The IRS will send you Notice LT11 if they haven’t received any payment from you for your overdue taxes. The letter is to advise you of their intent to seize your property or rights to property. So what action should you take?
If you have already paid
If you already paid in full or think the IRS hasn't credited a payment, send proof of that payment to the IRS at the address on the notice.
You'll then want to follow up with the IRS. Call them to ensure they have received your payment and have properly applied it to your account.
If you haven't paid, or can't afford to pay
Interest and applicable penalties will continue to accrue until your balance is paid in full.
The IRS says you can "Quickly and easily, pay your balance online"! I'm guessing that if you haven't paid yet, you can't afford to. An error a lot of people make at this point is borrowing money from a friend or family member to pay off the balance. This is not a good idea...
Why? If you can't afford to pay your tax due, this is the best time to negotiate with the IRS. Not later, when you could have more money in the bank...
When trying to negotiate payment options with the IRS, they will look at your current assets and liabilities. The less you have, the less you can afford to pay.
Tax negotiation options
Below are the most common tools used to negotiate a debt or repay it over time. A legal opinion may be helpful to find and implement the optimum course of action.
What happens if I don’t respond to this letter or don’t pay?
The IRS can attach a levy to your wages or bank accounts up to the amount owed. They can also take enforced collection action to collect the amount including the filing of a Notice of Federal Tax Lien. A lien is a public notice to your creditors that the government has a right to your interests in your current assets and any assets you acquire after they file the lien. Unfortunatley, this can affect your credit score and your ability to get credit.
Depending on the amount you owe, your US passport may also be at stake. The IRS has the ability to revoke or deny your passport. Learn more about that law here.
What kinds of property can the IRS levy?
Property can include wages and other income, bank accounts, business assets, personal assets (including your car and home), Alaska Permanent Fund Dividends and state tax refunds, and Social Security benefits.
If you have received an LT11 and are unsure of how to proceed, contact us or watch the video on this topic below. There is help. Call us at 888-727-8796 or email email@example.com.