IRS Letter 1058-A: What It Is, What It Means, and How to Respond

IRS Letter 1058-A is the Final Notice of Intent to Levy and Your Right to a Collection Due Process Hearing that a revenue officer sends to a taxpayer with joint tax debt before he or she intends to start seizing the taxpayer’s income and property in order to satisfy the taxpayer’s debt to the IRS.

The IRS revenue officer will send a Letter 1058-A to both spouses (separately) via certified mail.

In the case of the individuals living separately, addresses will not be revealed to the other.

If there is debt shared by both parties, but one is in a resolution, only the party not in a resolution will receive the Letter 1058-A.

In the case that one party to the joint tax debt is deceased, the revenue officer will send both Letters 1058-A to the living party.

Here is a redacted 1058-A Letter the IRS sent one of our clients.

IRS Letter 1058-A At a Glance

IRS Letter 1058-A Explained, Part by Part

We’ll break down the different parts of Letter 1058-A, with a full explanation.

Please note, the Letter 1058-A often comes with the Form 12153, which is used to request a collection due process (CDP) hearing.

Part 1: Notice of Intent to Levy and Your Right to a Collection Due Process Hearing

The top of the letter gives the name of the letter, informing you of its two purposes:

• To tell you the IRS intends to seize, or levy, your assets and other streams of income to satisfy any outstanding tax debts.
• To notify you of your right to request a collection due process hearing in order to give the IRS an alternate solution to levying.

Part 2: Why the IRS Is Sending You This Letter

Next, the IRS tells you why they’re sending the letter. The IRS still hasn’t received payment to satisfy your back taxes and now intends to take action to levy you.

It sends the letter since they must provide notice, which the letter does. You are informed of two things in the letter.

• Their notice of levy intent. This is required by the Internal Revenue Code Section 6331(d)(2). The code requires that the IRS gives the taxpayer a 30-day heads-up before the IRS takes any levy action. It also gives you the basic rules relating to being levied by the IRS.
• Notice of your right to a hearing. This is required by Internal Revenue Code Section 6330. The code requires that the IRS gives the taxpayer a 30-day heads-up before the IRS takes any levy action, the taxpayer is notified of their right to a collection due process (CDP) hearing.

Part 3: What the IRS Says You Need to Do

Then, the IRS will tell you what “needs” to be done. The IRS will claim you need to pay in full right away.

However, this is misleading. You always have options if you cannot afford to pay in full. Even if you are able, the options are still open to you.

Part 4: How to Request an Appeals Hearing

This is the most important section of the Letter 1058-A.

Here, you’ll receive the IRS’s instructions, albeit brief, on how to appeal their levy action.

You need to complete a Form 12153, a request for collection due process (CDP) or equivalent hearing.

This must be submitted to the IRS no later than 30 days after the date on the Letter 1058-A.

If this is not done in a timely manner, you can still submit the Form to 12153, but you will not receive a CDP hearing. Instead, you’ll get an equivalent hearing.

Part 5: Table of Amount You Owe

The table the IRS provides shows what you owe by period, including penalties, interest, and total.

Part 6: What the IRS Says They’re Going to Do

Then, here’s what the IRS will do if you can’t pay or refuse to do so:

• Notice of Federal Tax Lien (NFTL) will be filed. It’s how the IRS facilitates tax debt collections.
• Levying (seizing) your property or rights to property unless arrangements are made with your revenue officer (RO) or you request a CDP hearing to plead your case.

Here’s what the IRS can legally seize with its levy. Some things are exempt, but it’s better to be informed about what can or cannot be seized.

• Wages
• Social Security benefits
• Real estate
• Automobiles
• Business assets
• Bank accounts
• Accounts receivable
• Other income

Part 7: Advance Notice of the IRS’s Intent to Contact Third Parties

Then, the IRS will express its intent to contact a third party. While most of the resolution will be done through the IRS, itself, there’s a possibility they’ll contact other people who could be involved.

They’re obligated to tell you of their intent and the time periods during which the contact may take place, which is disclosed within the letter. The IRS only has a year to contact people such as:

• Neighbors
• Banks
• Employers/Employees

The IRS is forbidden from asking the third parties to verify information about you or seizing any of your assets in their possession.

Part 8: Denial or Revocation of United States Passport

If you owe enough in back taxes–currently the minimum is $62,000–the IRS may stop you if your passport needs to renewed or obtained.

The IRS is allowed to do so by filing your tax debt with the United States Department of State. This certifies your debt and tells the State Department to deny any submitted passport applications.

Certain cases may lead to a valid passport being revoked by the State Department.

If you’re outside the United States or have plans to travel outside the country in the future, dealing with your federal tax debt is important.

Part 9: Information About Interest and Penalty Charges

Then, they’ll provide you with information on penalty charges and interest you may accrue.

