IRS Notice LT16: What It Means and What to Do

Why did I get an LT16?

Common reasons include:

• An unpaid balance from earlier notices that was never resolved
• One or more tax returns that IRS records show as not filed
• A return you filed that the IRS has not processed or received
• An earlier collection letter that went to an old address or went unanswered

What should I do?

1. Read the letter carefully. The IRS says following its instructions may stop enforcement action.
2. File any missing tax returns listed on the letter as soon as possible. You may need to file for more than one year.
3. Pay the balance in full if you can. The IRS says this stops enforcement and more interest and applicable penalties.
4. If you can't pay in full, pay what you can and set up an installment agreement. If you owe less than $50,000, the Online Payment Agreement tool may work. You must be current on your filings.
5. If you are facing financial hardship, contact the IRS and be ready to discuss your income, expenses and assets.
6. If you think a return was wrongly reported as missing, or you don't have to file, call the toll-free number on your letter.

What documents do I need?

• The LT16 letter
• Copies of any returns you already filed for the years listed, with proof of mailing or e-file acceptance
• W-2s, 1099s and other income records for any unfiled years
• Proof of recent payments or installment agreement approval
• A list of monthly income, expenses and assets, if you will request hardship status or a payment plan

What should I avoid?

• Don't ignore it. The IRS says enforcement can include seizing assets or wages and filing a notice of federal tax lien.
• Don't send a new copy of a missing return too soon. The IRS says to resend a signed copy only if it has been over 10 weeks since you sent it.
• Don't stop paying an approved installment agreement. Keep making payments under it.

What if I disagree with an LT16?

If the tax is in doubt, you dispute the amount, or you can't resolve a disagreement with the IRS, you are entitled to a hearing with the IRS Independent Office of Appeals. The IRS points to Publication 1660, Collection Appeal Rights, for how to request one (for example, the Collection Appeals Program with Form 9423). You can also call the toll-free number on your letter. If you think a return was wrongly reported as missing, or that you weren't required to file, call that number. You can use the IRS "Do I need to file a tax return?" tool to check.

What happens if I ignore an LT16?

The IRS says enforcement action may follow, which can include seizing assets or wages and filing a notice of federal tax lien that could affect your credit score and ability to borrow. Interest and applicable penalties generally continue until the balance is paid in full.

What else should I know about LT16?

An LT16 can be about two different problems at once: unfiled returns and unpaid balances. The first step is to see which applies to you, because you must be current on your filings before the IRS will approve an installment agreement. The IRS internal manual shows that the Automated Collection System also uses LT16 in place of an LT11 when an earlier levy notice was returned undelivered and a newer address is found. That means you may have missed an earlier final notice. The collection due process rights from that earlier notice may have expired, and the IRS may move on to a levy decision if you don't respond by its follow-up date. So contacting the IRS promptly after an LT16 matters even though the letter itself has no statutory deadline.