Problem Statement:
If you’ve received IRS Letter 1058, things are getting serious. This letter is an official “Final Notice of Intent to Levy” and your last chance to resolve your tax debt. The IRS will take drastic collection actions like levying your wages or bank accounts. It’s essential to understand what this notice means and what steps you can take to avoid losing your assets.
What is IRS Letter 1058?
IRS Letter 1058 is a formal notice that the IRS intends to levy (seize) your property or rights to property. This letter is not just a warning—it’s the final notice. The IRS can/will legally start seizing your assets to collect the unpaid taxes. The letter states that the IRS can and will file a federal tax lien against your property. This in turn make it difficult to sell or refinance any assets.
This letter is typically sent after the IRS has sent earlier notices. You received the CP14, CP503, and CP504 informing you of the outstanding tax debt. You ignored or failed to address these previous notices. Letter 1058 is your last chance to act before the IRS takes more aggressive measures.
Why Did You Receive IRS Letter 1058?
The IRS sends this letter when you have an unpaid tax balance. You haven’t responded to earlier notices requesting payment. It’s a final step in their collection process before they can legally levy your wages, bank accounts, or other assets. At this point, the IRS is letting you know that they are prepared to take collection actions unless you take immediate steps to resolve the debt.
Steps to Take After Receiving IRS Letter 1058:
- Review the Notice Carefully
The first thing you should do is read the letter thoroughly. Check the tax amount the IRS says you owe and compare it to your records. Sometimes errors happen, and if you believe there is a mistake, you need to contact the IRS or a tax professional right away to dispute the amount. - Request a Collection Due Process (CDP) Hearing
IRS Letter 1058 gives you the right to request a Collection Due Process (CDP) hearing within 30 days of the date on the letter. This is an essential step because it temporarily halts any levy actions while your case is being reviewed. A CDP hearing allows you to dispute the tax debt, propose alternative solutions (like an installment agreement), or challenge the levy itself. Filing for this hearing is critical if you disagree with the debt or need time to work out a payment plan. - Pay the Amount Owed or Set Up a Payment Plan
If you agree with the tax debt and can pay the full amount, doing so will stop the IRS from proceeding with the levy. If you can’t pay the full amount, the IRS offers several payment options, including an installment agreement that allows you to pay off the debt in monthly payments. - Consider an Offer in Compromise
If paying the full tax debt is beyond your financial means, you may qualify for an Offer in Compromise (OIC), which allows you to settle your tax debt for less than the full amount owed. To qualify, you must prove that paying the full debt would create a significant financial hardship. Keep in mind that the IRS will evaluate your income, assets, and expenses before agreeing to any settlement. - Act Before the Deadline
The IRS gives you a 30-day window from the date of the letter to request a CDP hearing or resolve the debt. If you fail to respond within that timeframe, the IRS can move forward with levying your assets, such as garnishing your wages or taking money from your bank accounts. Don’t wait until it’s too late—act as soon as you receive the notice.
What Happens If You Ignore IRS Letter 1058?
Ignoring this notice will almost certainly result in the IRS taking aggressive collection actions. This could include levying your bank accounts, garnishing your wages, or even seizing property. Additionally, the IRS may file a federal tax lien, which could harm your credit score and make it difficult to borrow money, sell property, or get approved for future loans.
Conclusion:
Receiving IRS Letter 1058 is a serious matter. It’s the final notice before the IRS takes legal action to levy your assets. However, you still have options to avoid a levy, such as requesting a CDP hearing, paying the full amount, or setting up a payment plan. The most important thing is to act quickly. If you’re unsure about your next steps or need assistance negotiating with the IRS, consider reaching out to a tax professional. Taking swift action can help you protect your assets and resolve your tax debt before it escalates further.
