What should you do if you received an IRS Letter 11?

The IRS got back into the collections business on 6/15/21 with the release of over 5 million Letter 11s. This is the first significant collections activity in over a year due to the pandemic. Letter 11 is the formal announcement of the IRS’s intent to begin levy actions. This means they will start seizing the bank accounts, investment accounts, and some portion of the debtor’s wages.

The letter gives the taxpayer 30 days from the date of the letter to respond. There are three major options:

    • Set up a payment plan,
    • Making an offer-in-compromise, or
    • Provide proof that they do not have the financial means to make any payments.

What should you do?

If you are a do-it-yourselfer type, then the best action is to go to the irs.gov website and signup for a payment plan. If you cannot qualify for the automatic plan or do not have the cash flow to handle the calculated payment, then bite the bullet and hire someone who has experience with IRS Collections. Proving you are uncollectable or making an Offer-In-Compromise is going to require a lot of financial analysis that is out of the skill range of most individuals.

What should you NOT do?

Ignore them. Nobody likes being ignored and the IRS is no exception. Also, they are not going to accidentally forget about you. Sooner or later, they will begin to seize your cash accounts. Letter 11 is the IRS’s way of suggesting that you come to the table and begin negotiating with them.

If you or someone you know has received a Notice of Intent to Levy or some other federal or state tax issue, please feel free to contact me at either (352) 317-5692 or email jim@taxrepgainesville.com.

Author: Jim Payne

Jim Payne, a Florida Certified Public Accountant (CPA) since 1976, offers candid insights on getting square with the IRS — with the least pain, and at the lowest cost — with (or without) the help of a tax representative. Mr. Payne is a former IRS agent and expert in business profitability, IRS audits, IRS payroll tax, and IRS non-filer issues. As a Tax Representative, his goal is clear: " I will speak on your behalf to all IRS agents, so you never have to, and I'll guide you in executing a strategy to resolve your IRS problem so you can get back to enjoying life."

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