IRS
Updated OCTOBER 30, 2024

IRS Notice of Intent to Levy: What It Is and What to Do

The IRS Notice of Intent to Levy is a notification to a taxpayer that the IRS intends to start seizing the taxpayer’s assets and income to apply toward the taxpayer’s balance with the IRS.

Notice of Intent to Levy
Typical “Notice of Intent to Levy” Language From a Notice CP504

Notices That Can Serve As a Notice of Intent to Levy

The table below indicates the common IRS notices that serve — or can serve — as a notice of intent to levy.

Notice NumberWhat It Is
CP504Urgent Final Balance Due Notice
CP523Installment Agreement Default Notice with Intent to Levy

Why Does the IRS Send a Notice of Intent to Levy?

You may be wondering why the IRS — the nation’s most powerful collection agency — would notify you that it intends to start taking your stuff.

Wouldn’t it be more strategic for the IRS to just start levying you out of the blue without any warning beforehand?

While this would obviously result in more collections from taxpayers, Congress has actually barred the IRS from levying taxpayers without notice.

Internal Revenue Code § 6331(d) 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 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
  • The IRS’s rules pertaining to the certification of seriously delinquent tax debt to the State Department under Section 32101 of the FAST Act

So is the IRS just being nice to you by giving you notice before it actually starts levying you? Nope; it’s just following the law!

What Can the IRS Take After Sending a Notice of Intent to Levy?

Now, after sending you a notice of intent to levy, the IRS can levy certain things. For example, under Internal Revenue Code § 6330(f)(3), if the IRS has served a levy on a state — like California or New York or Florida or Texas — through the State Income Tax Levy Program, the IRS can levy your state tax refund to be applied toward your federal tax debt after it has issued you the notice of intent to levy.

However, when it comes to other levies, such as wage garnishments or bank levies, the IRS cannot perform those levies until it has sent you an additional notice, your Final Notice of Intent to Levy and Your Right to a Hearing, which is typically found on a notice such as the LT11.

Notice of Intent to Levy vs. Final Notice of Intent to Levy

Now, this may be confusing, but the notice of intent to levy and the final notice of intent to levy are actually two different things.

Levy Timing

The (non-final) notice of intent to levy is simply a general notice to a taxpayer that while the IRS does intend to start levying the taxpayer’s assets at some point in the future, this levy action is not necessarily coming in the very near future.

On the other hand, once the IRS has sent a taxpayer the final notice of intent to levy, it is very likely that — unless the taxpayer responds to the final notice to deal with their tax debt — the IRS will start taking levy action against the taxpayer within the next month or two.

Levy Powers

Another difference between the (non-final) notice of intent to levy and the final notice of intent to levy is in the extent to which a taxpayer can be levied after receiving each.

As mentioned previously, the IRS can levy a taxpayer’s state income tax refund and a few other things after issuing a notice of intent to levy.

However, the IRS cannot, say, levy a taxpayer’s bank accounts or garnish their wages until after it has sent the taxpayer the final notice of intent to levy and provided the taxpayer with at least 30 days to respond.

What to Do If You Receive an IRS Notice of Intent to Levy

Below are the steps you should take after you receive a notice of intent to levy.

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

Step 1: Check the notice of intent to levy 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 notice of intent to levy 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?.