important to address your tax issues promptly.

Frequently Asked Questions

What makes LT11 different from other IRS notices?

This notice satisfies the IRS’s legal requirement to send a final notice via certified mail. After they send this notice and wait 30 days, they can legally levy your assets. Prior notices lead up to this one but do not legally permit the IRS to levy your assets.

How does the Collection Due Process hearing help me?

The Collection Due Process hearing allows you to say your piece with the IRS Independent Office of Appeals. You get the chance to dispute the amount you owe or the collection actions proposed by the IRS, and you also get the opportunity to negotiate other potential solutions.

What assets can the IRS levy if I don’t respond to the LT11 notice?

The IRS may levy your bank account, wages, vehicles, personal property, investment accounts, most retirement accounts, certain types of Social Security benefits, real estate, and potentially even business assets depending on how they are owned.

Can I negotiate the amount owed after receiving an LT11 notice?

If you can demonstrate financial need in a collection information statement, you may be able to negotiate the amount owed with an offer in compromise.

How can a tax professional assist in responding to an LT11 notice?

A tax attorney can help you negotiate payment solutions that fit your budget, avoid levies and liens, and get back on track so you stop living under the stress of IRS debt.

After you’ve successfully avoided a tax levy, you’ll likely want to take steps to ensure you never have to face this stress again. First, identify the issues that made you fall behind in the first place. Common issues include not having enough taxes withheld, not making large enough quarterly payments, or failing to file on time. 

From there, you can come up with solutions for your specific problems. You may want to adjust your federal withholdings, increase the amount of your quarterly payments, or hire a professional to help ensure that your taxes are filed accurately and on time. By keeping thorough records and working with a tax professional, you can avoid the stress that typically comes with tax season.

At Damiens Law, we help taxpayers navigate levies, liens, audits, and other complicated tax situations. If you’ve received LT11 from the IRS, let us help. Call us at 601-873-6510 or reach out online to set up a time to meet with one of our tax professionals.