IRS Notices

Key Points Regarding the CP504 Notice

1. Final Notice Before Levy: The IRS is warning that it will take action, including seizing your assets, such as bank accounts, wages, or other property, to satisfy the debt if you do not take action.
2. 30 Days to Respond: The notice typically gives you 30 days to either pay the amount owed or make arrangements (e.g., set up a payment plan or dispute the debt). If you do not respond within that timeframe, the IRS may begin levying your assets.
3. Intent to Seize State Tax Refund: The notice specifically warns that the IRS plans to seize your state tax refund to help satisfy the debt.
4. No Appeal Rights: If you’ve previously received a CP90 or CP91 notice, you generally have no appeal rights left at this point.

What to Do If You Receive a CP504 Notice:

• Pay the Amount Due: If you can afford to, paying the balance in full will stop further action.
• Set Up a Payment Plan: If full payment isn’t possible, consider negotiating a payment plan with the IRS.
• Offer in Compromise: If you cannot afford to pay the full amount, you may apply for an offer in compromise to settle for less than you owe.
• Seek Professional Help: It’s often a good idea to consult a tax professional or attorney to explore your options.

Ignoring a CP504 can lead to serious financial consequences, including liens, wage garnishments, or property seizures.

What the LT11 IRS Notice Means

An LT11 IRS Notice, also known as the “Final Notice of Intent to Levy and Your Right to a Hearing”, is a formal notification from the IRS stating that they intend to seize (levy) your property or assets to collect unpaid taxes. This notice is serious because it indicates that the IRS is moving forward in the collection process, but it also provides you with important appeal rights.

Key Points of the LT11 Notice:

1. Intent to Levy: The IRS is notifying you that they intend to levy (seize) your property or assets, which could include bank accounts, wages, Social Security benefits, or other assets, in order to settle your tax debt.
2. Right to a Hearing: Unlike other notices, the LT11 gives you the opportunity to request a Collection Due Process (CDP) hearing. This is an important right because it allows you to dispute the levy, request alternative payment arrangements, or challenge the underlying tax liability if appropriate.
3. 30-Day Deadline: You have 30 days from the date on the LT11 notice to file a request for a hearing. If you miss this deadline, the IRS can proceed with the levy without further notice.
4. Appeal Opportunities: If you request a CDP hearing within the 30 days, the IRS cannot take levy action until the hearing process is complete. During the hearing, you can negotiate an installment agreement, offer in compromise, or other relief options to avoid the levy.
5. Serious Collection Action: The LT11 is a last step before more severe collection actions, and it follows previous notices about your unpaid taxes (such as a CP504). It means that the IRS is close to enforcing the collection of your debt.

What You Should Do If You Receive an LT11:

• Request a Hearing: If you want to dispute the levy or arrange alternative payment methods, file a request for a Collection Due Process hearing (Form 12153) within 30 days.
• Make Payment Arrangements: If you cannot pay the full balance, consider working with the IRS on a payment plan or offer in compromise.
• Seek Professional Help: It’s advisable to seek the guidance of a tax attorney or a certified tax professional to help navigate the IRS process and explore your options.

Failing to respond to an LT11 notice can lead to serious financial consequences, as the IRS will likely levy your assets.

Key Points of Letter 1058

1. Final Warning Before Levy: This letter informs you that the IRS intends to levy (seize) your property or rights to property unless you take immediate action. This could include garnishing wages, seizing bank accounts, or taking other property.
2. Right to a Collection Due Process (CDP) Hearing: Like with an LT11, the IRS gives you the opportunity to request a CDP hearing within 30 days from the date of the notice. This hearing allows you to dispute the levy or negotiate an alternative payment arrangement before the IRS takes action.
3. 30-Day Response Window: You have 30 days to request a hearing using Form 12153 to dispute the levy, negotiate an installment agreement, or present other options, such as an offer in compromise.
4. Appeal Rights: If you file for a CDP hearing within the 30-day period, the IRS cannot levy your property while the hearing process is underway. If you miss the deadline, you lose your appeal rights, and the IRS may proceed with the levy.
5. What the IRS Can Levy: The IRS may levy bank accounts, wages, Social Security benefits, and other forms of income or property to satisfy the tax debt.

