January 28, 2015

Denver Tax Attorney   What Does It Mean to Receive A Notice of Intent to Levy From the IRS?Being issued a notice of intent to levy from the IRS is a terrifying experience for most people, since this probably means that there is a major problem with your taxes – yet no measures have been taken to resolve the issue. The good news is that taking the proper steps and handling the intent to levy prudently, it is still possible to get back in to the good graces of the IRS.

An intent to levy notice means that you have not paid attention to past notices of delinquent taxes, and that the IRS is very serious about collecting them from you. It does not, however, mean that they will show up at your house and take all your possessions away from you. The sending of this notice is a step required by the IRS before they can begin to levy your assets.

The IRS, however, must first meet conditions set by the U.S. Congress before they can levy. These conditions are:

  • To give written notice of intent to levy that explains your right to appeal the levy
  • To personally deliver the notice to your home or by mail to your last known address 30 days before taking action
  • To explain the reason for the levy, the levy process, and your alternatives for collection

Since you are unable to pay what you owe on your own, a tax levy is one way for the IRS to collect from you. The IRS will typically levy your wages, social security, bank accounts, commissions, property, rights to property, and other assets in order to satisfy due tax amounts.

Types of Levy Notices

Not all notices of intent to levy are the same. CP 297 and CP 90 are two letters used to notify you of an unpaid balance the IRS has requested for previously. They also state that they intent to levy federal payments owed to you, such as social security benefits.

CP 523 is a document sent to you if you defaulted on payments while you were paying through an installment agreement. It explains the cause behind the default, as well as informs you of the intent to levy and also provides you with options on how to resolve the situation.

L-1058 and L-T11 are documents that generally follow CP 504. The L-1058 states that despite all the notification letters that have been sent to you previously, you have a balance that you failed to address. It also warns you that the IRS will issue a levy on your personal assets after 30 days.

CP 91 and CP 298 are two letters sent to you if you still owe money, even after receiving letters that warned you of a 15 percent levy on social security benefits that take effect if a payment agreement is not set up or if your tax bill is not paid off. It is common for either CP 297 or CP 90 to precede one of these letters.

Preventing a Tax Levy

If you wish to prevent a tax levy, immediately contact the IRS and come to an agreement on how to pay back the taxes that you owe. You may opt to submit an offer in compromise or set up an installment agreement in order to slow down the levy process or stop it altogether. The easiest way to prevent the IRS from levying your assets is by paying the amount owed in full, which will instantly stop all collection actions against you.

If you owe a larger amount (typically $10,000 or more) you should consider talking to an experienced IRS tax attorney to go over your options.

Categories: IRS, Mailed Tax Notices