IRS & Tax Debt

The IRS doesn’t sue you over back taxes — it sends letters, and the letters escalate. If you owe after filing, you’ll get a CP14 first (just a balance due), then a string of reminders, then a CP504 warning them they can start seizing your state refund and other property. The one that actually matters most is the last one: an LT11 or Letter 1058, the “Final Notice of Intent to Levy.” That one starts a 30-day countdown, and it comes with the right to request a hearing before anything gets taken.

Each of these letters carries different rights, and it’s worth knowing where you stand. A CP504 sounds alarming, but it isn’t yet the notice that lets them touch your wages or bank account — legally, that requires the LT11 or Letter 1058 first. The earlier you respond, the more doors stay open: setting up an installment plan, getting classified as temporarily uncollectible, or negotiating an Offer in Compromise. Wait until the levy notice shows up, and a lot of those options get harder to use.

Here’s what makes IRS debt different from basically every other kind: they don’t need to win a lawsuit to come after you. Garnishing wages, levying a bank account, filing a lien against your property — the tax code gives them that power directly, no judge required. That’s exactly why responding to the early letters is worth more here than it might feel like it’s worth. There’s no lawsuit stage slowing things down to buy you time.