Letter 11 arrives, and you have not filed one or more years of returns. The balance the IRS is talking about may be large, because for a non-filer the IRS builds the number without your deductions. This page explains what Letter 11 means in that situation, what the IRS can and cannot do, and how Tax Debt Relief Group handles the case on your behalf.
What Letter 11 actually is
Letter 11 (also numbered LT11) is the IRS Notice of Intent to Levy and Notice of Your Right to a Hearing. Under IRC §6331(d) and §6330(a), the IRS must give notice at least 30 days before it levies, and that notice carries your right to a Collection Due Process (CDP) hearing. It can be handed to you, left at your home or business, or sent by certified or registered mail to your last known address (IRM 5.11.1.3.3). The field version of the same notice is Letter 1058 (L1058). If an LT11 is already on the account for the same liabilities, the IRS does not issue an L1058 on top of it (IRM 5.11.1.3.3.1).
The 30 days run from the date of the notice, not from the day you open the envelope. Our first step on any Letter 11 is to put the date on the calendar and confirm exactly which tax years it covers. For the full notice walk-through, see our post on Letter 11 for non-filers.
Why the balance on a non-filer’s account can be so large
When a return is not filed, IRC §6020(b) lets the IRS prepare one for you, a substitute for return (SFR). That return is built from the income reported to the IRS by employers, banks and payers, and it generally leaves out expenses, credits and filing-status choices you were entitled to. The result is usually a bigger tax number than a return prepared properly.
Penalties then pile on. Under IRC §6651(a)(1), failure to file costs 5% of the unpaid tax for each month or part of a month, up to 25%. Failure to pay under §6651(a)(2) and (a)(3) is 0.5% per month, also up to 25%. If the failure to file is fraudulent, §6651(f) raises that to 15% a month and 75%. A return filed more than 60 days late also carries an inflation-adjusted minimum penalty, set in the statute at $435 in its current text. Interest runs on top.
There is no statute of limitations that protects an unfiled year
For a return that was never filed, IRC §6501(c)(3) allows assessment “at any time.” An SFR does not change that: IRC §6501(b)(3) says a return executed by the IRS under §6020(b) does not start the limitations period, and the Tax Court has said the same (Millsap v. Commissioner, 91 T.C. 926 (1988)). The clock that matters for protection starts when a return is actually filed.
The IRS does have an internal enforcement policy of normally pursuing delinquent returns for six years (Policy Statement 5-133, IRM 1.2.1.6.18 and IRM 5.1.11). That is a policy, not a legal limit, and going beyond six years requires managerial approval. We never advise a client to count on it.
What the IRS can do after the 30 days
- Levy without a court order. The IRS levies administratively under IRC §6331. Bank accounts, wages and receivables can all be reached.
- Retirement accounts and Social Security are not exempt. They are absent from the exemptions in IRC §6334(a), and §6334(c) says no other property is exempt. What protects them in practice is IRS discretion under IRM 5.11.6.3, which we address in the case itself.
- Criminal exposure in the right facts. Willful failure to file is a misdemeanor under IRC §7203. Most unfiled-return cases are resolved civilly, but willfulness is a fact question, and it is one reason we handle the IRS contact for you rather than leaving you to explain yourself to a revenue officer.
The hearing right is the lever
A timely CDP request suspends levy while the hearing and any Tax Court review run, and it suspends the collection statute as well (IRC §6330(e)(1)). You get one hearing per tax period with the IRS Independent Office of Appeals, where collection alternatives can be proposed. If you miss the 30 days, you can still ask for an equivalent hearing within one year of the notice date under Treas. Reg. §301.6330-1(i), although the levy suspension does not apply. A hearing decision can be taken to Tax Court within 30 days (§6330(d)).
Disputing the tax itself in a CDP hearing is limited. Under §6330(c)(2)(B) and the regulation, you can challenge the amount only if you did not receive a notice of deficiency or otherwise have an earlier opportunity to dispute it. This is why the better time to fix an inflated SFR number is by filing the real returns, which we cover below.
Some levies carry no pre-levy hearing: jeopardy levies, state income tax refund levies, disqualified employment tax levies and federal contractor levies (IRC §6330(f)). In those cases the hearing comes after the levy.
How Tax Debt Relief Group handles a Letter 11 on unfiled returns
Peter Kici, EA, is an Enrolled Agent, authorized to represent taxpayers before the IRS. Our work on these cases follows a set order:
- Authorization and transcripts. With a signed power of attorney we pull your account and wage and income transcripts to see exactly which years are open and what the IRS has assessed.
- Protect the hearing deadline. We calendar the 30 days and file the CDP request when the facts support it, so levy is held while the case is worked.
- Prepare the missing returns. Real returns with your actual deductions can replace SFR numbers. This is the single biggest thing that changes the balance, and it is also what puts the IRS limitations clock to work for you.
- Get you compliant. The IRS will not agree to most collection alternatives while required returns are unfiled. For example, IRM 5.8.3.8(5) directs the IRS to return an offer in compromise where the six-year look-back returns are not filed.
- Resolve what is owed. Depending on your finances, that may be an installment agreement, an offer in compromise, or currently not collectible status. A pending installment agreement or offer also bars levy under IRC §6331(k), and a levy can be released for economic hardship under §6343(a)(1)(D).
We do the work and speak to the IRS for you. You do not need to call the number on the letter or send documents to the IRS yourself.
Frequently asked questions
Does a large income make Letter 11 more dangerous?
The notice and your hearing rights are the same at any income. A larger income usually means a larger tax and penalty number, and more levy targets, which is why the response deadline matters more.
Can I fix this by just filing the returns?
Filing is necessary, but it does not stop a levy by itself. The 30-day deadline and the collection side still need to be handled while the returns are prepared. We run both together.
What if the letter is old and I missed the 30 days?
Call us right away. An equivalent hearing may still be available within one year of the notice date, and a levy may be released in some situations. Each case turns on the dates.
Get the Letter 11 in front of an Enrolled Agent now
If you have a Letter 11 and unfiled years, the days count from the date on the letter. Request your free consultation and we will review the notice, confirm the deadline, and tell you where the case stands. You can also read our page on non-filer and unfiled tax return help, our levy and bank seizure help, or get the free book.
This article is general information, not a guarantee of any outcome. Every case depends on its own facts and tax years.