LT16: Pay Your Overdue Taxes or File Your Missing Returns

Why you might get this

• You have an unpaid tax balance the IRS is trying to collect.
• The IRS's records show one or more of your tax returns are missing.
• Both of the above may apply — you may owe money and have unfiled returns.

The deadline

Act by the date printed on your notice. Taking action before then can stop the IRS from moving forward with collection. If you already paid in full, note that payments can take up to about three weeks to show on your account, so a recent payment may explain the notice.

This notice doesn't carry a fixed response deadline, but it still deserves attention — see what to do below.

What to do

1. Read your notice carefully to see exactly what you owe and which returns (if any) are missing.
2. File any missing tax returns as soon as you can — you may need to file for more than one year.
3. Pay your balance in full online if you can; this stops more interest and penalties from adding up.
4. If you can't pay it all, pay what you can now and set up a payment plan (installment agreement) — you must be current on your filings to apply.
5. If you already filed a return they say is missing and it's been over 10 weeks, send a signed copy again.
6. If money is very tight, ask about 'currently not collectible' status or an Offer in Compromise to settle for less.
7. If you disagree with the amount, you can request a hearing with the IRS Office of Appeals or call the number on your notice.

What happens if you ignore it

The IRS may take enforcement action, which can include seizing your assets or wages, or filing a federal tax lien (a legal claim on your property) that could hurt your credit and ability to borrow. Interest and penalties also keep growing until you pay in full.

If this debt is causing real hardship, or you've tried and can't resolve it with the IRS, the Taxpayer Advocate Service (TAS) offers free help — call 877-777-4778. Low Income Taxpayer Clinics may also assist. Consider a tax professional if you have several missing years or a large balance.

What an LT16 notice means

An LT16 notice is the IRS letting you know they're trying to collect unpaid taxes, that they're missing one or more of your tax returns, or both. It's a serious reminder, but you still have time to fix things.

Start by reading the notice closely so you know the exact amount owed and which returns are missing. If returns are missing, file them as soon as possible — even if you're due a refund, you usually have to file to claim it. If you owe money, paying in full online stops extra interest and penalties from piling up.

Can't pay everything right now? Pay what you can and set up a payment plan (an installment agreement) for the rest. If you're facing real financial hardship, you may qualify for a temporary collection delay or an Offer in Compromise to settle for less. And if you think the amount is wrong, you can appeal.

Ignoring the notice can lead to liens or seized wages and assets, so it's best to respond by the date printed on your letter.

Solace can keep an eye on your IRS account so you catch changes early and know where you stand.