5 Critical Steps to Take Immediately After Receiving an IRS Notice of Intent to Levy

Getting an IRS Notice of Intent to Levy is stressful. It’s the IRS’s final warning before they can legally take money from your bank account or garnish your wages. Knowing what to do after an IRS levy notice is crucial, and the good news is that you have options. It is possible to stop an IRS levy after notice, but you must act fast.

This step-by-step guide is designed to resolve the issue in five steps. Read along to understand how to interpret the notice and defend your rights, and cooperate with the IRS to find a solution.

Step 1 – Read the Notice and Find Your 30-Day Deadline

When you get a final notice of intent to levy, don’t put it aside. This document is your roadmap out of this situation. The two most common levy notices are IRS Letter 1058 and LT11. Both mean the same thing: the IRS will start seizing your assets in 30 days if you don’t act.

Your single most important task is to find the date on the letter and mark your calendar for 30 days from that date. This is your hard deadline to file an appeal and protect your rights. Also, give the notice a quick once-over to ensure the name, tax year, and amount owed seem correct. Mistakes can happen, and it’s good to catch them early.

Received an IRS property seizure notice? Read our guide on IRS Seize Property Notice

Step 2 – Contact the IRS or a Tax Professional Immediately

With a clear understanding of the notice and its critical deadline, your next move is to take action. Procrastination is your worst enemy at this stage. Ignoring the letter will not make the tax debt disappear; it will only guarantee that the IRS proceeds with the levy, leading to much bigger financial headaches. Remember, this final notice of intent to levy is not the first letter the IRS has sent you; it’s the culmination of a series of prior notices that likely went unanswered. This is your last real chance to engage proactively and have a say in the outcome.

Why You Shouldn’t Ignore the Notice

Ignoring a Letter 1058 or LT11 is like giving the IRS a green light to start taking your money and property. The IRS has incredibly broad and powerful authority when it comes to levies. Once the 30-day period expires, the IRS can legally seize assets from multiple sources, including:

• Wages and Salaries: The IRS can send a notice to your employer, legally requiring them to send a large portion of each paycheck directly to the IRS before you ever see it. This is one of the most common forms of levy, often called wage garnishment.
• Bank Accounts: The IRS can instruct your bank to freeze your checking and savings accounts. The bank will hold the funds for 21 days, giving you a final chance to resolve the issue before sending the money directly to the IRS.
• Social Security & Retirement Benefits: Social Security retirement and disability, along with a few other federal payments that you receive, can be subject to the Federal Payment Levy Program.
• Personal Property: The IRS is even allowed in more extreme situations to sell and expropriate your tangible goods, including a car, a boat, or even your home, to pay off the debt.
• State Tax Refunds: If you are due a tax refund from your state, the IRS can intercept it and apply it to your federal tax bill.

A levy can cause severe financial hardship, making it difficult to pay your rent, mortgage, and other essential bills. The most effective way to prevent this chaos is to respond to IRS levy notice promptly and decisively.

Discuss Options with a Tax Relief Expert

While you are certainly allowed to call the IRS and handle the situation on your own, it’s often a daunting and confusing process. IRS phone lines can have long wait times, and the agents you speak with are trained to collect the tax owed. This is where a qualified tax professional, like the experts at Hall’s IRS, can become your most valuable ally. An experienced tax resolution specialist, such as founder Tina Hall, understands the complex web of tax laws and has years of experience negotiating with the IRS on a daily basis.

Engaging a tax professional right away provides several immediate advantages:

• They Can Contact the IRS for You: A tax pro can file a Power of Attorney with the IRS, allowing them to speak directly to the agency on your behalf. They know the right departments to call and the right language to use to protect your rights immediately.
• They provide a Buffer: Having an expert represent you takes the emotional stress off your shoulders and prevents you from saying something to an IRS agent that might hurt your case.
• They Analyze Your Financial Situation: They deeply investigate your economic position. A specialist tax preparer will scrutinize deeply into your revenue, spending, and overall economic state to decide the most rational and profitable option of finding your individual case. The tax resolution timeline starts the moment you decide to act.
• They Get Deadlines Met: They will ensure that all the required paperwork, in particular your appeal request, is submitted properly and within the deadlines, protecting your rights and preventing the levy from its tracked.

Hiring a professional isn’t just about convenience; it’s about increasing your chances of achieving a favorable outcome. They can help you pursue every available option to resolve your debt and stop the IRS levy after notice.

Step 3 – File for a Collection Due Process (CDP) Hearing

Your most powerful tool after receiving a levy notice is the right to appeal through a Collection Due Process (CDP) hearing. Filing a timely request for a CDP hearing legally stops the IRS from seizing your assets while your case is under review. This pause gives you crucial time to negotiate a solution without the immediate threat of a levy.

