LT75 Notice: A Federal Contractor Levy and Your Hearing Rights

What the LT75 notice says

The IRS page for this notice says: “Your federal tax is unpaid. We asked you to pay the tax but haven’t received your payment. We issued a notice of levy to collect your unpaid taxes.” It tells you to send full payment to the address on the letter right away and to call the number on the letter for your total balance.

A levy is a legal order that lets the IRS take property, such as money in a bank account or payments owed to you, to pay a tax debt.

Why the IRS levied before offering a hearing

Before most levies, the law requires the IRS to offer a Collection Due Process (CDP) hearing, a review by the IRS Independent Office of Appeals. The usual warning letter is the LT11 or Letter 1058, which our final notice of intent to levy page explains. IRC 6330(f)(4) makes an exception for a “Federal contractor levy,” and IRC 6330(h)(2) defines it as any levy on a person, or a business it took over, that is a federal contractor.

The IRM says the IRS may issue this levy to collect any individual or business tax debt once the CP504 notice period has run out, the person is a federal contractor, and the required advance notice about contacting third parties has gone out. After the levy, “an LT75, post CDP letter, will automatically generate.” The IRM lists the LT75 among the notices that give CDP rights.

The IRM calls this levy discretionary. The IRS may still send a pre-levy notice to a federal contractor when the situation warrants. If no CP504 went out, the IRM tells staff to send the LT11 instead.

The IRM also says how the IRS knows: an unreversed transaction code 971 with action code 647 on the account marks the taxpayer as a federal contractor, and the IRS’s collection system shows a “FEDCN” alert. The exception applies only when the person levied is a federal contractor. If that marker is wrong, the CDP hearing is the place to say so, because IRC 6330(c) lets you challenge whether a collection action is appropriate.

Your hearing right and its deadline

IRC 6330(f) requires the IRS to give you the opportunity for the hearing within a reasonable period of time after the levy. The regulation sets the window: a taxpayer “must request the CDP hearing within the 30-day period commencing on the day after the date of the CDP Notice.” That rule covers a post-levy notice like the LT75. The period starts the day after the date printed on your letter.

The IRS page says to request an appeal of the levy by following the instructions on the letter, and it lists Form 12153, Request for a Collection Due Process or Equivalent Hearing. At the hearing, IRC 6330(c) lets you raise any relevant issue about the unpaid tax or the levy, including an offer of a collection alternative such as an installment agreement.

A timely request also pauses the time limit the IRS has to collect the tax. The regulation says the pause starts on the date the IRS receives the written request and runs until you withdraw the request in writing or the hearing’s outcome becomes final. Our CSED calculator shows how a pause like this moves the collection deadline.

The trap: the hearing does not stop more levies

With an ordinary pre-levy notice, a timely hearing request stops the IRS from levying for the periods under review. This levy works differently. The IRM says the IRS may serve federal contractor levies during a timely requested pre-levy or post-levy CDP hearing, or during court review of that hearing. They can reach every unpaid period, including the periods the hearing covers.

A timely request still matters: it opens the hearing and the pause on the collection deadline. It does not protect your payments or accounts from another federal contractor levy.

If you cannot pay in full

The IRS page says to pay as much as you can now and set up an installment agreement for the rest. It warns that you must be current on your filings to apply. File any missing returns first. Our collection alternatives router compares a payment plan with the other options.

What people mistake the LT75 for

Most IRS levy letters, such as the LT11 or Letter 1058, warn of a levy to come. Readers often take the LT75 for one of them. It reports a levy the IRS already issued.

Others take it for the CP504, the earlier notice of intent to levy. The IRM says the IRS issues this levy only after the CP504 period has run out, so the LT75 comes later in the process.

Common Questions