IRS LT16: what it means and what to do

What this notice means

The IRS says an LT16 means it is trying to collect unpaid taxes from you and/or its records show missing tax returns.

“If you received a simple LT16 notice, it’s because we’re trying to collect unpaid taxes from you and/or our files show we’re missing tax returns from you.”
IRS, Understanding your LT16 notice

What to do

The IRS says following the notice instructions may stop enforcement action, and to file any missing returns as soon as possible.

“Read your notice carefully: Following the instructions on your notice may stop enforcement action. File missing tax returns (if any): If your notice indicates you have missing tax returns, file the missing returns as soon as possible.”
IRS, Understanding your LT16 notice

If you disagree

The IRS says if a return reported as missing was sent over 10 weeks ago, send a signed copy again, or call if it was wrongly reported as missing.

“If it’s been over 10 weeks since you sent us the return, send a signed copy of it to us again. If you find that one or more of your returns were incorrectly reported as missing, please contact us using the toll-free phone number on your notice.”
IRS, Understanding your LT16 notice

If you can’t pay

The IRS says pay what you can and set up an installment agreement for the rest; you must be current on filings to apply.

“If you can’t pay the full amount due: Pay as much as you can now and set up an installment agreement for the remaining balance. You must be current on your filings in order to apply for an installment agreement.”
IRS, Understanding your LT16 notice

What happens if you ignore it

The IRS says taking action helps avoid enforcement, which can include seizing assets or wages or filing a notice of federal tax lien that could affect your credit.

“It is essential that you take action in order to avoid potential enforcement action, which can include seizing your assets or wages. Enforcement action could also include the filing of a notice of federal tax lien, which could affect your credit score and ability to borrow.”
IRS, Understanding your LT16 notice

Your rights

The IRS says if you dispute the tax or cannot resolve a disagreement, you are entitled to a hearing with the Office of Appeals, and refers to Publication 1660.

“Your appeal rights: If the tax is in doubt, you dispute the amount of the tax, or can’t resolve a disagreement with us, you’re entitled to a hearing with the Office of Appeals. Please refer to Publication 1660, Collection Appeal Rights PDF; or visit Appeals. You can also call the toll-free phone number on your notice.”
IRS, Understanding your LT16 notice

A related right

The IRS says the Taxpayer Advocate Service is an independent organization within the IRS that can help if your tax problem is causing a hardship or you could not resolve it with the IRS.

“The Taxpayer Advocate Service (TAS) is an independent organization within the IRS that can help protect your taxpayer rights. TAS can offer you help if your tax problem is causing a hardship, or you've tried but haven't been able to resolve your problem with the IRS.”
IRS, Understanding your LT16 notice

More from the IRS on this notice

The IRS says that if its Do I need to file a tax return? tool says you need not file but the notice says you must, you should call the toll-free number on the notice.

“Use the Do I need to file a tax return? tool to verify that you do not meet the filing requirements for the tax years involved. If the tool indicates you’re not required to file a return, but the notice indicates you are, please call the toll-free number on your notice.”
IRS, Understanding your LT16 notice

The IRS says you may need to file even if you are due a refund, and to get the refund you must file within three years of the original due date or two years after paying the tax, if applicable.

“Based on your income and other factors, you may still be required to file even if you’re due a refund. Also, to receive the refund, you must file a delinquent return within three years of the original return due date, or within two years of the date you full paid the tax, if applicable.”
IRS, Understanding your LT16 notice

The IRS says payments can take up to 21 days to post, so you can disregard the LT16 if you paid in full within the last 21 days.

“Payments on your balance can take up to 21 days to post on your account. If you paid your balance in full within the last 21 days, please disregard the LT16 you received.”
IRS, Understanding your LT16 notice

The IRS says that if you owe less than $50,000 you may be able to set up an installment agreement online, the fastest way to get one approved.

“If you owe less than $50,000, you may be able to set up an installment agreement using the Online payment agreement application, which is the fastest way to get an installment agreement approved.”
IRS, Understanding your LT16 notice

The IRS says currently-not-collectible status delays collection but does not stop penalties and interest or erase the debt.

“Putting your account in currently not collectible status does not stop penalties and interest from being charged and it does not mean the debt goes away; it means the IRS has determined you can’t afford to pay the debt at this time.”
IRS, Understanding your LT16 notice

The IRS says an offer in compromise may let you settle for less than the full amount if you cannot pay or paying would create financial hardship.

“Under certain circumstances, an offer in compromise allows you to settle your tax debt for less than the full amount you owe. This may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship.”
IRS, Understanding your LT16 notice

The IRS says you may qualify for penalty relief if you tried to comply but could not meet your obligations due to circumstances beyond your control.

“You may qualify for relief from penalties if you made an effort to comply with the requirements of the law, but were unable to meet your tax obligations, due to circumstances beyond your control.”
IRS, Understanding your LT16 notice

Before you reply

1. Compare the notice with your own records for the tax year it names.
2. Note the date on the notice and the response date it gives.
3. Answer by the method and address the notice gives; keep a copy of everything you send.
4. If the notice could be fraudulent, contact the IRS through the phone number or address on IRS.gov, not one printed on a suspicious letter.

Common questions

What if I disagree with the LT16?

The IRS says if a return reported as missing was sent over 10 weeks ago, send a signed copy again, or call if it was wrongly reported as missing.

What happens if I ignore a LT16?

The IRS says taking action helps avoid enforcement, which can include seizing assets or wages or filing a notice of federal tax lien that could affect your credit.