Is an IRS Intent to Levy (LT11) Notice Preventable, How to Stop

Is an IRS Intent to Levy (LT11) Notice Preventable, How to Stop

Is an IRS Intent to Levy (LT11) Preventable

While there are many different types of tax notices that the Internal Revenue Service may send to a Taxpayer, the LT11 Notice is one of the most serious. That is because once a Taxpayer receives an LT11 Notice, they have only a limited amount of time to react to try to prevent a levy from being issued. Once a levy is issued, the IRS can either withdraw money for the Taxpayer’s bank account or levy their wages (or other payments) so that the Government receives payments sufficient to satisfy any potential debt the taxpayer has with the IRS. It is important to note that the LT11 is one of the final notices the taxpayer will receive from the IRS — but along the way, Taxpayers will receive several other notices such as a CP503, CP504, and LT38. Let’s take a brief look at what the IRS LT11 Intent to Levy is, how to prevent the levy notice from being issued, and how a Taxpayer may be able to stop enforcement.

What is an LT11 Notice?

An LT11 Notice is a letter Taxpayers receive from the IRS when they have an outstanding debt with the IRS that has gone unpaid for a significant amount of time.

As provided by the IRS:

• • • “We haven’t received your payment for overdue taxes. We intend to seize your property or rights to property. You must contact us immediately.”

What is an IRS Levy?

A levy occurs when the IRS takes formal steps to seize property or funds to secure payment of a tax debt. The levy (and/or Notice of Federal Tax Lien) is usually the last step the IRS takes.

As provided by the IRS:

• • • “A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.

    • The Internal Revenue Code (IRC) authorizes levies to collect delinquent tax. See IRC 6331. Any property or right to property that belongs to the taxpayer or on which there is a Federal tax lien can be levied, unless the IRC exempts the property from levy.”

When is the LT11 Intent to Levy Notice Issued?

The IRS has certain procedures to follow and timing requirements before it can issue an LT11 Notice.

As provided by the IRS:

• • “What actions must the Internal Revenue Service take before a levy can be issued?

    • The IRS will usually levy only after these four requirements are met:

      • The IRS assessed the tax and sent you a Notice and Demand for Payment (a tax bill);

      • You neglected or refused to pay the tax; and

      • The IRS sent you a Final Notice of Intent to Levy and Notice of Your Right to A Hearing (levy notice) at least 30 days before the levy. The IRS may give you this notice in person, leave it at your home or your usual place of business, or send it to your last known address by certified or registered mail, return receipt requested. Please note: if the IRS levies your state tax refund, you may receive a Notice of Levy on Your State Tax Refund, Notice of Your Right to Hearing after the levy.

      • The IRS sent you advance notification of Third Party Contact notifying you that IRS may contact third parties regarding the determination or collection of your tax liability.”

Is an LT11 Preventable?

To prevent an LT11 form from being issued, the Taxpayer must agree with the IRS to either make payments or enter into a payment arrangement. Otherwise, if the tax liability or penalty liability is still outstanding then the IRS is empowered to pursue collection including issuing an LT11 to facilitate a seizure of assets by way of levy.

How to Stop an LT11?

To stop an LT11 from going forward, the taxpayer may want to consider pursuing a Collection Due Process Hearing if the Taxpayer believes that there is a dispute as to liability then they may be able to challenge it at a collection due process hearing and claim reasonable cause. Alternatively, the collection due process hearing will stop enforcement and provide the Taxpayer with an opportunity to enter into a payment arrangement or possibly reduce the penalty or tax liability if applicable.

Late Filing Penalties May Be Reduced or Avoided

For Taxpayers who did not timely file their FBAR and other international information-related reporting forms, the IRS has developed many different offshore amnesty programs to assist Taxpayers with safely getting into compliance. These programs may reduce or even eliminate international reporting penalties.

Current Year vs. Prior Year Non-Compliance

Once a Taxpayer missed the tax and reporting (such as FBAR and FATCA) requirements for prior years, they will want to be careful before submitting their information to the IRS in the current year. That is because they may risk making a quiet disclosure if they just begin filing forward in the current year and/or mass filing previous year forms without doing so under one of the approved IRS offshore submission procedures. Before filing prior untimely foreign reporting forms, Taxpayers should consider speaking with a Board-Certified Tax Law Specialist who specializes exclusively in these types of offshore disclosure matters.

Avoid False Offshore Disclosure Submissions (Willful vs Non-Willful)

In recent years, the IRS has increased the level of scrutiny for certain streamlined procedure submissions. When a person is non-willful, they have an excellent chance of making a successful submission to Streamlined Procedures. If they are willful, they would submit to the IRS Voluntary Disclosure Program instead. But, if a willful Taxpayer submits an intentionally false narrative under the Streamlined Procedures (and gets caught), they may become subject to significant fines and penalties. 

Need Help Finding an Experienced Offshore Tax Attorney?

When it comes to hiring an experienced international tax attorney to represent you for unreported foreign and offshore account reporting, it can become overwhelming for Taxpayers trying to trek through all the false information and nonsense they will find in their online research. There are only a handful of attorneys worldwide who are Board-Certified Tax Specialists and who specialize exclusively in offshore disclosure and international tax amnesty reporting. 

*This resource may help Taxpayers seeking to hire offshore tax counsel: How to Hire an Offshore Disclosure Lawyer.

Golding & Golding: About Our International Tax Law Firm

Golding & Golding specializes exclusively in international tax, specifically IRS offshore disclosure. 

Contact our firm today for assistance.