Understanding the IRS Letter 1058 – Final Notice prior to levy; your right to a hearing

An IRS Notice LT1058 means the IRS is planning to take action to levy (seize) your assets to collect a tax debt. This notice is your final warning and gives you the right to request a hearing to contest or stop the levy.  If no action is taken or if action is taken but it is unsuccessful, the IRS states that it will move forward with enforcement actions by seizing bank accounts, garnishing paychecks, and levying other property as well.

The IRS issues Letter 1058 as written notification from your revenue officer or area office (required under IRC sections 6330 and 6331) informing you the IRS intends to place a levy on your property or rights to property 30 days from the date of the letter. It is similar in threat level to the “IRS LT11 Final Notice Prior to Levy; Your Right to a Hearing” however the Letter 1058 is issued by the IRS Revenue Officer who is assigned to your case.

There are a few common causes for receiving an IRS Letter1058 notice:

1. You owe taxes: If you filed a tax return with a balance due or the IRS prepared a return on your behalf with a balance due, you may receive an LT1058 notice.
2. You have not addressed an unpaid balance: If you received balance-due notices (CP14, CP501 and CP503) and a collection notice (CP504) requesting payment, but you did not pay the balance or make arrangements to do so, you may receive an LT1058 notice.
3. You have not made payment or contacted the IRS to set up a payment agreement: The IRS is required to send a notice of intent to levy before it can levy your assets. If you have not submitted payment or contacted the IRS to set up a payment agreement, you may receive an LT1058 notice.
4. The IRS plans to levy your assets: The IRS may levy your wages, bank accounts, state income tax refunds, payments from clients, and other assets that you own or have a right to if you do not pay your tax debt in full or make arrangements to do so within 30 days from the date on the notice. The LT1058 notice also informs you of your Collection Due Process appeal rights.
5. You did not respond to previous balance-due notices: If the IRS sent you a balance-due notice (CP14) and reminder notices (CP501, CP503, CP504), but you did not pay the balance or respond to the notices, the IRS may proceed with enforced collection (issuing levies and filing a lien) after 30 days from the date on the notice.
6. You did not receive prior balance-due notices: If the IRS sent you balance-due notices and reminder notices, but you did not receive them, the IRS may still proceed with enforced collection if you do not respond within 30 days from the date on the notice. This is because the notices were sent to your last known address.
7. The IRS posted your payment to the wrong tax account or tax period: If you submitted a payment after receiving a reminder notice (CP504), but the IRS posted the payment to the wrong tax account or tax period, you may receive an LT1058 notice. This is because the IRS shows no payment received for the tax period in question, and they may proceed with enforced collection action.

Resolving the IRS issue related to an IRS Letter1058 notice:

It is important to take an IRS Letter 1058 notice seriously and consider your options carefully. A levy can be financially devastating on your finances–impeding your ability to pay bills and loan payments.  Action must be taken quickly to avoid this outcome. Cooperation with the taxpayer and communication with the IRS revenue officer is required for any negotiation to be successful.

If you have received an IRS Letter 1058, you should call us immediately for a free, confidential consultation at (214) 214-3000 or toll free at (833) IRS-PROB.