What You Should Do If You Receive Letter 1058:

• Request a CDP Hearing: Filing Form 12153 for a Collection Due Process hearing within the 30-day window is crucial to prevent the IRS from levying your assets.
• Pay or Arrange Payment: If possible, paying the tax debt in full will stop the levy action. Alternatively, you can set up a payment plan, offer in compromise, or other resolution.
• Consult a Tax Professional: It’s highly recommended to seek the assistance of a tax attorney or certified tax professional to explore your options and ensure that you handle the notice correctly.

Failing to respond to a Letter 1058 can result in serious financial consequences, such as the seizure of assets or garnishment of wages.

Key Points of the CP90 Notice

1. Final Notice Before Levy: The IRS is notifying you that they are preparing to levy (seize) your assets to collect the unpaid taxes. This could include seizing funds from your bank account, garnishing your wages, or taking other assets you own.
2. Right to a Collection Due Process (CDP) Hearing: The CP90 gives you the right to request a Collection Due Process (CDP) hearing. This is an important opportunity to dispute the levy, negotiate payment arrangements, or challenge the tax liability. You have 30 days from the date of the notice to request this hearing by filing Form 12153.
3. Types of Property the IRS Can Levy: If you do not respond within the specified time frame, the IRS can seize property such as your wages, bank accounts, Social Security benefits, retirement accounts, and even your home or other personal property.
4. Additional Consequences: The IRS may also file a Notice of Federal Tax Lien, which can affect your credit rating and make it more difficult to sell or refinance your property.

What You Should Do If You Receive a CP90 Notice:

• Request a Hearing: Filing Form 12153 within 30 days ensures that the IRS cannot levy your property until the hearing is complete. This gives you a chance to dispute the levy or negotiate alternative payment methods.
• Pay the Debt or Negotiate: If you can pay the full amount owed, this will stop the levy. Alternatively, you can arrange a payment plan, offer in compromise, or other settlement options.
• Seek Professional Help: It is often a good idea to consult a tax attorney or professional to guide you through the process, especially if the amount owed is significant or you have complex financial circumstances.

Failing to respond to a CP90 notice can result in the IRS levying your property, bank accounts, wages, or other assets to satisfy the tax debt. Taking action promptly is crucial to avoid these severe consequences.

Key Points of the CP91 Notice

1. Final Notice of Intent to Levy Social Security Benefits: The IRS is notifying you that they plan to levy your Social Security payments to collect unpaid taxes. This means that if you do not take action, the IRS can seize up to 15% of your monthly Social Security benefits.
2. 30-Day Response Period: You have 30 days from the date of the notice to respond. During this time, you can pay the amount owed or make alternative arrangements (like a payment plan) to avoid the levy.
3. No Additional Appeal Rights: The CP91 notice does not offer an opportunity for a Collection Due Process (CDP) hearing if you’ve already been notified with earlier notices (such as a CP90 or LT11). At this stage, the IRS has likely exhausted other avenues of communication and is now moving forward with a levy.
4. What Happens After the 30 Days?: If you do not take action within the 30-day window, the IRS will begin seizing a portion of your Social Security benefits until the tax debt is paid off or other arrangements are made.

What You Should Do If You Receive a CP91 Notice:

• Pay the Amount Owed: If possible, paying the full amount will stop the levy and prevent the IRS from taking your Social Security benefits.
• Set Up a Payment Plan: If full payment is not an option, you can contact the IRS to set up an installment agreement or explore an offer in compromise to settle for less than the total owed.
• Seek Professional Assistance: Given the serious nature of this notice, it is often advisable to consult with a tax professional or attorney to explore your options and potentially negotiate with the IRS on your behalf.

Failure to respond to a CP91 notice can result in the IRS garnishing a portion of your Social Security benefits, which can have significant financial consequences, especially for individuals relying on these benefits for their living expenses. Taking prompt action is essential to avoid this levy.