How to Request a CDP Hearing Using Form 12153

1. Download the Correct Form: Always get the most current version of IRS Form 12153 directly from the IRS website to ensure you are not using an outdated version.
2. Complete the Form Accurately:  Fill in all your personal information, including your name, address, and taxpayer identification number. You also need to list the tax period(s) and the type of tax (e.g., Form 1040 income tax) that are covered by the levy notice.
3. Explain Your Reasons for Appealing: This is the most important part of the form. You must clearly state the reason for your appeal. The form provides checkboxes for common reasons, such as proposing a collection alternative. In the space provided, briefly but clearly explain what resolution you are seeking (e.g., “I would like to propose an installment agreement”) or why you disagree with the levy. This form is a key part of the IRS Letter 1058 response steps.
4. Sign and Date the Form: An unsigned form is invalid and will be rejected. Make sure you sign and date it.
5. Mail It to the Right Place via Certified Mail: Do not send this form to a generic IRS processing center. The correct mailing address is located on your levy notice (Letter 1058 or LT11). To protect yourself, always send this form via USPS Certified Mail with a return receipt. The postmark on your certified mail receipt serves as legal proof that you mailed the form on time.

Remember, this form must be postmarked within 30 days of the date on your levy notice to secure your full CDP rights. If you miss this deadline, you may still request an “Equivalent Hearing,” but this alternative process does not legally stop the levy from proceeding, and you lose your right to appeal the decision in U.S. Tax Court.

Common Reasons the IRS Accepts CDP Requests

The purpose of a CDP hearing is to give you a chance to discuss your situation with an impartial Appeals Officer who is separate from the IRS collections division. This officer is tasked with reviewing your case to determine if the proposed levy is overly intrusive and to consider alternatives. Some of the most common and successful arguments made during CDP hearings include:

• Proposing a Collection Alternative: This is the most frequent reason for a hearing. You can officially request a resolution like an installment agreement or an Offer in Compromise.
• Claiming Economic Hardship:  If you can provide financial proof that the levy would prevent you from paying for basic living necessities like housing, food, and healthcare, the Appeals Officer may release the levy and place your account in Currently Not Collectible status. This is a primary method to achieve the release of an IRS wage garnishment.
• Disputing the Amount of Tax Owed: If you never had a previous opportunity to challenge the actual amount of tax the IRS says you owe (for example, if you never received a notice of deficiency), you may be able to do so during the CDP hearing.
• Requesting Innocent Spouse Relief:  If the tax debt originated from a joint tax return you filed with a current or former spouse, you can argue that you were unaware of the error and should not be held liable for their tax debt.
• Mail It to the Right Place via Certified Mail: Do not send this form to a generic IRS processing center. The correct mailing address is located on your levy notice (Letter 1058 or LT11). To protect yourself, always send this form via USPS Certified Mail with a return receipt. The postmark on your certified mail receipt serves as legal proof that you mailed the form on time.
• Mail It to the Right Place via Certified Mail: Do not send this form to a generic IRS processing center. The correct mailing address is located on your levy notice (Letter 1058 or LT11). To protect yourself, always send this form via USPS Certified Mail with a return receipt. The postmark on your certified mail receipt serves as legal proof that you mailed the form on time.

The ultimate goal of the CDP hearing is to find a fair and reasonable way for you to resolve your tax liability without the IRS having to resort to the harsh measure of a levy.

Read about: How far back the IRS can investigate your taxes 

Step 4 – Explore Resolution Options to Stop the Levy

Filing an appeal gives you the breathing room to propose a solution. The IRS offers several established IRS wage levy stop options for taxpayers who cannot pay their debt in full. The right one for you depends on your financial situation.

• Installment Agreement: This is a formal payment plan allowing you to pay your tax debt over time through manageable monthly payments. It’s a great option if you have a steady income. Once approved, the IRS will halt all levy actions.
• Offer in Compromise (OIC): An OIC is a way by which some severely financially challenged taxpayers can pay their taxes below their total tax liability. IRS has tough eligibility criteria, and, therefore, it is strongly advisable to hire a tax expert to find out whether or not he/she qualify and to draft the complicated application.
• Currently Not Collectible (CNC) Status:  If you can prove to the IRS that you cannot afford basic living expenses, they may temporarily pause collection efforts by placing your account in CNC status. The debt doesn’t go away, and interest continues to grow, but it provides immediate relief from levies during a period of hardship.

Step 5 – Prevent Future IRS Levy Notices

Once you resolve your current tax issue, it’s vital to stay on the right track. Preventing future problems is much easier than fixing them.

• Keep up with tax return requirements:  The best method to avoid being levied is to be fully up to date with doing your taxation returns and also to pay your taxes by the deadline without fail once a year. When you are self-employed, you will be required to pay your estimated taxes on a quarterly basis.
• Monitor IRS Correspondence:  Mail should not be ignored by the IRS. Open all the letters immediately and work on any problem immediately. Even a minor issue will blow out of proportion when not addressed. In case you do not understand a notice that was received, seek the advice of a tax professional as soon as possible.

Conclusion

When figuring out what to do after an IRS levy notice, remember that taking proactive actions is your best move. By reading the notice to find your 30-day deadline and immediately contacting a tax professional, you can protect your assets. The best path forward is to file an appeal, which stops the levy and gives you time to find a solution, like a payment plan. Don’t let fear cause you to do nothing; take action today to secure your financial future.

If you’ve received a levy notice and need expert help, contact Tina Hall and the dedicated team at Hall’s IRS. Call us today at (478) 455 – 4615 for a consultation and take the first step toward peace of mind.

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