IRS Notice 1058 — Final Notice of Intent to Levy

What is IRS Notice 1058?

IRS Notice 1058 is a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. It is one of the most serious notices the IRS sends — it is the last warning before the IRS can legally seize (levy) a taxpayer's wages, bank accounts, Social Security benefits, retirement accounts, and other assets. Upon receiving Notice 1058, the taxpayer has 30 days to request a Collection Due Process (CDP) hearing before the IRS Office of Appeals.

Critical timing: The 30-day deadline is absolute. Missing it eliminates the taxpayer's right to a CDP hearing and removes the most powerful tool for stopping a levy. Practitioners must treat Notice 1058 as a time-sensitive emergency.

What Triggers Notice 1058?

Notice 1058 is issued after the IRS has completed the statutory notice sequence required before levying. The sequence is:

1. CP14 — Initial balance due notice
2. CP501/CP503 — Reminder notices (2nd and 3rd notices)
3. CP504 — Final notice before levy (state refund levy only)
4. LT11 / Notice 1058 — Final Notice of Intent to Levy (triggers CDP rights)

Notice 1058 and LT11 are functionally equivalent — both trigger CDP rights. The difference is that Notice 1058 is typically issued by the Automated Collection System (ACS) while LT11 is issued by a Revenue Officer.

CDP Hearing — Your Client's Most Important Right

A Collection Due Process (CDP) hearing under IRC §6330 is the taxpayer's right to challenge the levy before an independent IRS Appeals Officer. During a CDP hearing, the taxpayer can:

• Challenge the appropriateness of the levy (collection alternatives)
• Propose an installment agreement or Currently Not Collectible (CNC) status
• Submit an Offer in Compromise
• Challenge the underlying tax liability if it was never previously contested
• Raise innocent spouse claims
• Challenge procedural errors in the IRS's collection process

How to request a CDP hearing: File Form 12153 (Request for a Collection Due Process or Equivalent Hearing) within 30 days of the Notice 1058 date. Mail it to the address on the notice via certified mail. Keep the certified mail receipt as proof of timely filing.

What Happens If You Miss the 30-Day Deadline?

Missing the CDP deadline does not eliminate all options, but it significantly weakens the taxpayer's position:

• The taxpayer can request an Equivalent Hearing within one year of Notice 1058, but this does not suspend levy action and cannot be appealed to Tax Court
• The IRS can proceed with levy action immediately after the 30-day window closes
• The taxpayer can still request collection alternatives (installment agreement, OIC, CNC) but loses the independent Appeals review right

Immediate Action Checklist for Practitioners

1. Verify the notice date and calculate the exact 30-day deadline (count from the notice date, not the date received)
2. Pull IRS transcripts (IDRS or IRS.gov) to understand the full balance, tax periods, and prior notices
3. Determine the best collection alternative: installment agreement, OIC, CNC, or penalty abatement
4. File Form 12153 via certified mail before the deadline — even if the collection alternative is not yet fully prepared
5. Prepare Form 433-A (Collection Information Statement for individuals) or Form 433-B (for businesses)
6. Contact the IRS ACS or Revenue Officer to discuss collection alternatives while CDP is pending

Collection Alternatives Available After Notice 1058

Levyable Assets — What the IRS Can Seize

After Notice 1058 and the expiration of the CDP period, the IRS can levy virtually any asset:

• Bank accounts (immediate freeze and seizure)
• Wages (continuous levy — 15% of Social Security, up to 70% of wages)
• Accounts receivable (for business owners)
• Retirement accounts (IRA, 401(k) — with 10% early withdrawal penalty waived for levy)
• Real estate (requires court order for primary residence)
• Business assets (inventory, equipment, receivables)

What is IRS Notice 1058?

IRS Notice 1058 is a Final Notice — Notice of Intent to Levy and Your Right to a Hearing. It is functionally identical to the CP90 and LT11 — all three are "Final Notice of Intent to Levy" notices that trigger Collection Due Process (CDP) rights under §6330. Notice 1058 is typically sent to businesses and some individuals, while CP90 and LT11 are more commonly sent to individual taxpayers.

