IRS Notice LT36: The IRS Is Targeting 525,000 Federal Employees
IRS Notice LT36 is the notice the IRS sends to current and retired federal employees to notify them that they are currently noncompliant with their federal tax obligations.
This could mean one or both of the following things:
- The current or retired federal employee has not filed all of their required tax returns.
- The current or retired federal employee has outstanding federal tax debt.
The IRS sends this notice to these employees to encourage them to pay their taxes on time and “lead by example.”
If you are one of the 525,000 current or retired federal employees the IRS is targeting with Notice LT36, please call us immediately at 866-8000-TAX to schedule your free consultation with Choice Tax Relief.
Here is a redacted Notice LT36 that the IRS sent to one of our newest clients.
Table of Contents
IRS Notice LT36 At a Glance
| Notice Type: | Urgent Notice |
| Generated By: | IRS ACS Support |
| Preceded By: | At Least One Other LT or CP Notice |
| Followed By: | Adverse Consequences |
| Recommended Action: | File Delinquent Returns and Pay Off Balance Due or Enter Into Resolution |
IRS Notice LT36 Explained, Part by Part
Here is a full explanation of the Notice LT36, part by part.
Part 1: The IRS Guilt Trips You
The LT36 opens with the IRS thanking you for your federal service and then immediately guilt tripping you about your tax issue with this language:
“…everyone has a responsibility to pay their taxes on a timely basis and current or retired federal employees should also lead by example. We expect you to resolve this matter promptly.”
The notice then goes on to state that the IRS will deal with you directly if you do not resolve your outstanding federal tax issues.
So don’t be too flattered by the IRS’s thanks here; make no mistake — the LT36 Notice serves as a warning to resolve the issue as soon as possible on your own before the IRS takes matters into their own hands.
The IRS will also follow up the warning with a clause from Congress, citing the importance of federal employees complying with tax laws.
Part 2: What The IRS Needs You To Do Immediately
Next, the IRS will tell you what it wants you to do immediately.
Obviously, since it’s the IRS, it will want you to pay off your outstanding balance. It will provide you with different methods with which to pay. You can both pay and file online, with the IRS providing ways to do so.
If you cannot pay, the IRS lets you know that you can apply for a payment plan.
Part 3: If The IRS Made A Mistake
You need to confirm that you actually owe the IRS and have an outstanding tax issue. The IRS makes mistakes, and it’s up to you to trust but verify.
If you’ve checked your balance and notice multiple times and found an irrefutable error, then you can call the IRS at their provided number.
We will expand further on these steps to take later in the article.
What You Should Do If You Receive an LT36
Below are steps for you to take after you receive an LT36 Notice from the IRS.
Step 1: Confirm You Actually Owe The IRS
Again, like we previously said, it’s important to confirm that you really owe the IRS money. Sometimes, the IRS will let things slip through the cracks.
You need to protect yourself and your account by checking and double-checking the fact that you actually owe the IRS. Try and ask yourself some questions.
The IRS is saying you have an outstanding balance. Is this true? Do you actually have a balance, or did the IRS fail to update your account?
We urge you to read and understand your notices. If it’s not correct, then you have the right to protect yourself by disputing it.
Step 1a: Dispute the Charges if the IRS is Wrong
If you found an error, you should call the IRS at the provided number.
It’s important to do so as soon as possible since you want to minimize the amount of penalties accruing on your account.
Unfortunately, it’s likely that everything will be resolved in one phone call. You will probably have to call multiple times and tell your story multiple times. As difficult as it is, it’s imperative to take action as soon as you can.
We always provide this service for our clients.
Step 2: If You Can Pay In Full, Do So
The best and fastest way to solve everything is to pay your outstanding balance off in full. It will halt anymore penalties or notices, allowing you to proceed through life as normal.
If you can pay in full, do so. It’s the best solution for any tax-related problem.
Step 3: Seek Penalty Abatement From the IRS
If you cannot pay your balance, consider seeking some form of penalty abatement. Penalty abatement possibly removes or reduces what you owe. It’s an agreement between the IRS and the taxpayer allowing the latter to resolve tax debt more effectively.
Not everyone qualifies for penalty abatement, so it’s not a guaranteed solution. However, it’s always worth trying, just in case.
Choice Tax Relief will always attempt to seek some penalty abatement for our clients.
Step 4: Seek Tax Relief
Consider seeking tax relief if you’ve done everything possible to plead your case with the IRS. While the timeline isn’t the clearest or most straightforward, it’s better than taking no action at all.
Your first option is a Payment Plan. The IRS is usually willing to set up and organize a payment plan to help you get your debt under control as you pay in installments.
Another option is known as an offer in compromise (OIC). An OIC allows the taxpayer to settle their tax debt for less than they owe. It allows tax debt to be alleviated and is the next best solution.
Since an OIC isn’t a feasible option for everyone, the IRS provides other alternatives. Things like the previously mentioned installment payments are highly effective, alongside temporary hardship placements (called currently not collectible status).
A “not collectible status” will halt any IRS action against your account and you for a predetermined amount of time. Unfortunately, it will not make any debt disappear. However, it will give you some time to prepare and save to pay off your debt.
Author:
Logan Allec, CPA, Founder and Owner
Logan Allec has been serving taxpayers as a CPA for over 14 years. After leaving his role at a "Big 4" firm, he started Choice Tax Relief to help everyday Americans who have found themselves behind on their taxes. He also educates thousands of people daily about tax relief on his YouTube channel. In addition to his CPA license, Logan also has a Master's Degree in Taxation from the University of Southern California (USC). He lives with his wife and children in the Los Angeles area. Learn more about Logan here.
