IRS Notice LT11: What It Is and How to Respond

IRS Notice LT11 is the Final Notice of Intent to Levy and Your Right to a Hearing. And in case you don’t know, a levy is when the IRS takes your stuff and in particular your money — such as your wages or the money in your bank account — to satisfy your federal tax debt.

The IRS sends the Notice LT11 via certified mail.

So the Notice LT11 is the IRS giving you final notice that it intends to take your stuff.  The LT11 is one of the most common notices that the IRS sends out to taxpayers — it is typically sent shortly after the CP504 Notice and, if not dealt with appropriately within 30 days, will typically result in IRS levy action such as a bank levy or wage garnishment.

Here is the redacted version of a Notice LT11 that the IRS sent one of our clients.

The LT11 is the notice described in Internal Revenue Code § 6330(a), which requires the IRS — no less than 30 days before a levy — to send taxpayers a notice of its intent to levy the taxpayer that describes “in simple and nontechnical terms”:

• The amount of the taxpayer’s unpaid tax to the IRS
• The right of the taxpayer to request a Collection Due Process (CDP) Hearing
• The IRS’s rules pertaining to levy and distraint (i.e., seizure of your property)
• The appeals and other remedies, such as payment alternatives, available to you to prevent such levy

This is all to say that if the IRS levies you without sending you the LT11 or an equivalent notice of your right to request a CDP hearing  — as well as the CP14 or an equivalent notice and demand and the CP504 or  an equivalent Notice of Intent to Levy — the levy is improper and you should contest the levy.

Note, of course, that the IRS may be sending you notices at an old address!

Now, if within 30 days after the IRS sends you the Notice LT11, you do not pay off your balance to the IRS, request a CDP Hearing, or enter into a resolution with the IRS or at least start the process of entering into a resolution with the IRS, the IRS can then levy — that is seize — your property including, as it says on the left-hand side of the first page of the LT11:

• Your wages and other income
• Your bank accounts
• Your business assets
• Your personal assets (including your car and home)
• Your state tax refund
• Your Social Security benefits
• And more

IRS Notice LT11 At a Glance

IRS Notice LT11 Explained, Part by Part

Here is a full explanation of the Notice LT11, part by part.

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

The large letters to the right of the exclamation point aptly describe the two purposes this notice serves:

• To inform you that the IRS intends to levy — that is, seize — your assets and income streams in order to satisfy your tax debt.
• To give you notice that you have the right to request a collection due process (CDP) hearing to propose an alternative to the IRS levying you.

This section also informs you of the deadline set by the IRS for you to pay off your tax debt to avoid levy action.

Part 2: Amount Due Immediately

The amount in this box is the total amount of taxes, penalties, and interest that you owe the IRS for the year or years covered by this particular LT11 Notice.

Note that this amount may not be the entirety of your tax debt — for example, if you recently filed a tax return showing a balance due, and you have tax debt from older years, the LT11 Notice may only include the balances from older years.

You’ll have to check the “Billing Summary” section further in the LT11 to know which tax years are included in this particular LT11.

Part 3: What the IRS Wants You to Do Immediately

Next, the IRS tells you (in checkbox format) exactly what it wants you to do immediately, culminating in (of course) making a payment to the IRS.

The items under the “Gather this information” column are the pieces of information you’ll need to make a payment at irs.gov/directlypay, which is what the IRS is instructing you to do in the “Pay directly online from your bank account” column.

Part 4: Consequences If You Do Not Pay Immediately

Next, the IRS tells you what will happen if you do not pay your tax in full by the deadline mentioned previously.

Although there are obviously other consequences of not paying your taxes than those listed here, here are the three listed in this section:

1. Levy

You obviously know this from the heading at the top of the notice, but just in case you forgot, the IRS is informing you here that it “will seize (levy) your property or rights to property if you fail to comply.”

Basically, the IRS is telling you that it can start taking your stuff — and, specifically, your money — if you don’t deal with your tax debt.

2. Filing of a Notice of Federal Tax Lien

Once a tax debt is assessed, the IRS automatically has the legal right to your income and assets to satisfy your tax liability.

This is sometimes referred to as the IRS’s “secret lien.” It’s “secret” because only you and the IRS know about it — unless you tell somebody else about it.

However, the IRS has the power to let everybody else know about your tax debt.

It accomplishes this by filing a notice of federal tax lien (NFTL) in your country and/or state records.

Once that is done, your tax debt officially becomes public record.

Obviously, most people don’t go thumbing through public lien records — so it’s unlikely to affect your public reputation the way a bad social media post would — but interested parties may include, for example, organizations looking to lend you money.

Speaking of bad social media posts…have you seen the IRS Commissioner’s cat? Check out my YouTube video below to see what I mean.

3. Passport Revocation or Denial

If you owe enough in back taxes — the threshold is currently $62,000 — the IRS may prevent you from obtaining or renewing your passport.

It does this by “certifying” your tax debt to the United States Department of State — basically, telling the State Department that you owe a lot in taxes and therefore it should deny any passport applications you submit.

In certain cases, the State Department may even revoke your existing passport.

So if you are outside the United States — or are planning to travel outside the United States in the near future — it’s essential that you deal with your federal tax debt!

Part 5: Other Payment Options

In the next section, the IRS gives you information about ways you can pay the IRS other than paying online directly from your bank account (which it told you how to do in a previous section of your LT11 Notice).

