A Notice of Intent to Levy means that the IRS plans to seize your assets. The IRS sends these notices to people who have unpaid taxes, but generally, the agency does not take any assets until it sends you a Final Notice of Intent to Levy and Your Rights to a Hearing.

If you have received a levy notice from the IRS, you should make plans to pay your taxes, appeal, or get your account marked as uncollectible. However, you don’t need to panic right away. In most cases, you will get several notices before the IRS moves forward with the asset levy. That said, if you have received the Notice of Intent to Levy and Notice of Your Right to a Hearing, you only have 30 days to take action before the IRS levies your assets. 

Keep reading to learn more about the different IRS levy notices, what to expect, and how to resolve your tax debt. To get help now, contact us at Damiens Law today.

How Many Notices Does the IRS Send Before Levying Assets?

The exact number of notices that the IRS sends before levying your assets varies, but in most cases, you can expect to receive at least four to five notices before the IRS levies your assets. Generally, the IRS starts with a balance due notice and a demand for payment. Then, the agency follows that with one or two reminders before sending a levy notice. At that point, the agency will send a warning about an asset levy, and then, if you still don’t resolve the situation, the IRS will send you an intent to levy that outlines your rights to a hearing. 

The IRS sometimes takes years to start collecting tax debts, and generally, it doesn’t send notices until the tax is at least several months late. But once the notices start coming, you can expect to see them arrive every six weeks or so. 

You may receive many different collection notices, but for many taxpayers, the initial balance due letter is the CP501 notice, but it may be a CP14. Then, the IRS sends the CP503 or a similar notice to remind you of your tax debt. After these notices, the IRS may send another demand for payment, or the intent to levy notices may start.

What to Expect With Intent to Levy Notices

Under US Code 6330, the IRS only has the right to levy your assets if you have unpaid taxes, the agency sends you a notice, and the agency gives you 30 days to request a hearing.

All levy notices contain threatening language, and they can be scary and confusing for taxpayers. However, the initial levy notices will typically not lead to you losing your assets. 

One of the first intent-to-levy notices that the IRS sends out is the CP504. This is an intent to levy notice, and it explains that the IRS can seize your assets. If you’re like most people, you will get very nervous when you see this wording, but if you continue to look at the small print, you’ll see that the IRS only plans to seize your state tax refund after sending this notice. The agency will send other notices before taking other assets or garnishing your wages.

If you don’t take action, then the IRS will send a Notice of Intent to Levy with Notice of Your Right to a Hearing. This may be a CP90, LT1058, CP297, or a similar notice. The main difference between these notices and the one above is that they mention your right to a hearing, and they have a deadline of 30 days.

When you receive one of these notices, you have 30 days to make arrangements for your tax debt, or the IRS will move forward with seizing your assets. After sending these notices, the IRS can garnish your wages, seize your bank account, or take your other assets, including your home. Note that taking your home is very rare, and the IRS only does that in situations where there is no other reasonable way to collect the tax due. 

How to Respond to a Notice of Intent to Levy

Note the deadline on the notice and make sure you take action before that date. Although the IRS must give you 30 days to resolve the tax debt or appeal, you will actually have a bit less time. The deadline is 30 days before the notice date which is the day that the IRS sends the notice. So, by the time you get the notice, some of the days have passed. 

During the 30 day period, you have the following options:

• Set up an installment agreement – if you owe less than $50,000, you can set up a payment plan online. If you owe more, you will need to submit an application or call the IRS. You may also need to provide financial details.
• Request an offer in compromise – An offer lets you settle your tax for less than you owe, and when you submit the application, the IRS will stop all pending levies on your account. However, you should only apply if there is a chance that you might be eligible. You shouldn’t use the OIC application as a delay tactic. 
• Look into currently not collectible status – If you cannot pay anything, contact the IRS and see if they’ll put your account on temporarily uncollectible status. Then, the levy won’t move forward, and you won’t have to pay anything unless your finances improve.
• Request a collection due process hearing – Follow the instructions on the letter to request a Collection Due Process Hearing, but make sure you do it by the deadline.

If you’ve recently received an intent to levy notice, you may want to reach out to a tax attorney to see which option is the best for your situation. Also, consider reducing your tax debt by requesting penalty abatement. If you’re in a situation where you think the tax debt should only be your spouse’s or ex-spouse’s responsibility, look into innocent spouse relief, or talk with a lawyer about tax debt and divorce. 

How to Appeal a Notice of Intent to Levy

If your notice says that you have a right to appeal, you can request a Collection Due Process hearing by filing Form 12153. This form may be included with your notice, or you can download it from the IRS’s website. On the form, note why you are appealing the levy. This doesn’t need to be long. Explain how an asset levy would hurt your financial situation, then offer an alternative, such as a payment plan.

If you don’t file the form by the notice’s deadline, you can still request a hearing, but in this case, you will get an “Equivalent Hearing” rather than the CDP hearing. The process is similar. However, if you don’t like the results of the CDP hearing, you can appeal to the Tax Court, and you don’t get appeal rights with an equivalent hearing. Additionally, by missing the deadline, you risk having your assets levied. 

What Assets Can the IRS Levy?

The IRS can levy your wages, bank accounts, investment accounts including your 401(k), personal property, real estate, and business property. There are only a few assets that the IRS cannot levy, and they include unemployment, worker’s compensation, certain public assistance payments, school books, tools needed for work, and a small handful of other assets. 

If you’re worried about the IRS taking your assets, talk with a tax attorney. Also, remember there are some grey areas in the law, and sometimes, having an attorney on your side can help you avoid an asset levy. For example, your lawyer may be able to argue that keeping the asset will help you pay off your tax debt or that you need it to work. These arguments can sometimes be hard to mount on your own. 

What If You Don’t Agree With the Levy Notice?

Depending on why you disagree with the notice, you may want to take the following actions:

• Contact the IRS to let them know that the tax debt is not yours – For example, if you were the victim of identity theft or if the tax due came from an audit that you didn’t participate in because you didn’t get the notices.
• Look into an offer in compromise based on doubt as to liability – This program lets you reduce your tax liability if you prove that you don’t really owe the tax liability.
• Consider innocent spouse relief – This program lets you separate your tax liability from your spouse if they underreported income without your knowledge and you had no reason to know about the issue.
• Ask for an administrative penalty waiver – If penalties were applied in error, you may be able to get an administrative waiver.

You may have other options to deal with an incorrect notice. Talk with a tax attorney about your unique situation. 

Contact Damiens Law About Intent to Levy Notices

At Damiens Law, we specialize in dealing with IRS and state tax problems. If you’re dealing with IRS notices or any other issues, we can help. To learn more, contact us today.