IRS Notice or Letter

“I Just Received a Notice or Letter From the IRS With the Notation in The Upper Right Hand Side of a LT-16 Letter. What is this? And how to respond?”

IRS Notice or Letter LT16 (LT16) was received stating that your outstanding taxes have been assigned for immediate enforcement action.

The letter gives you three options:

(1) send a check within 10 days to the IRS to pay your taxes;

(2) call the IRS to make payment arrangements; or (3) face an IRS levy on your wages and property.

Essentially what does the LT16 mean? The LT16 by itself, does not allow the IRS to levy on your wages or seize your property. Before the IRS can levy or seize your property, they must first send you a Final Notice of Intent to Levy, identified as Notice or Letter LT11 (LT11) or Notice 1058. After receiving an LT16, it is important to find out if the LT11 has been sent. You will need to review all the IRS letters you have received to see if you have a LT11.

To be safe, I suggest you contact the IRS and request your account transcripts for the year or years at issue. On the transcripts will be IRS entries if the LT11 was sent.

So what to do with the LT16?

The LT16 often indicates that the IRS is transferring your case from its Automated Collection Service (ACS) division to a local IRS office. Collection action will be handled by what is called a Revenue Officer (RO).  A RO is the highest level IRS collection agent. They work in your city, and often start a case by making a visit to your home or office.

Contact the IRS right now! Ask if the case is being assigned to a RO. If RO case assignment is pending, now is the time to get prepared. That means getting your personal financial statements (Forms 433-A or 433-F), or business financial statements (Form 433-B) completed. You will need these Forms when you deal with the RO. Make sure you are in compliance with your current filing requirements and that you are paying your current taxes. If you are self-employed, you will need to make sure you are current with your estimated deposit requirements.

The RO will want to see current income and your monthly living expenses and a listing of your assets. After you have provided the RO your financial statements, the RO could place you into an installment agreement to pay the taxes, process an offer in compromise for settlement of the taxes, or determine that you cannot currently afford to pay the taxes.

What to do if the LT11 was sent?

File a Collection Due Process Appeal (CDP) with Form 12153 and this will stop further IRS enforced collections. CDP’s filed within one year from the date of the LT11 was sent to you, will transfer your case from the Collections to the Office of Appeals. By moving the case to Appeals you are no longer negotiating with an RO, but an IRS Settlement Officer. If filed within 30 days following the date you got the LT11, you will also get appeal rights to the United States Tax Court of the Settlement Officer’s decision.

The IRS LT16 gives you notice of pending enforcement action. It’s time to act now! Use this letter to prepare for the pending collection action. Use your Appeal rights to further protect your wages and property and to minimize your stress and strain.