How to Deal with Intent to Levy Notice ?

notice of intent to levy noticeThe Final Notice of Intent to Levy is a warning notice in advance to you by which IRS makes its intention clear that they are considering sending a levy to your employer or bank or even taking your personal property or real estate. The notice also tells you that IRS may begin searching for other assets on which to issue a levy. Further, the notice also explains the denial or revocation of a United States Passport.

Which IRC deals with the final notice of intent to levy?

Section 6331 of Internal Revenue Code relates to levy and restraint powers of IRS for the collection of tax dues. Sub-section (d) of section 6331  provides the requirement of notice to the taxpayer before final levy. Basically, the notice is a way to protect the taxpayer from the sudden harsh action  by authorities

How do I know it is Final Notice of Intent to Levy?

Yes, it may indeed be confusing because, before final notice of intent to levy, you might have received many letters from IRS regarding the outstanding tax demands, and they all tend to look like. Here is how you can ascertain that the notice you received is the Final Notice of Intent to Levy.

Look in the upper right-hand corner of your letter. Are there IRS identifiers LT11 or LT 1058?

if yes, it is a Final Notice of Intent to Levy. If not, it is not the Final Notice.

What to do if the letter is either an LT11 or LT 1058?

Section 6331(h) (2) provides that before IRS levy your salary or property, it will have to serve you notice and give you 30 days time after the date of your LT11 or LT 1058 notice to file an appeal.

If you file an appeal, the law prohibits IRS from taking steps to levy or taking collection enforcement against you till the appeal is pending. So filing an appeal immediately ( within 30 days after receiving Final Notice of Intent to Levy ) is extremely important will save your salary and other property and give you time to find out other ways to solve the problem.

What happens after an appeal is filed?

The IRS, typically, takes about three to five months to process your appeal. They will refer your appeal to a settlement officer who is trained to settle unpaid tax cases.Please note that settlement officers have role fixed for settling tax dispute so they are not empowered to levy. A resolution with the settlement officer is binding upon  IRS. So, you should strive hard for a settlement.

What are the settlement solutions? 

The IRS settlement officer can consider a variety of solution including

  • an offer in compromise,
  • a monthly payment plan,
  • currently uncollectible and
  • penalty abatement.

Who should I contact if I don’t agree with the notice?

Best is to seek the help of a tax attorney. IRS in its notice itself extends and offers help through the phone . If you have any questions about the notice, call them at the number printed at the top of the notice. A customer service representative may assist you.