IRS LT11 Notice - How to Respond and Protect Your Property from Seizure

One of the most serious notices a taxpayer can receive is the LT11, also known as the "Final Notice of Intent to Levy and Notice of Your Right to a Hearing." This letter is a final warning that the IRS intends to seize your property or rights to property to satisfy an unpaid tax. Understanding what this notice means, the legal authority behind it, and your rights and options is crucial to navigating this challenging situation. 

The Power to Levy: Understanding the Law 

The IRS' authority to levy, or seize, property to collect delinquent taxes is granted by the Internal Revenue Code (IRC). Specifically, IRC Section 6331, "Levy and Distraint," empowers the Secretary of the Treasury to collect unpaid taxes by levying upon a taxpayer's property and rights to property. This authority arises if a taxpayer neglects or refuses to pay their tax liability within 10 days after the IRS issues a notice and demand for payment. The term "levy" is broad and includes the power of distraint and seizure by any means. This means the IRS can take possession of your assets, both tangible and intangible, to satisfy your tax liability. The scope of what the IRS can levy is extensive, encompassing wages, bank accounts, business assets, personal property like your car and home, and even certain federal payments like Social Security benefits. 

Before the IRS can take such drastic measures, however, it must follow specific procedures outlined in the law. IRC Section 6331(d) mandates that the IRS must provide you with a written notice of its intent to levy at least 30 days before the levy is made. This notice, which is what the LT11 serves as, must be given in person, left at your home or business, or sent by certified or registered mail to your last known address. This 30-day window is a critical period for you to take action to resolve your tax liability and prevent the seizure of your assets. 

Your Right to a Hearing: The Collection Due Process 

Perhaps the most important right you have upon receiving an LT11 is the right to a Collection Due Process (CDP) hearing. This right is guaranteed by IRC Section 6330, "Notice and Opportunity for Hearing Before Levy." The LT11 notice itself will inform you of your right to request a CDP hearing within 30 days. This hearing is a formal proceeding with the IRS Independent Office of Appeals, an impartial body within the IRS that is separate from the collection function. The hearing is conducted by an appeals officer who has had no prior involvement with your case. 

During the CDP hearing, you can raise any relevant issue related to the unpaid tax or the proposed levy. This includes challenging the appropriateness of the collection action, proposing collection alternatives such as an installment agreement or an offer in compromise, and even challenging the existence or amount of the underlying tax liability if you have not had a prior opportunity to do so. The appeals officer is required to obtain verification from the IRS that all legal and administrative procedures have been followed. The officer must then make a determination that balances the need for efficient tax collection with your legitimate concern that the collection action be no more intrusive than necessary. 

Requesting a CDP hearing has a significant and immediate benefit: it suspends all levy actions while the hearing and any subsequent appeals are pending. This provides you with a crucial window of time to work with the IRS to find a resolution without the imminent threat of asset seizure. If you disagree with the determination of the Appeals Office, you have the right to petition the US Tax Court for a judicial review of the decision. 

What to Do When You Receive an LT11 

Receiving an LT11 is a serious matter that requires your immediate attention. The first step is to carefully read the notice and understand the amount of tax the IRS claims you owe and the deadline for requesting a CDP hearing. Do not ignore this notice. The consequences of inaction can be severe, including wage garnishment, bank account levies, and the seizure of your personal property. You should contact the IRS or a qualified tax professional immediately to discuss your options. 

If you agree with the amount of tax owed but are unable to pay it in full, you may be able to set up an installment agreement under IRC Section 6159. This allows you to make monthly payments over time to satisfy your tax liability. Another option may be an offer in compromise (OIC) under IRC Section 7122, which allows certain taxpayers to resolve their tax liability with the IRS for a lower amount than what they originally owed. The IRS may also determine that you are "currently not collectible" (CNC), which means the IRS will temporarily delay collection actions if you can demonstrate that you are unable to pay your basic living expenses. 

Take Action Now 

Dealing with the IRS can be a complex and intimidating process, especially when faced with a notice as serious as the LT11. It is essential to understand your rights and the options available to you. For more information and future videos on how to handle IRS notices and letters, please like and subscribe to our channel. You can also scan the QR code below or click the button to watch our comprehensive free video on defending yourself against the IRS.

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If you have received an LT11 or are struggling with a tax problem we can help you understand your options, represent you before the IRS, and work to achieve the best possible outcome for your situation. Do not wait until the IRS seizes your assets. Contact us when you are ready to get started. Book a consultation to take the first step toward resolving your tax issues.