Interest Under Internal Revenue Code Section 6601

The IRS is required to charge interest on unpaid taxes by the tax code.

Interest starts accumulating on the day taxes are due and compounds daily on both the debt and accrued penalties and interest, not just the underlying tax liability.

Here’s more information on how the IRS calculates interest.

Corporate Interest Under Internal Revenue Code Section 6621(c)

For corporate taxpayers, any debt greater than $100,000 is liable for an extra 2% charge on their balance.

Failure-to-Pay Penalty Under Internal Revenue Code Section 6651

With unpaid taxes, a failure-to-pay penalty is added to your interest fees.

The penalty is usually about 0.5% of your tax liability for every month or part of a month, up to a maximum penalty of 25%.

While this is the standard, deviations may occur.

• For example, it may increase to 1% if there is an outstanding levy notice and more than 10 days have passed within the date of the notice.
• On the flip side, it may decrease to 0.25% if the taxpayer is involved in an approved installment agreement and has filed their tax return in a timely manner.

Part 10: How To Get Help

Then, the IRS will give you the contact information of the Revenue Officer (RO) handling your case. You’ll be able to reach out to them or have someone reach out on your behalf. You can also call the number at the top of their letter.

Part 11: Enclosures

The IRS will have enclosed other documents in your letter. It will all be in the same envelop as the Letter 1058-A.

Typically, this includes:

• A copy of the Letter 1058
• Publication 594
• Publication 1660
• Form 12153

When the IRS Sends Letter 1058-A

If your head is spinning with the influx of information, note this.

When the IRS typically sends a Letter 1058-A, the following are usually true:

1. You’ve been assigned a revenue officer.
2. The taxpayer owes money to the IRS by the IRS’s standards. This may not be true, which is why it’s important to dispute and appeal their claims.
3. The IRS has sent other collection notices to the taxpayer. Usually, it’s a CP14 Notice and a CP504 Notice (or equivalents).
4. You are in tax debt and haven’t entered into some kind of IRS resolution for it.

What You Should Do If You Receive a 1058-A Letter

Now that you know what the 1058-A letter is, here’s what to do next.

Step 1: Check the Letter 1058-A for accuracy

Just because it came from the IRS doesn’t mean it’s automatically completely accurate. Compare your own numbers against theirs.

Step 2: Correct any errors with the IRS

If you find an error, contact your revenue officer.

You can always reach out to us at 866-8000-TAX to go to bat against the IRS for you.

Step 3: Seek Penalty Abatement

Abatement isn’t a guarantee, but it’s a good step to take.

Sometimes it’s granted, sometimes it’s not, but it’s generally worth trying.

At Choice Tax Relief, we always seek some sort of penalty abatement for our clients.

For more information about seeking abatement, click here.

Step 4: Consider requesting a CDP hearing

A CDP hearing might be your best bet when it comes to protesting the IRS’s levy actions.

When considering this, you should have a workable collection alternative in mind to propose as an alternative to the IRS’s levy actions.

For example, gather funds to pay off the balance due or seek a tax relief alternative.

We’ll touch on those two options more below.

Step 5: Pay the Balance Due OR Seek Tax Relief

Lastly, you have to figure out what to do with your outstanding balance after all disagreements and concerns are cleared up with the IRS an obtained any possible penalty relief.

The most obvious action is to pay the balance off in full. It’ll halt all penalties and interest from accruing, as well as get you out of tax debt.

However, for those who qualify, a better option is an offer in compromise. It’s an agreement you make with the IRS where the IRS agrees for you to pay a lower amount than the owed tax debt.

Unfortunately, not all taxpayers qualify for a compromise. Other options include installment payments or temporary hardships placements called currently not collectible status help aid taxpayers as they work to pay off their balances.

How Is This Different Than a 1058 Letter?

IRS Letter 1058-A is similar to IRS Letter 1058 in that they are both the final notice an IRS revenue officer will send a taxpayer before they intend to levy them.

The main difference is in the type of debt — joint or single — the taxpayer owes.

If the taxpayer owes joint tax debt, they will receive a Letter 1058-A; if they owe single tax debt, they (along with whomever they share the joint tax debt with) will receive Letter 1058 (without the “-A”).

Author:

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Logan Allec, CPA, Founder and Owner

Logan Allec has been serving taxpayers as a CPA for over 14 years. After leaving his role at a "Big 4" firm, he started Choice Tax Relief to help everyday Americans who have found themselves behind on their taxes. He also educates thousands of people daily about tax relief on his YouTube channel. In addition to his CPA license, Logan also has a Master's Degree in Taxation from the University of Southern California (USC). He lives with his wife and children in the Los Angeles area. Learn more about Logan here.

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