LT11 and Letter 1058: the final notice of intent to levy and the 30-day CDP window

What the notice means

IRC 6330(a)(1) says no levy may be made on any property or right to property “unless the Secretary has notified such person in writing of their right to a hearing under this section before such levy is made.” The notice must be given in person, left at the dwelling or usual place of business, or sent by certified or registered mail, return receipt requested, to the last known address, not less than 30 days before the first levy for that tax period (IRC 6330(a)(2)).

The ACS version is titled, in IRM 5.19.1, “LT11, Final Notice -- Notice of intent to levy and your notice of a right to a hearing.” The field version is Letter 1058. IRM 5.19.4.3.1 tells ACS employees to issue the LT11 “ONLY where the next action will be to levy” and requires a usable levy source first. The IRS LT11 page summarizes the message: the IRS intends to seize property or rights to property, and the taxpayer must contact the IRS immediately.

If no CP504 was issued, the CDP letter does double duty. IRM 5.1.9.3.14: “If no IRC 6331(d) notice (CP 504 notice or ‘Status 58’ notice) has been issued, then issuing the L-1058 meets both the requirements of IRC 6331(d) and IRC 6330.”

Why the client got it

For individual accounts, the LT11 usually follows the notice stream and the CP504 once the account reaches ACS. For business accounts, revenue officers commonly issue Letter 1058 at initial contact when they set a deadline: IRM 5.11.1.3.3 says it “is usually issued on initial contact with a BMF or combination BMF/IMF taxpayer when a deadline is set for the taxpayer to take specific action.” IRM 5.11.1.3.3 also tells revenue officers to use discretion before issuing it on initial contact with an individual-only balance.

A new assessment on a period already covered by a CDP notice requires a new one. IRM 5.11.1.3.2.1 says that if additional tax or a penalty is assessed after the notices were issued, “a new notice offering a CDP hearing for the additional assessment must be issued before that additional assessment may be included in a levy,” with an exception for accruals of penalty and interest already covered.

Deadlines and what happens if they pass

IRM 5.11.1.3.2 gives the counting example: a notice given on March 1 makes March 2 day one, the taxpayer has until close of business March 31, and with the extra 15 days the revenue officer will not levy until April 16. The IRM warns employees that discussions do not stop the clock: they must tell taxpayers “that discussions with Collection do not suspend the running of (or otherwise extend) the 30-day period during which taxpayers may request a CDP hearing” (IRM 5.1.9.3.2).

A timely CDP request generally stops levy on the periods involved and suspends the collection statute. Publication 594 says collection is suspended from the request date until 30 days after the Notice of Determination, or until a timely Tax Court case is final. A late request does not automatically become an equivalent hearing: under IRM 5.1.9.3.2.2 the taxpayer must ask for one (checking the box on Form 12153 is one way), there is no Notice of Determination, no Tax Court review, and the collection statute is not suspended. See equivalent hearings and the CSED.

How to respond

1. Calendar the letter date plus 30 days. Use the CDP deadline calculator and do not rely on the date the client opened the envelope.
2. Decide whether to request a hearing. If there is any chance the client will need Tax Court review or a collection alternative with levy protection, file the request; it can be withdrawn later.
3. Complete Form 12153, or a signed written request containing the items IRM 5.1.9.3.2 lists: name, address, daytime phone, TIN, type of tax, periods, a statement requesting a hearing on the proposed levy, the reasons for disagreement, and the signature of the taxpayer or authorized representative.
4. State the issues. IRC 6330(c)(2)(A) lets the taxpayer raise spousal defenses, the appropriateness of collection action and collection alternatives such as an installment agreement or offer in compromise. The underlying liability can be challenged only if the taxpayer did not receive a notice of deficiency or otherwise have an opportunity to dispute it (IRC 6330(c)(2)(B)). Frivolous positions are disregarded (IRM 5.1.9.3.2). Our CDP request attachment template lays this out.
5. Mail it to the address on the letter by certified mail and keep the postmark proof. For an LT11, IRM 5.11.1.3.3.1 notes the Form 12153 is mailed to one of the four ACS Support sites.
6. Keep working with Collection. IRM 5.1.9.3.3 encourages taxpayers to continue working with Collection after a request, and Collection is told to contact the taxpayer within 10 calendar days when a collection alternative is raised.
7. Prepare the financials. A collection alternative in the hearing normally needs a collection information statement and current filing compliance.

What the IRS does next

With no request, the IRS can levy after the 30 days (ACS follow-up is set for 53 days after the LT11 under IRM 5.19.4.3.1). Publication 594 lists what can be levied: wages and other income, bank accounts (the bank holds funds 21 days before sending them), retirement accounts, federal payments through the Federal Payment Levy Program, and real and personal property. See levies and wage garnishment.

With a timely request, Collection logs it and sends the case to Appeals. Appeals holds the hearing by telephone, by correspondence or, if the taxpayer qualifies, in person (Publication 594), and issues a Notice of Determination. The taxpayer has 30 days to petition the Tax Court (IRC 6330(d)(1)). See CDP hearings and Tax Court petitions.

Related notices

• CP504: the IRC 6331(d) notice that often comes first.
• CP90: the automated CDP notice for federal payment levies.
• Letter 3172: the CDP notice for a filed Notice of Federal Tax Lien.
• LT16: the ACS request to call about a balance or unfiled returns.

Questions practitioners ask