Key Points of the CP92A Notice

1. State Tax Refund Seized: The IRS has applied your state tax refund toward your federal tax debt. The notice outlines the amount that was taken and how it was applied to your federal tax balance.
2. Balance After the Levy: The notice will show how much of the federal tax debt remains after applying your state refund. If the state refund did not cover the full balance, the notice will state how much you still owe.
3. No Additional Appeals: In most cases, a CP92A notice is sent after the taxpayer has been given prior notices, such as a CP504 or other collection-related warnings. By this point, the taxpayer’s rights to appeal the debt may have already expired. However, the notice will include instructions on what to do if you believe the IRS made an error.
4. Payment Options: The CP92A notice will include instructions for settling the remaining balance if the seized state refund does not fully satisfy the debt. You may be able to set up an installment agreement or propose an offer in compromise if you are unable to pay the remaining balance.

What to Do If You Receive a CP92A Notice:

• Review the Notice: Verify that the state refund amount seized by the IRS was applied correctly. Make sure the debt amount listed is accurate.
• Pay the Remaining Balance: If there is still a balance remaining after the levy, consider paying the amount owed to avoid further IRS collection actions.
• Seek Professional Help: If you believe there is an error, or if you cannot afford to pay the remaining balance, consulting a tax professional or attorney can help you navigate the situation and potentially resolve the debt.

Consequences of Inaction:

If you do not respond or take action after receiving a CP92A notice, the IRS may continue to take other collection actions, such as levying your federal refunds, bank accounts, or wages, to satisfy the remaining debt.

This notice is a clear sign that the IRS is actively pursuing your unpaid tax debt and has already started using its levy powers to collect it.

Key Points of the CP92B Notice

1. State Tax Refund Seized for Business Tax Debt: The IRS has intercepted and applied your state tax refund to satisfy an unpaid business tax debt. This could include taxes like payroll taxes, excise taxes, or other business-related taxes.
2. Breakdown of the Seizure: The notice will detail how much of the state tax refund was applied to the business tax debt. If the refund does not fully cover the debt, the notice will also include the remaining balance owed.
3. Remaining Balance: If there is still an unpaid balance after the seizure, the IRS will outline the remaining amount that is still due. The IRS may continue pursuing collection actions if the balance is not paid.
4. No Further Appeals: By the time you receive a CP92B notice, the opportunity to appeal may have passed, as prior notices (such as CP504 or LT11) would have already been issued. However, if you believe there is an error in the amount or the levy, you should contact the IRS or a tax professional to resolve the issue.
5. Payment or Resolution Options: The notice will include information on how to pay the remaining debt. If full payment is not possible, you may explore options like setting up a payment plan or negotiating an offer in compromise to settle for less than the total amount owed.

What to Do If You Receive a CP92B Notice:

• Review the Notice Carefully: Verify the accuracy of the amount seized and the remaining balance. Ensure that the IRS correctly applied the state refund to your business tax debt.
• Pay the Remaining Balance: If you still owe money after the levy, consider paying the balance or contacting the IRS to make arrangements.
• Seek Professional Assistance: If you need help dealing with business tax liabilities, it may be wise to consult a tax professional or attorney to help navigate the situation and avoid further collection actions.

Consequences of Inaction:

Failing to respond to or address a CP92B notice could lead to further collection efforts by the IRS, such as garnishing bank accounts or taking other assets to cover the remaining balance.

A CP92B is a sign that the IRS has already taken steps to collect your business tax debt by intercepting your state tax refund, and ignoring it could lead to more aggressive actions to recover the unpaid taxes.

Key Points of the CP93C Notice

1. Federal Tax Refund Seized: The IRS has applied your federal tax refund to an outstanding business tax debt. This notice will specify how much of the refund was used to satisfy the business tax debt.
2. Details of the Seizure: The notice will include a breakdown of how much of the federal refund was applied to the business tax liability. It may also state whether the seizure fully satisfies the debt or if there is still an outstanding balance.
3. Remaining Balance: If the amount seized from your federal refund does not cover the full debt, the notice will show the remaining balance. The IRS will continue to pursue collection actions to recover the rest of the debt.
4. No Appeal Rights: By the time you receive a CP93C notice, your rights to appeal the tax debt have likely expired. Earlier notices, such as the CP504 or LT11, would have already informed you of your appeal rights. The CP93C notice is primarily informational about the refund levy.
5. Resolution Options: If you still owe a balance, the IRS may provide information on how to pay the remaining amount. You may also be able to explore alternative arrangements such as a payment plan or offer in compromise to settle the remaining tax debt.

