If you owe IRS back taxes, the IRS can issue an IRS Bank Levy to collect said back taxes. The IRS Levy is a hold on your money, up to the amount of the back taxes.
The IRS will provide a taxpayer with some advance notice – a Notice of Levy – that the IRS intends to levy the taxpayer’s bank account if the taxpayer fails to contact the IRS. Not every Notice of Levy is created equally. What does it mean if you receive a CP504 Notice of Levy? A CP504 Notice of Levy is a Notice of Intent to Levy. The CP504 Notice of Intent to Levy tells you that you owe tax to the IRS. The CP504 Notice of Intent to Levy tells you to pay your tax in full by a specific date. What if you do not pay? Then the IRS will take any state tax refund you would be entitled to. The CP504 Notice of Levy tells you the IRS will search for other assets you own to levy! If the amount of tax owed is over $52,000.00, the IRS could notify the State Department. Upon receipt of the IRS notification, the State Department will deny your passport application, or your passport will be revoked! What if you are not getting or expecting a state refund and not planning to travel abroad? What if you do not own any assets? The CP504 is a direwarning that the IRS is coming after you soon! The CP504 Notice of Levy means that you are quickly running out of time to resolve your tax problem!
Unlike the CP504 Notice of Levy, the LT11 Notice of Intent to Levy is the real deal! The LT11 Notice of Intent to Levy is your Final Warning! The LT11 Letter of Intent also tells you that you owe tax to the IRS and you case is in IRS collection unit. The LT11 Notice of Intent to Levy instructs you to pay your tax in full by a specific date. What if you do not pay? Unlike the CP504 Notice of Intent to Levy, the IRS WILL LEVY after 30 days from the date of the LT11 Notice! The IRS levy could be in the form of an IRS bank levy. An IRS bank levy allows the IRS to seize money in your bank account! Or, the IRS levy could be in the form of an IRS wage garnishment letter. The wage garnishment letter orders your employer to take money out of your paycheck to send it directly to the IRS!
What if you are unable to pay your tax by the LT11 Notice of Levy due date? How can you stop an IRS levy action? An LT11 Notice of Intent to Levy also tells you that you have certain rights. Only the LT11 Notice of Intent tells you of these rights. To stop a levy, you must file a Request for Collection Due Process (CDP) Hearing. If the IRS sends you an LT11 notice of levy or a Notice of Federal Tax Lien you have the right to request a CDP hearing. You have 30 Days from the date on the LT11 Notice of Levy to request a CDP Hearing. IRS Appeals will then schedule an appointment for the CDP Hearing. However, the purpose of the CDP Hearing is only to make sure IRS collection procedures were properly followed. Therefore, the purpose for requesting a CDP Hearing is to buy time to resolve your tax case.
How can you resolve your tax case before the CDP hearing date? Call the IRS Collections number on either the LT11 or the CP504. Discuss your situation with the IRS agent over the telephone and your payment options.
If you do not either pay the tax in full by the due date stated in the LT11 or call the IRS number on the LT11 prior to that date to resolve your tax problem, the IRS could send an IRS bank levy to your bank at any time thereafter. The funds in your bank accounts are frozen as of the date and time the IRS levy notice is received by the bank. The bank will hold your money for 21-days from the date that the bank receives the IRS levy notice. The 21-day hold is to provide you additional time to contact the IRS to notify the IRS of any possible errors in the levy or to otherwise resolve your tax issue prior to the bank sending your money to the IRS.
Therefore, once your bank has received the IRS Bank Levy time is of the essence! If you have not resolved your tax issue with the IRS within 21 calendar days from the date that your bank receives the IRS levy notice, the bank will send your seized monies to the IRS!
Through an IRS Bank Levy, the IRS can seize every penny in your account! If you can show the IRS that you are in hardship, you may be able to successfully release the bank levy in full or obtain a partial bank levy release.
Do you need help in replying to either an LT11 or CP504 Notice of Levy? Has your bank already received an IRS bank levy? Do you need help with a CDP Hearing?Do you need help trying to persuade the IRS that you are in financial hardship?
Coast One Tax Group is a group of resolution specialists – attorneys, accountants and Enrolled Agents. The resolution specialists at Coast One Tax Group are experienced in handling CP504 and LT11 Notice of Levy matters, and in handling CDP Hearings.
My colleagues and I work hard to obtain the best tax resolution (settlement) possible for our Clients! Coast One Tax Group can help you with your CP504 or LT11 Notice or CDP Hearing and with any other federal or state levy notice. Coast One Tax Group can assist you in resolving (settling) your IRS tax case. Do you qualify for an IRS Offer in Compromise? An Economic Hardship Partial Payment Plan? Currently Non-Collectable (CNC) Status? An IRS Installment Agreement? Which resolution is best for you? If, for example, we think you may qualify for an Offer in Compromise, how much could you save? Regarding Offers in Compromise we submitted, last year (2018), on average, we saved our clients a minimum of 92% of the amount of back taxes owed, and we have substantiated claims to prove it! Unfortunately, we cannot win them all. We cannot quarantine that ultimately the IRS will grant, for example, your specific Offer in Compromise. However, we will never submit an OIC unless it is a strong case. If you do not have a strong OIC case, we will tell you. And, we will find the best resolution (settlement) that you do qualify for! Call, text, email or contact Coast One Tax Group on our web site now for a free consultation to find out how Coast One Tax Group can help you!
If you owe $10,000 or more in back taxes to the State or IRS, the team of tax experts at Coast One Tax Group is here to help.