A final notice of intent to levy is the IRS telling you exactly what it is about to do and exactly how long you have. Most of the bank levies I see could have been avoided at this stage.
Here is how to read the notice, which deadline actually matters, and what to do in the next 30 days to keep your account open.
Two different legal requirements
People use "final notice" loosely. The Code actually has two separate notice requirements before a levy, and they do different jobs.
The § 6331(d) notice of intent to levy
IRC § 6331(d)(1) says a levy may be made "only after the Secretary has notified such person in writing of his intention to make such levy." Under § 6331(d)(2), the notice must be given in person, left at your home or business, or sent by certified or registered mail to your last known address, no less than 30 days before the levy. Section 6331(d)(4) requires it to explain, in simple and nontechnical terms, the levy rules, the appeals available, the alternatives that could prevent levy (including installment agreements), and the passport certification provisions of § 7345.
The IRS describes its CP504 notice as the Notice of Intent to Levy required by § 6331(d). The CP504 also warns that the IRS can levy a state tax refund, and that it can take income, bank accounts, and other property.
The § 6330 notice of your right to a hearing
IRC § 6330(a)(1) says no levy may be made unless the IRS has notified you in writing of your right to a hearing before the levy. Under § 6330(a)(2), it must be delivered in person, left at your home or business, or sent by certified or registered mail, return receipt requested, to your last known address, at least 30 days before the first levy for that tax period. It must state the amount owed, your right to request a hearing within the 30-day period, and the proposed action.
The IRM identifies the common versions: the LT11 from the Automated Collection System, and Letter 1058 from revenue officers in the field, among others (IRM 5.19.4.3.1). The IRS frequently combines the § 6331(d) and § 6330 requirements in one letter. The title usually includes some version of "Notice of Intent to Levy and Notice of Your Right to a Hearing."
Why the CDP notice is the one to circle in red
Section 6330(a)(1) says the CDP notice is required "only once for the taxable period." If you miss the 30 days, you do not get a new CDP hearing for that period just because the IRS sends another warning later. The regulations say the IRS generally sends reminder notices if no collection action happens within 180 days, but only the first CDP notice entitles you to a CDP hearing for those periods (Treas. Reg. § 301.6330-1(b)).
A timely CDP request does three powerful things:
- It suspends levy. Under § 6330(e)(1), levy actions that are the subject of the hearing are suspended while the hearing and any appeals are pending.
- It gets you an independent officer. The hearing is held by the IRS Independent Office of Appeals, with an officer who had no prior involvement with the tax (§ 6330(b)).
- It gets you a judge. You can petition the Tax Court within 30 days of the determination (§ 6330(d)(1)).
The full hearing process is in CDP hearings to stop a bank levy.
Checking the notice for problems
Before you do anything else, look closely at the notice. Problems here can matter later.
- The address. It must go to your last known address. If you moved and the IRS had your new address, note it.
- The periods. A levy can only include periods covered by a proper CDP notice. If additional tax is assessed for a period later, a new CDP notice is required before that new assessment is levied (IRM 5.11.1.3.2.1; IRM 5.19.4.3.1).
- Joint liabilities. For joint return balances, the IRM says notices must be sent separately to each spouse, in separate envelopes (IRM 5.11.1.3.3.4). If your ex-spouse got a notice and you did not, that matters.
- The date. Your 30 days begin the day after the date of the CDP notice (Treas. Reg. § 301.6330-1(c)). Not the day you opened it.
Your options in the 30 days
1. Pay
If you can pay in full, do it, and keep proof. A levy issued after payment is erroneous and must be released, and related bank charges may be reimbursed. See bank fees and Form 8546.
2. Set up a payment plan
A pending installment agreement request bars levy under § 6331(k)(2), as long as it actually qualifies as pending under the IRS criteria. See installment agreements and bank levies.
3. File an offer in compromise
Once accepted for processing, an offer bars levy under § 6331(k)(1). See offers and bank levies.
4. Request a CDP hearing
Treas. Reg. § 301.6330-1(c)(2), A-C1, says the request must be in writing, dated, and include your name, address, daytime phone number, and taxpayer ID; the type of tax; the periods; a statement that you request a hearing with Appeals concerning the proposed levy; the reasons you disagree; and your signature or your representative's. The regulation encourages using Form 12153, Request for a Collection Due Process Hearing, sent to the address on the CDP notice (A-C6). Timely mailing rules under §§ 7502 and 7503 apply.
A CDP request is not only for people who think the IRS is wrong. You can use it to propose an installment agreement, an offer, or other collection alternatives, and to raise spousal defenses (§ 6330(c)(2)(A)).
5. Request a CAP appeal
The Collection Appeals Program covers levies that "will be taken," not just ones already served (IRM 5.1.9.4). CAP is faster but more limited: there is no Tax Court review. You can request both CAP and CDP on the same proposed levy, but an issue decided in a completed CAP appeal in which you participated meaningfully may not be raised again in a CDP hearing (IRM 5.1.9.4). See CAP and bank levies.
The exceptions that skip the 30 days
Section 6330(f) allows a levy before a CDP hearing, with a hearing offered within a reasonable time afterward, in four cases:
- A jeopardy finding under § 6331(a). See jeopardy levies.
- A levy on a state tax refund.
- A "disqualified employment tax levy," which applies to businesses that requested a CDP hearing on employment taxes for an earlier period within the prior two years (§ 6330(h)(1)).
- A federal contractor levy.
For a typical individual bank levy, none of these apply, and the 30 days are real.
What usually happens if you do nothing
The ACS procedures give a sense of timing. IRM 5.19.4.3.1 says a minimum of 30 days must pass between the LT11 and the levy request, and that the LT11 carries a systemic 53-day follow-up to allow time for payments and appeal requests. After that, levy sources on file are fair game. If the IRS also needs to give you advance notice of third-party contacts under § 7602(c), that notice comes at least 45 days before the contact period.
When the levy does hit your bank, you still have the 21-day hold under § 6332(c). But you will be working from behind. See your first 48 hours after a bank levy.
The final notice is the IRS showing you its cards. Thirty days is enough to play yours, if you start today.
For background on what to do when you owe and cannot pay, see the firm's guide I owe the IRS: what to do.