What to Do If You Receive a CP93C Notice:

• Review the Notice: Confirm that the IRS has correctly applied your federal refund to the business tax debt and ensure that the amounts listed are accurate.
• Pay the Remaining Balance: If there is still an unpaid balance, it is important to either pay it off or contact the IRS to arrange a payment plan or other resolution.
• Consult a Professional: If you believe there is an error in the notice or are unsure how to handle the remaining debt, it is a good idea to seek help from a tax professional or attorney.

Consequences of Inaction:

If you do not take further steps to address the remaining balance, the IRS may escalate its collection actions, which could include levying other assets such as bank accounts, wages, or property.

The CP93C notice is a clear indication that the IRS is actively collecting business tax liabilities and that further action may be taken if the debt is not fully resolved.

Key Points of the CP2000 Notice

1. Mismatch in Reported Income or Deductions: The IRS is notifying you that the income, deductions, or credits you reported on your tax return do not match the information they received from other sources, such as W-2s, 1099s, or other tax documents. This could result in additional taxes, penalties, or interest.
2. Proposed Changes: The notice outlines the IRS’s proposed adjustments to your tax return based on the information they have. The CP2000 will include a detailed explanation of the changes and how they affect your taxes, including any new amount owed or, in some cases, a refund.
3. Response Options:
   • Agree with the Proposed Changes: If you agree with the IRS’s findings, you can sign and return the response form included with the notice and pay any additional tax due. The notice will provide instructions on how to pay.
   • Disagree with the Proposed Changes: If you disagree with the proposed changes, you must respond within the given timeframe (usually 30 days from the date on the notice) by providing documentation or explanations to support your original tax return. You may be able to explain why the IRS’s information is incorrect or incomplete.
4. Possible Penalties and Interest: The notice may also include penalties and interest if the IRS determines that the underreported income or other discrepancies were significant. Interest will accrue on any unpaid balance.
5. No Immediate Levy or Lien Threat: Unlike other collection notices (such as a CP504 or LT11), a CP2000 is not an immediate notice of intent to levy. However, if the proposed changes result in additional taxes and those taxes are not paid, it could eventually lead to collections and further notices.
6. How to Respond: The CP2000 notice includes a response form where you can indicate whether you agree or disagree with the changes. You need to respond within 30 days to avoid further penalties and interest.

What to Do If You Receive a CP2000 Notice:

• Carefully Review the Notice: Compare the IRS’s proposed changes with your original tax return to see where the discrepancy occurred. The notice will include details on what information the IRS has versus what you reported.
• Gather Supporting Documents: If you disagree with the proposed changes, collect relevant documents (such as W-2s, 1099s, or other records) to support your position.
• Respond Promptly: Whether you agree or disagree with the proposed changes, it’s important to respond to the notice within the timeframe specified (usually 30 days). This will prevent further penalties or collection actions.
• Seek Professional Help: If you are unsure how to respond or need assistance in disputing the notice, consulting a tax professional or accountant can be helpful.

Consequences of Ignoring a CP2000 Notice:

If you do not respond to the notice, the IRS will assume that you agree with their proposed changes and will automatically assess the additional tax liability, along with any applicable penalties and interest. Ignoring the notice can lead to further IRS actions, such as additional penalties, interest, and eventually, collection efforts.

The CP2000 notice is a proposal based on mismatched information, and it gives you an opportunity to resolve discrepancies before the IRS takes more aggressive steps.

