What are the IRS Automated Collection Letters: LT11, LT17, and LT19?
Notices LT11, LT17, and LT19 are all sent from the IRS Automated Collection System (ACS) when you owe back taxes. ACS’s purpose is to follow up with taxpayers who have unpaid taxes to resolve the balance due.
LT11: Final Notice Intent to Levy and Right to Hearing
Receiving an LT11 means the IRS has not received a payment for past due taxes and intends to seize your property. Examples of assets the IRS can legally seize to pay a tax debt include wages (garnishment), bank accounts, Social Security benefits, retirement contributions, and state tax refunds.
LT17: Please Take Action on Balance Due Using IRS Online Services
An LT17 notice reminds you that you owe taxes and must start to pay off the tax debt using online payment services. This notice also explains how to use the online IRS services, what you can do to prove your inability to pay due to financial hardship, and the steps to take if you wish to appeal.
Ignoring an LT17 may result in the IRS seizing your assets and filing a federal tax lien on your property.
LT19 Pay Your Outstanding Tax Returns
The LT19 notice informs you that there is an outstanding balance on your account and the IRS is attempting to collect on that tax debt.
The notice contains details about the debt and what you can do if you cannot pay the total balance in one payment.
What Should You Do If You Receive an LT11 Notice?
You have 30 days to respond to an LT11 and pay or make payment arrangements before the IRS files a lien or takes money from your paycheck, bank accounts, Social Security, or retirement.
In extreme cases, they may even seize your car or home. If you cannot afford to pay the entire amount due, you can set up an installment agreement, request an Offer in Compromise, or prove financial hardship to delay collections.
If you disagree with the balance due, file Form 12153 within 30 days of receiving letter LT11 to request a Collection Due Process hearing.
What Should You Do If You Receive an LT17 Notice?
When you get an LT17, the IRS asks you to “pay as much as you can” by submitting funds online using a bank account or debit/credit card or enrolling in the Electronic Federal Tax Payment System (EFTPS).
This notice also includes information about applying for a payment plan if you need more time to pay off the tax debt.
If you do not respond to an LT17 letter, the IRS will add penalties and interest to your balance and can take additional action to collect the full amount you owe with a lien or levy.
What Should You Do If You Receive an LT19 Notice?
Like collections letters LT11 and LT17, LT19 is another attempt by the IRS to resolve your back taxes. You can pay your balance online or by mail using the voucher included in this notice.
If you cannot make full payment, the IRS asks that you request a monthly payment plan, submit an Offer in Compromise, or apply for Currently Not Collectible status.
Not paying the LT19 balance due or having a payment agreement will lead to a lien or levy.
What Happens If You Don’t Pay or Respond to a Collections Letter?
If you receive LT11, LT17, or LT19 notices and do not respond or pay, the IRS will pursue more aggressive collections. Actions the IRS can take to collect include:
File Tax Lien
The IRS may file a tax lien against an individual’s or business’s property when the taxpayer fails to contact them or make payment arrangements for tax debt.
Tax liens give the IRS priority over other debts. While liens are not a physical seizure of your assets, you cannot sell any property held by the IRS with a tax lien.
For example, if you owe the IRS $50,000 in back taxes, and the IRS puts a lien on your home, you cannot sell or refinance before your debt is paid in full.
In addition, tax liens are public records. This can make it harder or prevent you from qualifying for a home, car, or personal loan, credit cards, or other items that require good credit.
Garnish Wages
If the IRS garnishes your wages for unpaid taxes, your employer will receive instructions to withhold a specific amount from your paycheck every pay period. How much the IRS takes from wages depends on your dependents and filing status, but it will never be your entire check.
The amount withheld is sent directly to the IRS. Be aware that the IRS does not need to obtain a court order to garnish wages and garnishment continues until the tax debt is paid in full or the collection statute expires.
Levy Bank Accounts, Social Security, and Retirement Income
The IRS will give you 21 days’ notice to pay back taxes before they withdraw funds from your bank account. They are allowed to levy up to the full amount you owe as long as you have enough left for “allowable” monthly expenses.
In addition to bank funds, the IRS can take as much as 15% of Social Security payments and retirement and pension income until the tax debt is paid.
Does the IRS Have a Collections Payment Plan?
When you receive an automated collections letter, whether it is LT11, LT17, or LT19, the IRS encourages you to request a payment plan if you cannot pay.
Plans range from short and long-term monthly installment agreements to Offer in Compromise settlements. The collections payment plan you qualify for depends on how much you owe and how much the IRS can expect to collect.
If the IRS decides you can pay the full amount but need more time, they’ll set up an installment agreement. However, if they determine there is no way you can pay everything, they will likely settle for an “offer” that’s a percentage of what you owe.
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