IRS LT11 and Letter 1058

Key Takeaways:

• Both LT11 and Letter 1058 are the final notice of intent to levy, indicating that the IRS will seize your assets if you do not take action.
• You have a 30-day response window after receiving either one of these notices. After the 30-day window closes, the IRS may initiate a levy.
• You can request a Collection Due Process hearing to dispute the debt or request other collection options.

• Ignoring these notices can have serious consequences for your financial future.

What Are LT11 and Letter 1058?

When the IRS has attempted to reach you multiple times about your tax debt, they eventually reach a point where they believe you will not voluntarily pay or set up payment arrangements. At that point, they issue a final warning before they move forward with a levy, also known as a seizure, of your assets. LT11 and Letter 1058 both serve as the final notice of the IRS’s intent to levy in this long process.

LT11 and Letter 1058 both meet the requirements put forth in the Internal Revenue Code, section 6331. The law states that they may levy assets when they send a notice that is sent by certified mail and sent at least 30 days prior to a levy. In addition to certified mail, the IRS may also give notice in person or left at a person’s home or business. However, certified mail is what they normally use. Once they have satisfied these requirements, they are legally free to levy your assets.

Differences From Other Collection Notices

If you’ve already received similar collection notices from the IRS, you may wonder what makes LT11 and Letter 1058 different from the others. Before receiving LT11 or Letter 1058, the IRS likely sent you CP503 and CP504. These are essentially courtesy notices. The law does not require them to send these notices, but they are part of the IRS’s collection protocols. 

By sending multiple notices before getting to LT11/Letter 1058, the IRS hopes to give taxpayers plenty of time to pay their taxes voluntarily and without the need for liens, levies, and garnishments. When you receive CP503 and CP504, you still have some time before your assets are levied, although we still recommend communicating with the IRS as soon as possible. Once you receive LT11 or Letter 1058, you are on a much tighter timeline.

What Does It Mean When You Receive LT11 or Letter 1058?

LT11 and Letter 1058 outline the specific consequences that come with failing to pay past-due taxes. The IRS may move forward with a Notice of Federal Tax Lien. This is a public notice stating that the government has a right to your assets. This can make it difficult to borrow against your assets, sell them, refinance them, or otherwise benefit from them. A federal tax lien is all-encompassing, automatically covering all of a taxpayer’s assets.

While a lien can cause significant issues for you, it isn’t as immediately pressing as a levy—and the IRS may levy your assets after sending LT11/Letter 1058. A levy is an asset seizure. Depending on the amount of tax debt you have, the assets you own, and how much equity you have in those assets, the IRS may seize different assets to collect what they are owed.

Assets That May Be Levied

Assets that may be at risk include:

• Wages
• Bank accounts
• Investment or retirement accounts
• Social Security benefits
• State tax refunds
• Real estate
• Personal property
• Business property in some cases

Note that the IRS is more likely to seize wages and bank accounts than real estate. People often jump to the worst possible outcome—losing their home—upon receiving LT11/Letter 1058. However, this is a last resort for the IRS. While they have the legal authority to seize a taxpayer’s home, this is an exceedingly unlikely outcome.

How Letter 1058 and LT11 Are Related

You’ll notice that we refer to Letter 1058 and LT11 at the same time throughout this page. While they are technically different letters with different formats, they ultimately serve the same purpose. Both of them meet the legal requirements under IRC 6331 to levy your assets.

If you look at LT11, it’s structured fairly similarly to CP503, CP504, and other IRS notices. It includes a billing summary that breaks down how much you owe, lists the assets at risk of being levied, and a list of things you can do to respond to the notice. The IRS often sends LT11 for individual tax cases that have simply reached the end of the collection process.

Letter 1058 follows a different structure than Letter 1058 and other collection notices. It’s structured in longer paragraphs, versus bulleted lists and charts. As you read through Letter 1058, you’ll see that it explains why you are receiving the letter, what you have to do to avoid a levy, and what their next steps are if you fail to respond. The IRS often sends Letter 1058 for business tax issues and more complex tax situations.

Ultimately, it’s important to remember that both letters are very serious. You are at imminent risk of losing a large portion of your income, your bank accounts, and other assets if you do not take immediate action. Once the IRS sends this letter and waits 30 days, they have satisfied their legal requirement. They can move forward with a levy whenever they choose. Do not let the 30-day window run out while you decide what to do.

Taxpayer Rights and Options

The IRS provides information on your options when you have past-due taxes. Once you’ve received a final notice—and both of these letters qualify—you can request a Collection Due Process (CDP) hearing. You can fill out Form 12153 to request this. During a CDP hearing, you can dispute both the amount you owe and the collection action listed in your final notice. You must request a hearing within 30 days. If you miss this window, you can still request an equivalent hearing, but the IRS can still take action against you in the meantime.