Key Points of the CP12 Notice

1. IRS Made a Correction: The IRS has identified an error on your tax return, such as a miscalculation, and corrected it. This can involve changes in your tax credits, deductions, or other parts of your return. The CP12 notice will detail the changes the IRS made.
2. Refund or Reduced Refund: As a result of the correction, you may either:
   • Receive a refund (if you initially owed money or filed with a smaller refund amount).
   • Have a reduced refund if the IRS’s correction decreases the amount you were expecting.

   In some cases, if the error led to you owing money rather than receiving a refund, the IRS will notify you of the new balance due.

3. Reasons for the Adjustment: The CP12 notice will explain what specific error the IRS corrected, such as:
   • A calculation mistake on your tax return.
   • Incorrect credits or deductions claimed.
   • Overstated or understated income.
4. No Action Typically Required: If you agree with the changes the IRS made, you generally don’t need to take any action. The notice will inform you if you are due a refund, and it will be sent within a specified time frame, usually 4 to 6 weeks.
5. Disputing the Changes: If you disagree with the IRS’s correction, you can contact the IRS within 60 days of receiving the notice. The CP12 will include instructions on how to dispute the changes, and you may need to provide additional documentation to support your claim.
6. Possible Delays in Refunds: If you were expecting a refund and the IRS made changes, it might delay the timing of your refund. The notice will provide an estimated timeframe for when you will receive your corrected refund, usually 4 to 6 weeks.

What to Do If You Receive a CP12 Notice:

• Review the Notice: Carefully read through the changes the IRS made and compare them with your original tax return. Make sure the IRS’s explanation of the correction matches the details on your return.
• No Action Needed If You Agree: If you agree with the IRS’s correction, no further action is required on your part. If a refund is due, you’ll receive it automatically within the specified timeframe.
• Dispute the Correction If You Disagree: If you believe the IRS made an error, follow the instructions on the notice to dispute the changes within 60 days. Provide any documentation or records that support your original filing.

Consequences of Ignoring the Notice:

If you disagree with the adjustment and do not respond within the 60-day window, the IRS will assume that you accept their correction, and the changes will stand.

A CP12 notice is relatively routine and is issued when the IRS makes minor adjustments to your tax return. If you agree with the changes, no further action is needed, but if you disagree, it’s important to act within the 60-day timeframe to dispute the correction.

Key Points of the CP14 Notice

1. You Owe Taxes: The CP14 notice informs you that you have a balance due on your taxes. This can happen for several reasons, such as underpaying when you filed, not paying enough estimated taxes, or discrepancies in what you reported.
2. Details of the Amount Owed: The notice will show a breakdown of the amount you owe, including:
   • The tax amount due.
   • Any penalties for late payment or underpayment.
   • Interest that has accrued on the unpaid balance.
3. Payment Due Date: The notice will specify a due date by which you must pay the balance to avoid additional penalties and interest. The IRS typically gives you 21 days to make payment in full before they take further action.
4. Payment Options: The CP14 will include instructions on how to pay the amount due. You can pay the balance in full, or if you cannot pay the full amount, you may explore payment plan options, such as an installment agreement.
5. Penalties and Interest: If the amount is not paid by the due date, additional penalties and interest will accrue, increasing the amount you owe. It’s important to resolve the balance quickly to avoid further penalties.
6. No Appeal Rights: A CP14 notice does not come with any appeal rights because it’s simply a notification that taxes are due. However, if you believe the notice is incorrect, you can contact the IRS to resolve the issue.

What to Do If You Receive a CP14 Notice:

• Review the Notice: Make sure the amount the IRS says you owe is accurate by comparing it with your own records and tax return.
• Pay the Amount Owed: If you agree with the IRS’s calculations, pay the balance by the due date to avoid further penalties and interest.
• Set Up a Payment Plan: If you cannot pay the full balance by the due date, you can contact the IRS to request a payment plan or installment agreement.
• Dispute If Incorrect: If you believe the amount is incorrect, contact the IRS within the timeframe indicated on the notice (typically 60 days) to resolve the discrepancy. Be prepared to provide documentation to support your case.

