If you’ve received IRS Notice LT16 in the mail, it’s natural to feel concerned. This notice is a formal communication from the Internal Revenue Service indicating that you either owe unpaid taxes, have unfiled tax returns, or both. Understanding what this notice means and how to respond can help you avoid serious consequences like wage garnishment or asset seizures.
What Is IRS Notice LT16?
IRS Notice LT16 is a collection notice sent when the IRS believes you have:
- Unpaid taxes, and/or
- Unfiled tax returns
Notice LT 16 serves as a warning that your account has been assigned for enforcement action, which may include:
- Seizure of wages or property
- Filing of a federal tax lien
- Assessment of additional penalties and interest
Why Did You Receive Notice LT16?
You may receive Notice LT16 if:
- You missed filing one or more tax returns
- You filed but didn’t pay the full amount due
- The IRS has not received or processed your payment or return
Sometimes, the IRS may send this notice even if you believe you’ve already filed or paid. In such cases, it’s important to gather your verification records and contact the IRS to get things straightened out. Of course, it is advisable that you have a qualified representative contact the IRS on your behalf rather than contacting the IRS yourself.
The Good News!
Like many notices from the IRS, Notice LT16 is a warning letter. It is NOT a final notice of intent to levy (freeze bank accounts/garnish wages). In most cases, the IRS still has to send Notice LT11 or Letter 1058 before they can issue levies. In other words, receiving Notice LT16 doesn’t mean that the IRS is at your doorstep, but they are on the way.
What Should You Do Next?
- Read the Notice Carefully
The LT16 notice will detail:
- The tax years involved
- Amounts owed (including penalties and interest)
- Filing issues, if any
- Prepare/File Missing Returns
If the LT16 indicates missing returns, prepare and file them immediately. If these returns result in a balance owed, it is wise to consult a tax professional to prepare a strategy for resolving the tax balance due.
- Appeal or Dispute
If you disagree with the notice:
- Have a representative contact the IRS
- Prepare documentation (e.g., proof of payment, filed returns, etc)
Penalties and Interest
The IRS charges:
- Failure-to-pay penalties (0.5% to 1% monthly; capping at 25% of the balance owed)
- Interest, which accrues daily from the due date
- Take Action!!!
The most important thing to do in response to receiving Notice LT16 is to take action. The most costly mistake we see taxpayers make is doing NOTHING.
If you would like to discuss your specific issues in detail, please contact Gregory Law Group at 972.331.6666
