What is IRS Letter LT11?
When you receive IRS Letter LT11, officially titled 'Notice of Intent to Levy and Your Right to a Hearing', it signifies that the IRS intends to seize your assets to satisfy a tax debt. This notice follows previous attempts to resolve the debt, indicating a serious situation requiring immediate attention.
Why Did I Receive This Notice?
This letter indicates the IRS's intent to levy your wages, bank accounts, or other assets. Receipt of LT11 typically means that:
- You have a balance due and have not responded to prior notices.
- A federal tax lien has been filed, escalating collection actions.
- The IRS has been unable to secure payment through prior means.
Your Rights Under IRS Letter LT11
Receiving this notice entitles you to specific rights, including the right to a Collection Due Process (CDP) hearing. According to IRS Publication 1660, this hearing can help you contest the levy or propose alternative solutions, such as an installment agreement.
Actions You Can Take Immediately
Upon receiving a Letter LT11, swift action is critical:
- Review Your Tax Debt: Confirm the accuracy of the reported debt by examining previous notices and your tax returns.
- Request a CDP Hearing: You have 30 days from the date on the notice to submit Form 12153 to request a hearing. This request halts levy actions until your hearing is resolved.
- Consider Payment Options: Explore solutions like setting up an Installment Agreement (IA) or proposing an Offer in Compromise.
Alternatives and Solutions
Beyond a CDP hearing, various alternatives might resolve your issue:
Installment Agreements and Offers in Compromise
An Installment Agreement allows you to pay your debt over time, while an Offer in Compromise (OIC) might enable you to settle for less than the total owed. Eligibility criteria for these programs are detailed in IRS Form 656-B.
Innocent Spouse Relief
If applicable, you might qualify for Innocent Spouse Relief under IRS Section 6015, which can alleviate liability for tax debts incurred by your spouse under specific conditions.
Currently Not Collectible Status
If you're experiencing financial hardship, you might qualify for Currently Not Collectible (CNC) status, halting collection actions.
Preparing for a CDP Hearing
A successful hearing requires thorough preparation. Gather all necessary documentation, such as financial statements and correspondence with the IRS. Stand prepared to discuss your situation and proposed resolutions.
The CDP Hearing Process
At the CDP hearing, an IRS appeals officer reviews your case and examines available options. According to IRC Section 6330(c), this is your opportunity to dispute the tax amount or propose alternatives.
Conclusion
Navigating the complexities of IRS Letter LT11 can be daunting. By understanding your rights and options, and acting promptly, you can effectively manage the situation. If you need tailored guidance, visit our dashboard for professional help.
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Frequently Asked Questions
What should I do upon receiving Letter LT11?
Review your tax debt, request a CDP hearing if necessary, and consider payment options.
What is a CDP hearing?
A Collection Due Process hearing is your right to contest the levy or propose alternative solutions.
How long do I have to request a CDP hearing?
You have 30 days from the date on the notice to request a hearing using Form 12153.
Can I negotiate a payment plan?
Yes, you can set up an Installment Agreement to pay your tax debt over time.
What's an Offer in Compromise?
It allows you to settle your tax debt for less than the full amount owed, subject to eligibility.
What if I'm under financial hardship?
You may qualify for Currently Not Collectible status to halt collection actions.
Can I dispute the tax amount at the CDP hearing?
Yes, you can dispute both the tax amount and propose resolution alternatives at the hearing.
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