Unpaid back taxes are no joke and it’s not something you want to ignore. If you don’t respond to the IRS by paying your tax bill or calling to negotiate a payment plan when you receive your first tax bills for unpaid taxes, the IRS will mail form LT11 – Final Notice of Intent to Levy.
Before you receive an LT11, you will receive a:
An LT11 – Final Notice of Intent to Levy outlines the IRS’ intentions to issue a levy against your wages, bank accounts, social security income, 1099 income, and any other assets to cover the taxes you may owe.
Previously, the IRS sent letter 1058 letting taxpayers know about an intent to levy their property and their right to file an Appeals hearing.
LT11 is a shorter notice that looks a lot like the previous IRS collections notices you received if you have unpaid back taxes. Because of this, it may be tempting to ignore form LT11 as “just another tax bill.”
But the LT11 notice signals that time is running out. You can’t ignore your back taxes any longer without serious consequences.
If you don’t pay the balance or reach out to explore your options with the IRS within 30 days, the IRS can seize your money, including funds in your bank account, W-2 or 1099 income, social security income, and even personal property and motor vehicles to cover the back taxes you owe.
The agency can also file a Notice of Federal Tax Lien on any real estate you own or might purchase in the future.
It can be difficult – or impossible – to sell a property with a Federal Tax Lien on it.
If the tax bill is for more than $50,000, including fees and penalties, the IRS can also revoke your passport or notify the State Department to deny your passport application.
Fortunately, even after you receive an LT11 notice, you still have 30 days to fix the situation.
If you haven’t reviewed your tax returns carefully before receiving this notice, now’s the time. Was all your income reported properly? Did you forget any deductions you may be entitled to? Is the amount on the bill correct?
Based on your findings, here are the next steps to take to handle an LT11 notice:
If your tax return is accurate, and you can gain access to the funds needed, pay the bill at www.irs.gov/payments.
If you recently paid the bill, contact the IRS at the number listed on the letter with proof of payment information, such as a check number of the date of the debit or credit transaction and a confirmation number. If you made the payment, this is an easy problem to solve. You’ll want to confirm the IRS received payment to avoid further troubles.
Receiving an LT11 form also gives you the option to request a Collection Due Process or Equivalent Hearing. If you believe the IRS did not follow due process in its collections action, you didn’t receive prior tax notices, you believe the levy is an error, or you can’t pay the tax bill, a CDP Hearing may be your best course of action.
First, a CDP Hearing forestalls the levy while the IRS reviews your application. During a hearing, you can dispute the bill, apply for an offer-in-compromise or a payment plan, or file for innocent spouse relief, as appropriate.
You will want a tax professional, such as a tax attorney, CPA or IRS enrolled agent to represent you during the hearing.
If you can pay a portion of the bill, but not the whole thing, a tax professional agent can help you negotiate an offer-in-compromise. You can also negotiate to have penalties and fees waived.
If you can make a lump sum payment, the offer in compromise may allow you to have a portion of the back taxes forgiven. Otherwise, you can arrange a payment plan (installment agreement) to pay the balance owed over several months or up to six years.
To request a hearing, file Form 12153 by the due date listed on your LT11 form.
It can be tempting to ignore IRS tax bills in the hopes they will just go away. By the time you receive Form LT11, you may need help from a tax professional to face your financial issues head-on.
There are always solutions to tax issues. The IRS doesn’t want to put people in jail or even hold hearings. The agency would prefer to receive the money you owe.
A tax professional can help you negotiate a viable arrangement to pay your unpaid back taxes over time. An LT11 – Final Notice of Intent to Levy is a serious tax notice, but you’ve come to the right place. Solvable can help you find a tax professional who can help you file for the back tax assistance you need.