Quick overview

An IRS “final notice” — typically labeled a Final Notice of Intent to Levy (examples include CP504 or Letter 1058/LT11) — is the last formal warning the IRS issues before it can seize assets to satisfy a tax debt. The notice starts a critical clock: in most cases you have 30 days from the date on the notice to request a Collection Due Process (CDP) hearing or otherwise resolve the balance. If you fail to act, the IRS can file a Notice of Federal Tax Lien and levy (seize) wages, bank accounts, business accounts, and certain other assets. (IRS — Collection Process and Notice pages.)

This article explains the sequence of events, practical responses to stop or limit enforcement, exceptions and special rules, and common mistakes I’ve seen working with taxpayers for 15+ years.

Typical timeline after a final notice

  • Preliminary notices: The IRS usually sends one or more earlier notices (CP14, CP501, CP503, or similar) alerting you about overdue tax before a final notice arrives. These give time to pay or contact the IRS.

  • Final notice issued (Day 0): The agency mails the Final Notice of Intent to Levy. It will include the amount owed, how it was calculated, and a statement about your right to request a hearing. The document commonly appears as CP504 or Letter 1058 (LT11), depending on the office and case.

  • 30‑day window (Days 0–30): You generally have 30 days to request a Collection Due Process (CDP) hearing or otherwise respond (pay, arrange a plan, file an appeal). Requesting CDP halts most enforced collection actions while the appeal is pending. See IRS guidance on Collection Due Process rights for details.

  • Post‑30 days (Day 31 onward): If you do not request CDP or arrange a solution, the IRS can move forward with enforcement: file a Notice of Federal Tax Lien in public records and impose levies on bank accounts, wages, business accounts, and other nonexempt assets. The timing and order of enforcement vary by case and IRS workload.

  • Collection continues (months to years): The IRS generally has 10 years from the date of assessment to collect (the collection statute expiration date). During that period the agency can continue using collection tools until the debt is paid, released, or otherwise resolved.

(Authoritative: IRS Collection Process; IRS Notice of Intent to Levy pages.)

Common consequences explained

  • Federal tax lien: A Notice of Federal Tax Lien publicly records the government’s legal claim to your current and future property. It can damage credit reports and complicate property sales or refinancing.

  • Wage garnishment / payroll levy: The IRS can instruct employers to withhold a portion of your wages and forward them to the IRS until the debt is satisfied or an agreement is made.

  • Bank account levy: The IRS can direct a bank to turn over funds in accounts owned by the taxpayer. Banks typically freeze the account for 21 days (federal law gives you a short window to claim exemptions) before releasing funds to the IRS.

  • Levies on business property and accounts: Business owners can have operating accounts levied, which can interrupt payroll or vendor payments and threaten business continuity.

  • Seizure of assets and sale: In extreme cases the IRS can seize and sell nonexempt property to satisfy the tax debt, after additional procedural steps and public sale rules.

  • Penalties and interest: Interest and late payment penalties continue to accrue until the debt is paid in full or resolved through an alternative collection method.

Immediate steps to take after you receive a final notice

  1. Confirm the notice is legitimate. IRS letters will show your taxpayer identifying information and a contact phone number. Scams exist; if in doubt, call the IRS directly at the number on IRS.gov. Do not rely only on contact details provided in the letter if you suspect fraud. (IRS — How to identify IRS contacts.)

  2. Read the notice carefully for the date, amount, and deadline to request a hearing. The notice explains how to request a Collection Due Process hearing — usually by sending a timely written request or using the address on the letter.

  3. If you can pay immediately, do so. Payment in full stops further enforcement. If you pay electronically or by check, confirm receipt with the IRS.

  4. If you cannot pay in full, request a CDP hearing within 30 days to stop most levy actions while your case is reviewed, or contact the IRS to propose an alternative such as an installment agreement or Offer in Compromise.

  5. Consider temporary holds and exemptions. If the levy threatens essential living expenses, ask the IRS to release the levy for economic hardship or request enforcement relief while you pursue a solution.

