IRS LT 1058: Final Notice of Intent to Levy – What to Do

Letter 1058 from the IRS is your final notice of intent to levy for unpaid taxes. You have 30 days to respond by setting up payments or requesting a Collection Due Process (CDP) hearing. If you don't take action, the IRS will move forward with garnishing your wages, freezing your bank account, or even seizing physical assets. This is your last warning before those actions take place. Even if you have ignored every other IRS notice, you should pay attention to this one.

Key takeaways

• LT1058 - Final Intent to Levy and Your Right to Request a Hearing
• When it comes - Usually, it comes after Notice CP504. It's always preceded by other collection letters and comes after you have ignored multiple demands for payment.
• What to expect - If you don't respond within 30 days, the IRS will move forward with wage garnishment, freezing your bank account, or even seizing physical assets if the first two options don't cover your tax debt.
• How to respond - Set up payments or apply for relief from the IRS. Or request a Collection Due Process hearing within 30 days to appeal the levy and make payment arrangements. 
• What if you disagree - If you disagree with the IRS seizing your assets, request a hearing. If you disagree with the tax due shown on the notice, you can only appeal through a CPD hearing if you haven't had a chance to do so in the past. Talk with a tax pro if you disagree with this notice.

What Is IRS Letter-1058?

LT1058 is a Final Intent to Levy Notice With Your Right to a Hearing. That means it's the final notice the IRS sends before moving forward with wage garnishment or asset seizure. If you don't respond to this letter, you will wake up one day to a frozen bank account, garnished wages, or even worse, a padlocked business or the IRS seizing your real physical assets. This notice is generally issued by IRS Revenue Officers - in contrast, LT11 is a very similar notice sent by the IRS's Automated Collection System. 

The IRS must send this letter by certified or registered mail to your last known address, or they must hand deliver it to your known dwelling or place of business. Alternatively, they may hand it directly to you. As long as the IRS uses one of those options, they have met their legal requirements under the Internal Revenue Code. If you don't receive the letter for some reason, the IRS can still move forward with the levy.

What Does LT1058 Mean?

In short, this letter means that the IRS wants you to pay now, and if you don't, the agency is going to collect the tax debt without your cooperation (through tax levies and wage garnishments). The letter explains how much you owe, including interest and penalties. It also outlines payment options and explains how to appeal the collection actions by requesting a Collection Due Process (CDP) hearing.

What property can the IRS take?

Letter 1058 often features a list of the assets the IRS may seize. To put it bluntly, the agency can take about everything, including wages (except for a very small exempt amount), bank accounts, investment accounts, retirement accounts, certain types of pensions, Social Security income (not Supplemental Security Income or child's survivor's benefits, and they must leave you a small amount to live on), real or personal property, and other assets. If applicable, the IRS can seize business property ranging from the cash in your cash register to your inventory and equipment. 

There are very few exceptions to what the IRS can seize. The agency generally cannot take unemployment compensation, workers' comp, disability payments, school books, a small amount of personal effects, and certain tools of the trade. The agency generally does not take people's homes or primary vehicles, but there are exceptions where the IRS can seize homes and cars.

How To Appeal Letter 1058

If you don’t agree with the amounts listed in letter 1058, you have a legal right to appeal. To start that process, complete Form 12153, Request for a Collection Due Process or Equivalent Hearing. You must send the IRS that form within 30 days, or you forfeit the right to a CDP hearing. Note that the 30 days start on the date the letter was issued. They do not start the day you receive the letter. To help you, the deadline should be noted in the letter.

What to expect with a CDP hearing

The word "hearing" makes this process sound scarier than it is. If you request a CDP hearing, the IRS will schedule a meeting - usually on the phone - for you to talk with an IRS employee. During the meeting, you get to explain why the IRS shouldn't levy your assets, and you can also present payment options. For example, you can use this time to talk about IRS installment agreements (monthly payment plans), offer in compromise (settle for less than owed, based on limited income or assets), or other payment options. 

Can you appeal the tax due in a CDP hearing

You can only appeal the amount of tax due at the hearing if you haven't had a chance to do so in the past. By the time the IRS sends this letter, most taxpayers have had a chance to appeal the amount of their tax debt. If you can't appeal the tax debt but you disagree with the amount due shown on your notice, talk with a tax professional about your options. Depending on the situation, they may request an offer in compromise based on doubt as to liability, or they may suggest paying in full and then applying for a refund. There are other options as well.

What if you miss the deadline to request a CDP hearing?

If you miss the deadline, the IRS will move forward with levying your assets, and once you're dealing with a frozen account or a wage garnishment, those actions can be hard to reverse. However, you still have the right to request an equivalent hearing. The deadline for an equivalent hearing is one year after the notice was sent. This is similar to a CDP hearing, with one major exception - you can appeal the results of a CDP hearing but not an equivalent hearing.

How to Make Payment

If you are making a full or partial payment, make a check or money order payable to the United States Treasury. Then, mail the payment to the address on the letter. Put your Social Security number (SSN) or Employer Identification Number (EIN) on the memo line so the IRS knows where to apply the payment.

The Risks of Ignoring Letter 1058

If you don’t respond to letter 1058, the IRS may move forward with more serious collection activity. That includes seizing funds from bank accounts, levying personal assets (cars, automobiles, houses, etc), and garnishing wages.

The IRS may also issue a Notice of Federal Tax Lien. That tells creditors that the IRS has the legal right to put a lien on your current or future assets. When a federal lien appears on your credit report, it’s virtually impossible to take out a loan.

What If You're Unable to Pay the Balance

If you can’t pay the balance, you should contact the IRS about making alternative arrangements or reach out to a tax professional on TaxCure using the "find a local tax pro" button at the top of the page. A licensed tax professional can represent you and can help you set up a payment arrangement or submit an offer in compromise.

Depending on your situation, a tax professional may be able to help you appeal the amount that is due, reverse penalties and late fees, and set up a tax resolution. If you have ignored every other notice from the IRS, this is the one you need to pay attention to—fill out the form at the top of the page to get help today. 

How Does the IRS Have the Right to Seize Assets?

I.R.C. § 6331 outlines the IRS's legal rights to seize assets for unpaid taxes. This part of the tax code says that the IRS must give you a 30-day warning before seizing your assets. Letter 1058 serves as this advance warning. This statute also explains that the IRS does not need to provide advance warning if dealing with a jeopardy levy where the collection of the tax is in jeopardy.

What to Do If the IRS Has Already Levied Your Assets

If you received Letter 1058 a while ago and the IRS has already started to levy your assets, there are a variety of ways that the levy can be stopped even after it has started. Every person has a unique situation, and there are methods to stop a levy depending upon your situation.  If your physical property has been seized, you have a limited window of time in which you can buy it back, plus collection costs and interest. For more details on stopping a tax levy after it has already started, please refer to this guide on stopping or releasing a tax levy. If you are dealing with an IRS bank levy, you can read more about ways to stop or release one. To connect with a tax professional who has experience preventing tax levies, visit these search results. 

How to Get Help With IRS Letter 1058

Do not ignore this notice. The final intent to levy notices are the most serious IRS notices, and even if the IRS has done nothing yet, the agency is getting ready to take action now. The IRS has more collection power than any private creditor, and if you ignore its letters, you will face serious consequences. Get help from a tax professional now - using TaxCure, you can search for a pro who has the exact experience you need to move forward from your tax problems.