You were brave enough to pick-up and open your certified mail, and there it was – an IRS Final Notice of Intent to Levy.
The law is intended to avoid surprises from the IRS and protect you, and the Final Notice of Intent to Levy does just that, giving you notice in advance that they are considering sending a levy to your employer or bank or even taking your personal property or real estate.
Now that you are on notice that the IRS wants to gear up its collection activities, what are your next steps?
You do have rights.
First, it is important to make sure you have received an actual Final Notice of Intent to Levy from the IRS. The IRS sends out many, many different collection letters, and they all tend to look like, but they are not all are equal.
To determine if you have received an actual Final Notice of Intent to Levy, look in the upper right hand corner of your letter. You are looking for IRS identifiers LT11 or LT 1058 – if your notice does not have have either of those, it is likely not a Final Notice of Intent to Levy giving the IRS the rights to take your property.
If your letter is either an LT11 or LT 1058, then you now have important rights to stop the IRS from levying you.
The IRS not only has to give you notice before they levy, but also the right to prevent a levy by the filing of an appeal to negotiate alternatives to seizure.
Tax laws give you 30 days after the date of your LT11 or LT 1058 notice to file an appeal. Filing your appeal is extremely important as it stops the IRS from levying you while it is pending. This enables you to continue to protect your wages and accounts from the IRS while you work out a solution with them.
If more than 30 days have passed since the IRS sent you the final notice, that’s okay, too. The IRS is actually somewhat flexible in giving you the ability to appeal their final notices of intent to levy, extending the tax law requirement of appealing with 30 days and giving you up to a year if you missed the deadline.
After the appeal is filed, procedurally, it will take the IRS about 3-5 months to process it. In most situations, during that entire time, the IRS continues to be barred from taking collection enforcement against you.
The IRS will then forward your appeal to a settlement officer. IRS settlement officers are not collection employees and are trained to settle unpaid tax cases. They cannot levy you. They are there to resolve your case.
If you have been frustrated by dealings with the IRS Automated Collection Service or a local IRS Revenue Officer, your collection due process appeal changes that and put you in front of a different IRS employee – a settlement officer – who likely has a different perspective. After you have reached resolution with the settlement officer (without the threat of levy), the IRS has to abide by it.
The IRS Final Notice of Intent to Levy is probably the most important letter the IRS will send you. After all, without it, the IRS cannot levy your wages, bank accounts and property.
With the final notice, you have rights to stop the levy before it happens, and meet with an IRS settlement officer to negotiate a solution that is better than levy. Solutions that the IRS settlement officer can consider include an offer in compromise, a monthly payment plan, currently uncollectible and even penalty abatement. If you owe back taxes to the IRS, properly responding to the final notice can be an important element of getting the best result.