Here are the other payment options the IRS provides:

• Paying online by card at irs.gov/payments
• Paying by check or money order payable to “United States Treasury”
• Paying your balance over time — such as via an installment agreement — at irs.gov/opa

Part 6: More Information

Next, the IRS provides you with both a webpage and a phone number if you’d like more information about your LT11 Notice directly from the IRS.

Part 7: How to Request an Appeals Hearing

This is arguably the most important section of your LT11 Notice.

In this section, the IRS gives you (brief) instructions about how to appeal the IRS’s levy action.

To do this, you must complete the Form 12153, Request for a Collection Due Process or Equivalent Hearing.

You must submit this form to the IRS no later than 30 days after the notice date of your LT11.

If you fail to do so, you may still submit the Form 12153 — but you will not get a Collection Due Process (CDP) hearing; you will get an Equivalent Hearing.

Part 8: Your Billing Summary

Next, the IRS provides you with a year-by-year summary of what they believe you owe.

Our client only owed for one tax year, so that’s why he only has information for the tax period ending “12/31/2013.”

Here is a quick legend on each of the column’s you’ll see for each tax year:

• Tax period ending: This is the last day of the tax period — typically a year but in some cases a quarter — for which you have a balance due.
• Form number: This is the type of tax form you filed (or for which the IRS filed a substitute for return) giving rise to the balance due.
• Amount you owed: This is the amount of underlying tax liability owed on the return when filed.
• Interest: This is the amount of interest the IRS has added to your initial balance.
• Failure-to-pay penalty: This is the amount of failure-to-pay penalty the IRS has added to your initial balance. Note that you may be liable to other or additional penalties than the failure-to-pay penalty, and if so, these penalties would each have their own column here.
• Total: This is the sum of the “amount you owed” as well as your accumulated interest and penalties.

Part 9: Advance Notice of the IRS’s Intent to Contact Third Parties

In this section, the IRS is informing you that it may reach out to third parties — meaning, people other than you or your authorized representative — to obtain information that it believes is necessary in order to verify information about you and your financial situation and/or to take collection action against you.

Part 10: Taxpayer Rights and Sources for Assistance

In this section, the IRS provides you with some information about the Taxpayer Bill of Rights, IRS Publication 1, Low-Income Taxpayer Clinics (LITC), and the Taxpayer Advocate Service.

Part 11: Payment Coupon

At the bottom of the last page of the Notice LT11 is the payment coupon that you would submit with your payment if you intend to pay the amount on the notice in full or in part via paper mail.

When the IRS Sends Notice LT11

The IRS typically sends the Notice LT11 to a taxpayer when:

1. The taxpayer owes money to the IRS — or at least the IRS believes the taxpayer owes money to the IRS.
2. The IRS has sent other collections notices to the taxpayer — typically, at the very least, a CP14 Notice and a CP504 Notice (or their equivalents).
3. The taxpayer has not paid off this tax debt or entered into some kind of resolution with the IRS for it.

What You Should Do If You Receive an LT11 Notice

Below are the steps you should take after you receive an LT11 Notice.

For more information about each of these steps, check out our article How to Fight the IRS and Win.

Step 1: Check the LT11 Notice for accuracy.

Don’t assume that the IRS did their math correctly — review the IRS’s numbers against your own.

Step 2: Correct any errors with the IRS.

If you do find an error in the IRS’s math, take it up with them.

There should be phone numbers in the LT11 Notice itself that you can call to discuss your disagreement with the IRS’s numbers:

• For example, in the “What you need to do immediately” section, there will likely be a phone number that you can call to “discuss your options.”  If you disagree with the tax amount itself, call this number.
• In the “Penalties” section, there should be a number indicated that you can call to obtain a “detailed calculation of your penalty charges.”  If you disagree with the IRS’s penalty calculation, call this number.

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

Step 3: Seek Penalty Abatement.

For most of our clients with penalties on their account, we at least seek some sort of penalty relief for them.

Sometimes the IRS grants it; sometimes they don’t.

But it’s generally at least worth a shot.

For more information about seeking abatement for the penalties on your account, check out this article.

Step 4: Pay the Balance Due OR Seek Tax Relief

Finally, you have to figure out what to do with the amount you owe the IRS after you’ve cleared up any disagreements with them concerning the amount as well as obtained any possible penalty relief for your account.

You can, of course, pay off your balance in full.  This will (obviously) stop future penalties and interest from accruing.

However, a better option — if you qualify for it — is an offer in compromise.  An offer in compromise is an agreement you make with the IRS in which the IRS agrees to accept a lower amount to satisfy your tax debt than you actually owe.

That said, not all taxpayers qualify for an offer in compromise, so there are other options, such as a temporary hardship placement called currently not collectible status as well as installment agreements for taxpayers who wish to pay their balance over time.

For an overview of how tax relief works, read our article What Is Tax Relief and How Does It Work?.

What If I Already Paid the Amount on My LT11 Notice

If you’ve already paid the amount indicated on your LT11 Notice, you can disregard the notice.

In fact, the IRS says in the “What you need to do immediately” section:

“If you’ve already paid your balance in full within the past 14 days or made payment arrangements, please disregard this notice.”

In this case, it’s possible that the IRS had already generated the LT11 Notice before it had processed your payment.  This is not a big deal — it will simply take the IRS a few days (or even a couple weeks) to catch up.

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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