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What is an IRS LT-38 Letter?

IRS Letter LT38: Understanding and Response The IRS Letter LT38 is a reminder notice sent by the IRS’s Automated Collections System to taxpayers with outstanding balances or who have not filed tax returns. This letter signifies the resumption of collection activities by the IRS after a pause during the COVID-19 pandemic.

Here is a breakdown of what the LT38 letter entails and how to respond if you receive one:

Key Points about IRS Letter LT38:

  • Purpose: The LT38 serves as a reminder to taxpayers about their balance due with the IRS and the need to take action to resolve it.
  • Deadline: The letter includes a deadline for taxpayers to pay off their balance or explore tax relief options. Failure to meet this deadline can lead to enforced collections activities like wage levies.
  • Minimum Balance: There is no specific minimum balance requirement for receiving an LT38; taxpayers with varying balances may receive this notice.

Response Steps for Receiving an LT38:

  • Review for Accuracy: Check the LT38 letter for any errors in the IRS’s calculations and ensure accuracy of the information provided.
  • Correct Errors: If discrepancies are found, address them with the IRS using the contact information provided in the letter.
  • Payment Options: Explore different payment options if you cannot pay the balance in full, such as setting up an installment agreement, making an offer in compromise, or applying for Currently Not Collectible (CNC) status.

Penalty Relief: Individuals and businesses owing less than $100,000 in assessed tax from 2020 or 2021 qualify for automatic penalty relief, where penalties are waived automatically without the need for application.

Additional Information:

  • The LT38 letter provides a billing summary detailing assessed balances, accrued interest, and penalties by tax period.
  • Taxpayers can access their IRS Online Account information through the LT38 letter, allowing them to view owed amounts by year, payment history, and tax records.
  • If facing difficulties in paying off the balance, taxpayers have various options available, including installment agreements and other relief programs offered by the IRS.

In conclusion, receiving an IRS Letter LT38 signifies the need for prompt action to address outstanding tax obligations or explore relief options provided by the IRS. It is crucial for taxpayers to carefully review the letter, verify its contents, and take appropriate steps to resolve any issues to avoid potential enforced collections by the IRS.

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Don’t be a victim to the collection powers of the IRS and state collections division. We are experts in securing permanent financial protection from the government. Call us at 888-589-0955 for a free consultation. In a few minutes, we will help you to assess your options.