Upon receiving Notice 1058, the taxpayer has 30 days to request a CDP hearing by filing Form 12153. If no hearing is requested, the IRS can proceed with levy action — seizing business bank accounts, accounts receivable, equipment, and other business assets.

Notice 1058 and Business Levies

Notice 1058 is particularly serious for business owners because the IRS can levy:

• Business bank accounts: The IRS can issue a bank levy, freezing and seizing funds in business checking and savings accounts
• Accounts receivable: The IRS can issue a "continuous levy" on accounts receivable — requiring customers to pay the IRS directly instead of the business
• Business equipment and inventory: The IRS can seize and sell business assets (though this is rare for operating businesses)
• Federal contractor payments: The IRS can levy up to 100% of payments from federal contracts

A business bank levy can be devastating — it can prevent the business from meeting payroll, paying suppliers, and continuing operations. The CDP hearing request (Form 12153) stops all levy action immediately and is the most important first step.

Trust Fund Recovery Penalty Connection

Notice 1058 is often associated with employment tax liabilities, particularly the Trust Fund Recovery Penalty (TFRP) under §6672. The TFRP is assessed against "responsible persons" (officers, owners, bookkeepers) who willfully failed to collect and remit payroll taxes. The TFRP equals 100% of the unpaid trust fund taxes (employee income tax withholding + employee FICA).

If Notice 1058 relates to a TFRP assessment, the CDP hearing is particularly important — it may be the last opportunity to challenge the TFRP assessment before the IRS proceeds with collection against the responsible person's personal assets.

Responding to Notice 1058

The response strategy for Notice 1058 is identical to CP90:

1. File Form 12153 immediately — within 30 days of the notice date
2. Pull IRS transcripts — verify the balance and check for CSED (Collection Statute Expiration Date) issues
3. Determine the best collection alternative — installment agreement, OIC, CNC, or penalty abatement
4. File Form 2848 (Power of Attorney) to represent the client
5. Prepare financial disclosure (Form 433-B for businesses) if a collection alternative requires it

Collection Statute Expiration Date (CSED)

The IRS generally has 10 years from the date of assessment to collect a tax liability (§6502). This is the Collection Statute Expiration Date (CSED). When a Notice 1058 is received, practitioners should check the CSED — if the liability is close to expiring, a "wait and see" strategy (requesting CNC status or filing a CDP hearing to delay collection) may be appropriate. The CSED is suspended during CDP hearings, OIC consideration, and certain other events.

IRS Notice 1058: Final Notice Before Levy — Complete Response Guide

IRS Notice 1058 is functionally equivalent to CP90 — it is a Final Notice of Intent to Levy and Notice of Your Right to a Hearing. The difference is that CP90 is typically sent for individual taxpayers while Notice 1058 is used for business taxpayers and in certain other contexts. Both notices trigger the same 30-day Collection Due Process (CDP) hearing right under IRC §6330.

Notice 1058 vs. CP90: Key Differences

While both notices serve the same legal function, practitioners should understand the context in which each is issued. Notice 1058 is commonly sent to: (1) Business entities (corporations, partnerships, LLCs) with unpaid employment taxes (Form 941 liabilities) or income taxes. (2) Individual taxpayers in certain ACS (Automated Collection System) cases. (3) Taxpayers who have had prior collection activity and are receiving a final warning before a new round of levies.

The response strategy is identical to CP90: file Form 12153 within 30 days, pull the IRS transcript, and prepare a collection alternative proposal. The same CDP hearing rights, collection alternatives (installment agreement, OIC, CNC), and penalty abatement options apply.

Employment Tax Liabilities and Notice 1058

When Notice 1058 is issued for unpaid employment taxes (Form 941 liabilities), the stakes are particularly high because the IRS can pursue the Trust Fund Recovery Penalty (TFRP) under IRC §6672 against responsible persons individually. The TFRP equals 100% of the unpaid trust fund taxes (the employee's share of Social Security, Medicare, and withheld income taxes) and is assessed personally against any person who was responsible for collecting and paying over the taxes and willfully failed to do so.

