Have you fallen behind on paying taxes? You might receive IRS LT16 Notice in the mail. This notice summarizes your unpaid taxes and steps to take to rectify the issue right away. You could also receive it if you haven’t filed tax returns and should have.

Never ignore IRS notices. With LT16, if you don’t do anything, the IRS will continue to take actions to collect what you owe, sometimes even resorting to garnishing your wages or seizing your property. Acting quickly will help you avoid repercussions like tax penalties, which only make your tax bill higher.

The good news is that you can find help at Damiens Law. We’ll help you navigate an IRS LT16 Notice and explain your options for getting back on track. Contact our office today to learn more.

Key Takeaways

• IRS LT16 Notice – You have unpaid taxes or an unfiled return. 
• How to respond – Pay off your balance, set up a payment plan, or consider other relief options. Talk to a tax expert for help.
• Caution – Don’t ignore Notice LT16. Doing so may result in an escalation of collection actions, including asset seizure or wage garnishment.
• If you disagree – Contact the IRS if you have a question or don’t agree with the information provided.
• Get help – Damiens Law is here to help you navigate IRS notices like LT16 and any other tax problems you may be facing.

An Overview of the IRS LT16 Notice

The IRS says that the main purpose of Notice LT16 is to collect unpaid taxes from taxpayers. The agency uses this notice for people with both filed and unfiled returns, but either way, if you receive the LT16, you owe the IRS money. 

This notice typically isn’t the first one the IRS sends, so by the time you receive it, you have likely received multiple notices in the mail about missing a deadline, an outstanding balance, or tax penalties and interest. LT16 is sent if you haven’t responded to those other notices and have still ignored making your payment.

The IRS LT16 Notice includes the following information, which you should review thoroughly:

• The amount you owe, including penalties and interest on top of your original balance
• If applicable, the tax returns that are overdue
• The deadline for making your payment
• Instructions for making your payment via mail, phone, or online

Remember that you should never just ignore an IRS notice. Doing so will only escalate the situation. With LT16, it’s important to follow the instructions right away, especially because this isn’t the first contact the IRS has made with you. If you’re unable to pay or you don’t understand the notice, contact a tax expert for assistance.

What Happens If I Ignore an LT16 Notice?

If you don’t act within the timeline provided on your LT16 Notice, the IRS will continue to try to collect what you owe. This may include these further actions:

• Filing a federal tax lien, which is a public record other creditors can see
• Issuing tax levies, which indicates the IRS is planning to seize your assets
• Garnishing your wages to cover your tax bill
• Seizing your passport

In addition, you’ll also be hit with more penalties and building interest on your account. So, it’s always best to act quickly to avoid an even higher tax balance in the end. If the IRS has taken all of these actions and still hasn’t been able to collect, and your balance is significant, your case may be assigned to a revenue officer to work on enforcement directly.

How LT16 Differs from Other IRS Notices

Notice LT16 is more serious than other IRS notices that notify you of an outstanding balance. The first notice you may receive after missing a deadline is Notice CP14, which outlines your missed payment, penalties, and interest. 

Getting an LT16 Notice means the IRS has already tried to contact you through these other notices. So, it has more urgency. You are more at risk of having your assets seized or other IRS collection actions taken.

However, LT16 may not be the final notice you’ll get if you continue to do nothing. The IRS may send you a notice regarding a federal tax lien or tax levy that notifies you of those coming enforcement actions.

What to Do If You Receive IRS Notice LT16

So, if you’ve received this IRS notice, what do you do? Here’s a step-by-step look at your next actions and options:

Carefully Review Your Notice

Always make sure any notice you receive is actually from the IRS. You can call the IRS to make sure they sent it to you. Remember that they will never text or email you about outstanding taxes or other demands.

Review all the information on your notice thoroughly so you understand exactly what you did wrong, how much you owe, and how long you have to respond. Review your records if necessary to confirm the information.

Use Your IRS Online Account

Another way to verify your notice and get all the details about your balance is to use the IRS Online Account system. This tool allows you to view digital copies of notices and a breakdown of your balance, including penalties. Review all these details to ensure the notice is accurate and that you understand everything.

Pay Off Your Balance

The ideal next step is to pay off your tax balance. Paying in full is the fastest way to resolution, but you have other options like setting up a payment plan if you want to pay monthly until it’s paid off. You can usually apply for a plan online through your IRS account. Either option will pause the IRS’s collection actions as long as you’re making your payments on time.