Consequences of Ignoring the CP14 Notice:

If you do not address the notice, here are the potential consequences:

• Accruing Interest and Penalties: The longer the balance remains unpaid, the more interest and penalties will accrue.
• IRS Collection Actions: If you continue to ignore the notice, the IRS may take more aggressive collection actions, such as sending additional notices (like a CP504) or even issuing a levy on your assets.

A CP14 notice is an initial warning that taxes are due. While it is not as severe as later IRS notices, it’s important to address it promptly to avoid further penalties and collection actions.

Key Points of the 9297 IRS Notice

1. Request for Additional Documentation: The IRS is asking for specific records or documents related to your tax return. This could be in connection with an ongoing audit or another tax-related issue. The notice will specify the exact information or documents needed.
2. 30-Day Response Window: You typically have 30 days to respond to the notice. If you fail to provide the requested information within this time frame, the IRS may proceed with its audit or make adjustments to your tax return without your input, which could result in additional taxes, penalties, or interest.
3. IRS Contact Information: The notice will include contact information for the IRS agent or office handling your case. You can use this contact information to ask questions or request clarification on the documentation they need.
4. What Happens If You Don’t Respond: Failing to respond within the deadline could result in the IRS making decisions or adjustments to your tax return based on the information they currently have, which may not be in your favor. This could lead to an increased tax bill, penalties, or further enforcement actions.

What to Do If You Receive a 9297 Notice:

• Review the Notice Carefully: Pay close attention to the specific documents or information the IRS is requesting.
• Gather and Submit the Requested Information: Collect the requested documentation and submit it to the IRS within the 30-day window. Be sure to send all information as outlined in the notice to avoid delays or further issues.
• Contact the IRS for Clarification: If you’re unsure what the IRS is asking for, or if you need more time, contact the IRS agent listed on the notice to clarify the request or ask for an extension if necessary.
• Seek Professional Assistance: If you are involved in a complex audit or need help gathering and submitting the necessary information, it’s a good idea to consult a tax professional or attorney.

Consequences of Ignoring a 9297 Notice:

• Increased Taxes, Penalties, or Interest: If you do not provide the requested information, the IRS may make unfavorable decisions, resulting in additional taxes, penalties, or interest.
• Escalation of Collection Actions: If the audit or issue is not resolved, the IRS may take further steps to enforce tax collection, such as issuing additional notices, levies, or liens.

The 9297 notice is part of the IRS’s effort to resolve a tax issue, and responding promptly with the requested information is crucial to avoiding further complications or penalties.

Key Points of an FTB Garnishment

1. What Triggers an FTB Garnishment:
   • The FTB typically begins garnishment after sending multiple notices about a tax debt or other financial obligation owed to the state of California. If you fail to respond to these notices or arrange for payment, the FTB can proceed with a garnishment.
   • Garnishment can apply to unpaid state income taxes, unpaid court fines, child support, or other financial obligations owed to the state.
2. Types of Garnishments:
   • Wage Garnishment: The FTB can direct your employer to withhold a portion of your paycheck to satisfy the tax debt. The amount garnished is typically a percentage of your disposable income, leaving you with a reduced paycheck.
   • Bank Account Levy: The FTB can place a levy on your bank account, freezing funds and allowing the FTB to withdraw money directly to pay off your debt.
3. Notice Before Garnishment:
   • Before a garnishment, the FTB usually sends a Notice of Intent to Levy or similar warnings, giving you an opportunity to resolve the debt before garnishment begins. Ignoring these notices can lead to enforced collection actions like garnishment.
4. Limits on Wage Garnishment:
   • California law restricts the amount the FTB can garnish from wages. Typically, the garnishment is limited to 25% of your disposable earnings or the amount by which your weekly wages exceed 40 times the state’s minimum wage, whichever is less.
5. Bank Levy Process:
   • When the FTB levies your bank account, your financial institution is required to hold the funds for a period (usually 10 days) before transferring them to the FTB. This gives you a short window of time to resolve the matter or make arrangements with the FTB.
6. Stopping or Avoiding Garnishment:
   • Payment in Full: Paying the debt in full will stop the garnishment.
   • Payment Plan: Setting up a payment plan with the FTB can help stop further garnishments if they agree to terms.
   • Financial Hardship: If the garnishment causes extreme financial hardship, you may be able to contact the FTB to negotiate lower payments or temporary relief.
   • Offer in Compromise: In some cases, you may be able to settle the debt for less than the full amount owed through an Offer in Compromise.

