First, do not panic. It is important for taxpayers to open any mail they receive from the IRS. Please read any notices or letters from the IRS carefully. Otherwise, taxpayers may miss their opportunity to dispute a tax issue, or preserve their appeal rights.
Generally, the IRS communicates with taxpayers by sending them correspondence through the mail. Although the format of the notices may vary, they all have certain things in common. All IRS notices will have the name and address of the IRS office that issued the notice located in the upper left hand corner. Usually if a response is required, the taxpayer should mail the response to the address located on the upper left hand corner of the notice unless the notice states otherwise. The notice will also provide a phone number of the office to contact, the type of tax and tax year(s) at issue, and a time frame to respond. Generally, IRS notices will allow 10, 30, 60 or 90 days to respond. If any notices are sent via certified mail, please pay close attention to and make sure to respond accordingly.
The IRS is required to inform taxpayers in writing of their intent to levy or seize any property before they can take any action. The way the IRS notifies taxpayers of their intent to levy is by sending them correspondence via certified mail. Generally, IRS collection notices provide a certain time frame to respond, which is either 10 or 30 days. The IRS will issue a CP-504 Intent to Levy notice informing taxpayers of their intent to levy if payment is not made within a certain time. A CP-504 will be issued for each tax period with a balance due. A CP-504 notice notifies taxpayers that the IRS can levy any state tax refund and that a federal tax lien may be filed. A federal tax lien is filed with the county in which the taxpayer resides to protect the IRS’ interest in the outstanding tax liability. The notice of federal tax lien is public record and effects the taxpayer’s credit.
If the taxpayer does not respond to the CP-504 Intent to Levy notice within 30-days, the IRS will proceed to issue a LT-11 which is referred to as the “Final” Notice of Intent to Levy and Right to Collection Due Process Hearing. The LT-11 is mailed to the taxpayer via certified mail and provides the taxpayer the right to file an appeal within 30-days from the date of the letter. Please pay close attention to the type of tax and tax periods on the notice. A taxpayer can file an appeal by completing the Form 12153 Request for a Collection Due Process or Equivalency Hearing for the specific tax periods on the notice. Keep in mind that there may be other tax periods that may not covered on the LT-11, thus it will not be part of the appeal.
The Form 12153 is mailed in the same envelope as the LT-11. This Form 12153 must be completed by the taxpayer or their representative to preserve the taxpayer’s constitutional right to a hearing. If the appeal is filed on the 31st day, the taxpayer can still have their right to a hearing, but it may not protect them from enforcement action such as bank levies and wage garnishments by the IRS.