If you agree that you owe the amount due and don’t want to request a CDP hearing, you can talk to a tax attorney about other collection options. Remember, the IRS prefers that taxpayers voluntarily pay their debt—it saves everyone involved time and money. By comparing payment options, you can figure out what fits your situation.

Collection Alternatives

There are numerous payment options that may be accessible to you if you’re at risk of having your assets levied. They include:

• Installment agreements: This is often the most convenient option for taxpayers. If you owe less than $50,000 total, you can apply online for a long-term payment plan. You get a decision as soon as you apply. If you owe more or need more than six years to pay, you can apply through the mail or over the phone.
• Offer in compromise: If you are unable to pay your tax debt in full, you may qualify for an offer in compromise settlement. Note that very few taxpayers qualify for this program, so you may want to discuss it with a tax attorney before applying—it requires a substantial amount of paperwork, and you may be able to save yourself time and effort by talking to a lawyer first.
• Currently not collectible status: The IRS may temporarily pause collection efforts if your income and assets prove that you are unable to make any payments toward your tax debt. Note that the IRS will check your financial status periodically, and if they believe you are able to pay, you will no longer be considered not collectible.
• Penalty abatement: While this does not relieve you of your need to pay, penalty abatement can significantly decrease the amount you owe. Penalties accrue each month until your taxes are paid in full, so if your tax bill is high or you have been ignoring notices for a long time, you may owe a lot in penalties. First-time penalty abatement or reasonable cause penalty abatement may decrease your overall bill and make it more manageable.

Ideally, you’ll look into these payment options before you’re on your final notice—but even if you’ve already received LT11 or Letter 1058, you can talk to a tax attorney and quickly work through your options.

Steps to Take Immediately After Receiving LT11/Letter 1058

Remember that LT11 and Letter 1058 are urgent notices—you must take immediate action to protect your property rights. Follow these steps:

• Open and read the notice immediately: When you know you owe taxes, it’s tempting to let the IRS mail pile up and wait until you’re ready to open it. This is never recommended, but it’s especially risky when you receive a letter via certified mail. Open this letter right away and read it in its entirety so you know exactly what is at risk.
• Verify the details in the letter: Check the information in the letter for accuracy. Look into the amount owed and compare it to your previous bills to ensure that it’s correct.
• Contact the IRS or talk to an attorney: The letter should include a number you can call to talk to an IRS representative. Either call the IRS or reach out to the tax professionals at McLaud Law P.C. to talk about your payment options.
• If desired, submit Form 12153: If you want to request a Collection Due Process hearing, immediately start working on Form 12153 to send to the IRS. You must send it before the 30-day window closes.

Potential Consequences of Ignoring LT11/Letter 1058

You face a long list of unpleasant consequences if you fail to take action after receiving LT11 or Letter 1058. While a Notice of Federal Tax Lien does not physically take your assets from you, it does give the government a stake in everything you own. This lien allows creditors to find out that the government has a vested interest in your assets—and that can make it difficult for you to request new lines of credit.

You also risk the loss of assets to levies. If the IRS freezes your bank account, it can seize everything in it to put toward your tax debt, leaving you without the money you need to fulfill your financial obligations.

Wage garnishment is a common outcome for those who ignore their final notice. This isn’t like when other creditors garnish your wages. While other creditors are limited to a small percentage of your income, the IRS only has to leave a minimal amount based on your filing status and family size. They can garnish far more than other creditors.

The FAST Act also allows the IRS to ask the State Department to revoke your passport or deny your passport application. They do this for seriously delinquent tax debts.

Resources and Support

The IRS and the Taxpayer Advocate Service provide various resources to taxpayers who may be overwhelmed by their obligations and options. Look into these publications for more options:

• Publication 594, Overview of the IRS Collection Process
• Publication 1660, Collection Appeal Rights
• Form 12153, Request for a Collection Due Process or Equivalent Hearing
• Levy relief information from the Taxpayer Advocate Service

You have resources and options available to you—make full use of them to protect your financial future, secure your family’s financial well-being, and get back on track with IRS compliance. The sooner you address LT11 or Letter 1058, the quicker you can come up with payment arrangements and avoid aggressive collection actions. 

Don’t face the IRS on your own! The team at McLaud Law P.C. is here to help you find the best path forward based on your unique needs. We will fight on your behalf so you can live your life while we work on getting you the best possible outcome from the IRS. Call us at 585-397-7785 or request a free consultation online.

This communication is Attorney Advertising. It is presented for informational purposes only and does not constitute legal advice. Every legal situation is different, and prior results do not guarantee a similar outcome. This communication does not create an attorney-client relationship between McLaud Law P.C. and the recipient.