What to Do If You Receive an FTB Garnishment:

• Review the Notice: Pay close attention to any notices or letters you receive from the FTB regarding the garnishment. These notices will explain the amount owed and the garnishment process.
• Contact the FTB: If you cannot afford the garnishment or believe the garnishment is in error, contact the FTB immediately to discuss your options. In some cases, they may be willing to work with you to arrange alternative payment terms.
• Seek Professional Help: If you’re unsure how to handle an FTB garnishment or need help negotiating with the FTB, consider consulting a tax professional or attorney.

Consequences of Ignoring an FTB Garnishment:

• Continued Garnishment: If you do not address the garnishment, it will continue until the full debt is paid.
• Additional Fees or Interest: The longer the debt remains unpaid, the more interest and fees may accumulate, increasing the overall amount owed.

An FTB garnishment is a serious action taken to collect unpaid state debts, and it’s important to address it as soon as possible to avoid ongoing financial difficulties.

Key Points of the LT38 Notice

1. Enforced Collection Action Warning: The LT38 notice warns the taxpayer that the IRS is preparing to or has already begun enforcement actions, such as levies or liens, to collect unpaid tax liabilities. This is typically in cases where the taxpayer has ignored previous notices or failed to resolve their debt.
2. Unpaid Payroll or Employment Taxes: The LT38 is often related to unpaid employment or payroll taxes, such as Trust Fund Recovery Penalty (TFRP) cases. These involve situations where an employer has withheld payroll taxes from employees but failed to remit them to the IRS.
3. Revenue Officer Involvement: The LT38 notice is often issued by a Revenue Officer who has been assigned to your case. Revenue Officers are IRS employees responsible for collecting delinquent taxes, and receiving this notice usually means that they are pursuing enforced collection actions.
4. Response Required: The notice typically includes a timeframe for the taxpayer to respond, either by paying the debt or contacting the Revenue Officer to make arrangements. Ignoring this notice can result in immediate levies, garnishments, or seizures of assets.
5. Consequences of Inaction: If you do not respond or take action, the IRS can:
   • Levy bank accounts or wages.
   • File a federal tax lien against your property, affecting your credit.
   • Seize business or personal assets to satisfy the debt.
   • Pursue penalties, including the Trust Fund Recovery Penalty (TFRP), for responsible individuals in cases involving payroll taxes.
6. Potential for Criminal Investigation: While this is rare, if the unpaid taxes involve intentional fraud or tax evasion, the IRS could escalate the situation to a criminal investigation.

What to Do If You Receive an LT38 Notice:

• Contact the Revenue Officer: The notice will include contact information for the Revenue Officer assigned to your case. It is essential to contact them immediately to discuss your options and potentially avoid enforced collection actions.
• Set Up a Payment Plan: If you cannot pay the full balance, you may be able to negotiate a payment plan or an installment agreement with the IRS.
• Dispute the Amount: If you believe the tax amount is incorrect, you can provide documentation or proof to dispute the debt or negotiate the terms.
• Seek Professional Help: Consulting with a tax attorney or tax professional who has experience dealing with IRS Revenue Officers can help you negotiate better terms or find a resolution.

Consequences of Ignoring the LT38 Notice:

• Asset Seizure: The IRS can seize property, including bank accounts, wages, and business assets, to satisfy the tax debt.
• Tax Liens: The IRS can file a federal tax lien, which impacts your credit score and ability to sell property.
• Escalation of Collection Actions: The longer you ignore the notice, the more aggressive the IRS will become in collecting the debt, possibly leading to criminal charges in cases of fraud or evasion.

The LT38 notice is a serious indication that the IRS is moving forward with enforced collection actions. It’s crucial to respond quickly to avoid severe financial consequences.