Letter 6096 tells you the IRS is returning, or has returned, money it took from a retirement account by levy because the levy was wrongful or one of certain erroneous types under IRC Section 6343(b) or 6343(d)(2)(A). A common example is a retirement levy made without the required Collection Due Process notice.
You Can Put It Back
IRC Section 6343(f) lets you contribute the returned funds back into the retirement plan they came from, or into an IRA. The deadline is the due date, not including extensions, of your tax return for the year the funds are returned to you. If the money comes back in 2026, you generally have until April 15, 2027.
The recontribution is treated like a rollover. It does not count against the one-IRA-rollover-per-year rule.
The Tax Gets Undone
If you recontribute on time, the IRS is required to abate any income tax assessed because of the levy, or refund it if you already paid. The IRS must also pay interest on the returned amount in these cases.
Do Not Spend It
The deadline is firm. If you spend the money instead of recontributing it, you lose the retirement savings and the tax relief that comes with putting it back.
If you received Letter 6096, call us at (813) 229-7100. The recontribution deadline is easy to miss.