File Your Unfiled Returns

If one of your issues is an unfiled return, take steps to file it right away. In some cases, the IRS will file a substitute for return (SFR) on your behalf using information they received from your employers or financial institutions. If this is the case, you still want to file your return before it’s too late because the IRS will not include any credits or deductions you qualify for, leading to a higher tax assessment.

Consider Tax Relief Options

If you can’t pay your balance, even with an installment agreement, you have a few other options for relief. Here’s a brief look at what you can request:

• Offer in compromise (OIC): An OIC may be available if you can show the IRS that your finances don’t allow you to pay your balance in full. They may agree to accept a lower offer from you to resolve your debt.
• Currently not collectible (CNC): CNC is a status the IRS puts on your account that indicates they won’t try to collect from you because you’re going through financial hardship. This status is only temporary, however, so you’ll have to pay once again if your situation improves.
• Partial payment installment agreement (PPIA): PPIAs allow you to make monthly payments like you would in a payment plan, but payments are lower, and once the collection statute expiration date (CSED) is up, you don’t have to pay the rest of the balance at that point. The CSED is 10 years.
• Penalty relief: To try to reduce your balance, you can ask for penalty abatement in some cases. Abatement for reasonable cause could apply if a circumstance outside your control, such as a natural disaster, got in the way of your ability to pay. First-time penalty abatement may apply if you have a good tax compliance history for the last three years.
• Spousal tax relief: The IRS also grants spouses relief in some cases so they’re not liable for their spouse’s tax bill. Innocent spouse relief may help you remove liability if your spouse made errors on your joint tax return that you didn’t know about. Injured spouse relief allows you to take back money that you used from your refund to cover your spouse’s tax debt.

These options can be hard to navigate or understand. Work with a tax attorney at Damiens Law to ensure you qualify for a program before applying.

Contact the IRS If You Disagree

If you’re confused about something on your notice, you can always contact the IRS to ask questions and get help. If you don’t agree with the details they provided, call the number on your notice, and be ready with proof, such as account information or tax returns you filed. You also have the right to appeal an IRS decision if you don’t agree with the outcome. 

Don’t Ignore Your Notice

The worst thing you can do is ignore your IRS notice. Doing so will only mean more penalties and interest and the potential for severe actions like liens and levies. Even if you can’t afford your bill, you can request relief and avoid these consequences from taking place. Talk through your situation with a tax expert at Damiens Law to choose the right option.

FAQs About IRS Notice LT16

Why Did I Receive an LT16 Notice?

The IRS sends this notice when a taxpayer hasn’t filed their required tax returns or owes money in unpaid taxes. This notice will come after several other notices, so it’s more urgent. It outlines how to pay off your balance and includes IRS contact information.

What Happens If I Ignore an IRS LT16 Notice?

The IRS will then continue its collection actions, including escalating to filing a federal tax lien, issuing tax levies on your property, or garnishing your wages.

What Steps Should I Take If I Received IRS Notice LT16?

First, review the notice carefully. Pay off your balance if you can, or set up a payment plan to pay over a set period. You can also apply for an offer in compromise or request currently not collectible status if you’re going through financial hardship.

What If I Disagree with my LT16 Notice?

Review your notice, as it may include what to do if you don’t agree with the details provided. Review your records carefully, and contact the IRS about what you believe is false. Provide evidence and be ready to state exactly what is incorrect.

How Can a Tax Attorney Help Me with Notice LT16?

A tax professional, such as an attorney or a CPA, will review your records and the notice carefully and get to the bottom of your problem. They will then make recommendations based on what you qualify for, including tax relief options to consider. They can also help if you want to appeal an IRS decision and will represent you with the IRS.

Consult with the Team at Damiens Law

Damiens Law is here to help you if you received IRS Notice LT16 or any other notice in the mail. It can feel daunting to get a notice about money you owe, but you don’t have to deal with it on your own. 

We will work with you to determine what caused the compliance issue and how to best resolve the matter before it escalates. We can help you apply for a payment plan, OIC, PPIA, spousal relief, penalty abatement, or other relief options based on your eligibility and situation. Our attorney will also communicate with the IRS on your behalf and represent you in court if necessary.

Contact Damiens Law today to set up a consultation with a tax expert.