  6. Get professional help. A CPA, enrolled agent, or tax attorney can prepare appeals, financial statements, and collection alternatives — especially important when the IRS is close to or has already started seizing assets.

If a levy is already in process, follow steps in guides like “How to Stop an IRS Levy: Immediate Steps to Take” to act quickly. (See interlinked guidance below.)

Options to stop or limit enforcement

  • Pay in full: Simplest cure if funds are available.

  • Installment agreement: An arranged payment plan prevents levy if approved and maintained. To explore installment plans, see how to apply for an online installment agreement and other installment-related content on our site. Set up an installment agreement can be faster for smaller balances.

  • Offer in Compromise (OIC): If you can convincingly show that you cannot pay the full amount, the IRS may accept a reduced lump sum or payment plan under an OIC. OIC applications require full financial disclosure and can take months to process. See our internal resource: Offers in Compromise: Eligibility and the Application Process for practical tips.

  • Currently Not Collectible (CNC): If your income and necessary living expenses leave no reasonable ability to pay, the IRS may place your account in currently not collectible status, halting levies temporarily. Interest and penalties, however, continue to add up, and the IRS can re‑evaluate your status.

  • Request levy release for hardship or error: The IRS can release or withdraw a levy if it caused financial hardship or was issued in error. Guidance on stopping levies and requesting release is available in our step‑by‑step articles, such as How to Stop an IRS Levy: Immediate Steps to Take.

Exceptions and special rules

  • Jeopardy levies and immediate actions: In rare situations where the IRS believes collection is in jeopardy (e.g., you attempt to move assets out of reach), the agency can seize assets immediately without the normal 30‑day notice.

  • Trust fund and employment taxes: Unpaid trust fund taxes (e.g., payroll taxes withheld from employees) are treated more aggressively; responsible persons can be personally assessed and pursued.

  • Collection statute: The IRS generally has ten years from the date of assessment to collect an unpaid tax (the collection statute expiration date). Certain actions (bankruptcy, collection due process appeals, or taxpayer requests for installment agreements) can pause (suspend) that period.

Real-world examples and professional insight

In my practice I’ve seen two common patterns:

  • Early contact prevents levies: Taxpayers who call the IRS, document conversations, and submit financial information often preserve the option to set up installment agreements and avoid bank levies.

  • Ignoring notices magnifies consequences: A taxpayer who ignored earlier notices received a final notice and then a bank levy. Getting funds returned or obtaining a rapid release required a written hardship request, proof of exempt funds, and escalation to the IRS Collection Manager — a process that consumed weeks and, in some cases, required emergency payroll loans to meet obligations.

If you are facing an imminent levy, time matters. Acting within days — not weeks — can be the difference between preserving essential accounts and immediate loss of access to cash.

Common mistakes to avoid

  • Waiting until the 30th day to act: Don’t assume the 30‑day window means you can safely wait. Start the appeal or payment discussion immediately.

  • Relying on verbal promises: Always get confirmations in writing. If the IRS agrees to a temporary hold or installment plan, request written confirmation.

  • Ignoring exemptions: Certain funds (e.g., Social Security benefits in many cases, certain retirement accounts) are partially or fully exempt. Understand exemption rules before assuming funds are unprotected.

Bottom line

A Final Notice of Intent to Levy signals an urgent need for action. In most cases you have 30 days to request an administrative hearing and avoid enforced collection. If you can’t pay in full, explore installment agreements, Offers in Compromise, or currently not collectible status — and get professional help when needed. Acting quickly and with accurate documentation is the most reliable way to prevent or limit the financial harm a levy can cause.

Disclaimer: This article is educational and does not constitute tax, legal or financial advice. For guidance tailored to your situation, consult a qualified tax professional, enrolled agent, CPA, or tax attorney.

Sources

  • IRS, “The Collection Process” and “Notice of Intent to Levy” pages (irs.gov/collections; irs.gov/levy).
  • IRS, “Collection Due Process (CDP)” rights (irs.gov).
  • U.S. Bankruptcy & Courts: taxpayer rights materials.

Further reading on FinHelp