Practitioners handling Notice 1058 for business employment tax liabilities must immediately: (1) Determine whether the TFRP has already been assessed against any individuals. (2) Identify all potentially responsible persons (owners, officers, bookkeepers, anyone with check-signing authority). (3) Advise responsible persons to retain separate counsel if the TFRP is at issue, as their interests may conflict with the business's interests. (4) Consider whether an installment agreement for the business can be structured to prevent TFRP assessment.

Payroll Tax Deposit Penalties and Abatement

Employment tax liabilities often include significant penalties: the failure-to-deposit penalty (FTD penalty) under IRC §6656 ranges from 2% to 15% depending on how late the deposit was. The failure-to-pay penalty adds 0.5% per month. Interest accrues at the federal short-term rate plus 3 percentage points.

First-time penalty abatement (FTA) is available for the FTD penalty if the taxpayer has a clean compliance history. Reasonable cause abatement is also available — common arguments include: reliance on a payroll service provider that failed to make deposits, a natural disaster or casualty, or serious illness of the responsible person. The IRS has a specific revenue procedure (Rev. Proc. 2001-43) for abating FTD penalties when a payroll service provider caused the failure.

Practitioner Checklist and Client Communication

When advising clients on this matter, practitioners should follow a structured communication protocol. Begin by confirming the client received the notice and the exact date on the notice — the response deadline is calculated from that date, not the date the client received it. Obtain a complete copy of the notice and all prior correspondence with the IRS on this matter. Pull the IRS transcript using Form 4506-T or the Tax Pro account to verify the IRS's records match the client's records.

Prepare a written response that addresses each issue raised in the notice specifically. Vague or general responses are less effective than targeted, documented responses. Include all supporting documentation as attachments — do not assume the IRS has access to documents the taxpayer previously submitted. Send the response via certified mail with return receipt requested, and retain a complete copy of everything sent.

Follow up with the IRS if no response is received within 60 days. The IRS is required to respond to correspondence within 30 days, but processing times are often longer. If the matter is urgent (imminent levy, lien filing, or statute of limitations issue), call the IRS Practitioner Priority Service (PPS) line at 866-860-4259 to expedite processing.

How Uncle Kam Can Help

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If you are a tax professional who handles IRS notices and collection matters, the Uncle Kam marketplace connects you with taxpayers who need your expertise right now. Join the marketplace to receive qualified leads for IRS notice resolution, collection defense, and tax debt settlement engagements.

Frequently Asked Questions

Q: How long does the IRS give me to respond?
A: Most IRS notices give 30 to 60 days to respond. The response deadline is printed on the notice itself. Always calculate the deadline from the date on the notice, not the date you received it — mail delays can eat into your response window. If you need more time, call the IRS before the deadline to request an extension.

Q: What happens if I ignore this notice?
A: Ignoring IRS notices is the worst possible response. The IRS will escalate collection activity, assess additional penalties and interest, and eventually issue a Final Notice of Intent to Levy (CP90 or Notice 1058). At that point, the IRS can seize bank accounts, garnish wages, and file federal tax liens. Every ignored notice makes the situation worse and more expensive to resolve.

Q: Can I handle this myself or do I need a tax professional?
A: Simple balance due notices (CP14) can often be resolved by paying the balance or setting up a payment plan online. However, any notice that involves a proposed tax change, audit, collection action, or penalty over ,000 should be handled by a qualified tax professional — an enrolled agent, CPA, or tax attorney. The cost of professional representation is almost always less than the cost of making a mistake in your response.

Q: Will this affect my credit score?
A: A federal tax lien (which can result from unpaid taxes after CP504 or CP90) is a public record that can appear on credit reports and significantly damage credit scores. However, the IRS has a Fresh Start initiative that makes it easier to avoid liens for balances under 5,000 that are paid through direct debit installment agreements. Resolving the tax debt before a lien is filed is the best way to protect your credit.

Q: Can penalties be removed?
A: Yes. The IRS offers several penalty abatement programs: First-Time Penalty Abatement (FTA) for taxpayers with a clean compliance history, Reasonable Cause abatement for taxpayers who had a legitimate reason for non-compliance, and Statutory exceptions for certain specific circumstances. A qualified tax professional can evaluate which abatement options apply and submit a formal abatement request on your behalf.