IRS NOTICES: TAX DEBT

What is an LT16 notice?

Jo Willetts, EA Director of Tax Resources, Jackson Hewitt Published On June 10, 2020

IRS notices are letters sent to inform taxpayers of important tax information. Each one is different, but we can explain what the LT16 is about.

Understanding your LT16 notice

This notice is serious. This is a Final notice before the IRS takes enforcement action because you owe the IRS taxes and/or tax returns and haven’t responded to previous notices.

Type of Notice

Tax debt; missing tax returns

Why you received the LT16 notice

You received an LT16 notice because the IRS believes you owe them money OR that you have missing tax returns. If you do not address the issues listed in your notice, you will most likely face enforcement action from the IRS, including garnishing your wages or seizing your assets. You could also have a notice federal tax lien filed against you which can affect your credit and the ability to get a loan.

Likely next steps

You must take immediate action when you receive this notice. Carefully read the notice. Second, determine if you need to file any missing tax returns and file those as soon as possible. Then, pay the taxes you owe in full by the due date or set up a payment plan. You must have all tax returns filed before being granted an Installment Agreement. You can also contact a tax professional to learn more about your options.

If you disagree with the taxes, you can dispute them and if you can’t reach an agreement with IRS, you’re entitled to a hearing with the Office of Appeals.

LT16 Notice deadline

The deadline for a response to an LT16 notice is 10 days from the date of the notice.

If you miss the deadline

If you miss the 10-day deadline, you could face enforcement actions from the IRS, including wage garnishment and property seizure.

About the Author

Jo Willetts, Director of Tax Resources at Jackson Hewitt, has more than 25 years of experience in the tax industry. As an Enrolled Agent, Jo has attained the highest level of certification for a tax professional. She began her career at Jackson Hewitt as a Tax Pro, working her way up to General Manager of a franchise store. In her current role, Jo provides expert knowledge company-wide to ensure that tax information distributed through all Jackson Hewitt channels is current and accurate.

Jackson Hewitt Editorial Policy

Owe back taxes? Jackson Hewitt^® can help.

Learn More

What Is an IRS Offer In Compromise

An Offer in Compromise —also known as an OIC— is an IRS program that allows taxpayers to settle their outstanding debts for a lower amount than currently owed. The IRS may reject the offer if it doesn’t meet their threshold for approval, leaving taxpayers no option but to file an appeal if they choose to pursue their case. In 2017, roughly 62,000 OIC’s were submitted to the IRS with only 25,000 cases being approved. This amounts to a rejection rate of nearly sixty percent and highlights the importance of approaching the OIC application with extensive care and planning. Any errors, miscalculations, or unclear information will slow down the application and possibly lead to a full rejection of the claim. To submit an OIC application, there are clear requirements that must first be met.

by Jo Willets | March 6, 2020

What is IRS Notice CP14?

IRS notices are letters sent to inform taxpayers of important tax information. Each one is different, but we can explain what the CP14 is about.

by Jo Willetts, EA | June 10, 2020

How to Setup an IRS Payment Plan or Installment Agreement

There are few things more concerning than owing the IRS money, especially given almost 40% of American adults would not be able to pay an unexpected $400 expense. Unexpected debt is a problem faced by millions of Americans, but when it comes to IRS debt, paying the entire amount in full is the best way of resolving the issue. This can be done by writing a check, sending in a money order, paying by credit card, or going online to irs.gov and paying the full amount as a direct debit (from a taxpayer’s account directly to IRS). Taxpayers who are unable to pay in full have two types of installment plan agreements available.

by Jo Willets | March 6, 2020

Why Jackson Hewitt^®?

We’ll work hard for you

Our Tax Pros will answer your questions, provide tax tips, and help you get smarter about your money.

We know our stuff

Jackson Hewitt is a leader in the tax industry, having prepared millions of tax returns in more than 35 years.

We’ll make it easy

We’re committed to helping you, fast and efficiently. Taxes done how you want and when you want.

Owe back taxes? Jackson Hewitt® can help. Call 833-381-8672 now!