IRS Notice · LT16 · Balance or Missing Return

LT16: what the IRS is actually asking you for

An LT16 means the IRS wants payment, a missing return, or both. Here's how to tell which, and why the answer changes what you should do.

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An LT16 can be about an unpaid balance, a return the IRS never received, or both at once — and which one it is changes everything about what you should do.

If you are licensed in Kentucky, read this first. Under KRS 131.1817 a taxpayer who has not filed a required return within 90 days of the due date, after department contact, is a delinquent taxpayer regardless of whether any money is owed — and that status reaches professional and occupational licenses, attorney licenses, and vehicle registration. A Kentucky nurse, realtor, contractor or attorney with a zero balance can still lose a license over unfiled returns. There is no federal equivalent. The full note is further down.

Before anything else: read your letter and work out whether it is asking for money, for a return, or for both. This is the one notice in the collection sequence that can be either, and people routinely respond to the wrong half — sending a payment when what the IRS is missing is a form, and then not understanding why the letters keep coming. A balance you can pay off. A missing return you cannot.

(800) 236-3741, or (502) 658-6328 locally — answered 24 hours a day, seven days a week. After hours you reach our AI receptionist, not voicemail — it answers the common questions, takes your details, and books you the first available thirty minutes. During office hours you reach the office directly, in Georgetown.

The first call is free. Thirty minutes. No obligation, no conditions, no strings. Book a time →, or call the numbers above.

In thirty minutes you will know which half of the letter applies to you, how many years you actually have to file — usually fewer than people assume — and whether the IRS has already filed a return on your behalf.

Every case here is reviewed and worked by Katherine personally. Not a processing department, and not a case manager relaying messages from someone you never meet.

Key takeaways

•The IRS's own description: an LT16 arrives "because we're trying to collect unpaid taxes from you and/or our files show we're missing tax returns from you."
•It is a collection escalation letter, not a Final Notice. It does not carry Collection Due Process rights and it does not include Form 12153.
•If returns are missing, paying money does not resolve it — and almost no other option opens until they are filed.
•The IRS's language is direct: it says it is essential to take action to avoid enforcement, which can include seizing assets or wages.
•This is the notice in the family most likely to be resolvable without professional help.

What an LT16 is

An LT16 is a collection letter that can be about two different problems. The IRS: “If you received a simple LT16 notice, it's because we're trying to collect unpaid taxes from you and/or our files show we're missing tax returns from you.”

The and/or is not vagueness — it is the notice's actual scope. Some LT16s go out on a balance. Some go out because a required return has not been received. Some go out on both.

It sits before the Final Notice in the sequence, not after it. The IRS's warning is that failing to act risks enforcement, which “can include seizing your assets or wages.” That is a description of where the sequence leads, not a statement that a levy is imminent. Before the IRS can levy wages or a bank account, it still has to send the Final Notice carrying your hearing rights — an LT11, Letter 1058 or CP90.

Your clock

There is no statutory deadline on an LT16, and the date to work to is the one printed on your letter.

We are not going to give you a day count. The IRS deliberately does not publish one for most notices, because the operative date is printed on the individual letter and varies by account — a generic number would be less accurate, not more.

One thing to be clear about, because it cuts the other way. The letter refers to being entitled to a hearing with the Office of Appeals and points you at Publication 1660. That is a general signpost to your appeal rights, not the conferral of a Collection Due Process right, and an LT16 is not a notice that starts a 30-day CDP window. LT16 does not appear on the Taxpayer Advocate Service's list of notices carrying those rights. The letter that starts that clock is the Final Notice, and it has not arrived yet.

Sources: IRS, “Understanding your LT16 notice”; Taxpayer Advocate Service. Reviewed 27 August 2026.

Work out which problem you have

If the letter says	The problem is	What actually resolves it
An amount is owed	A balance	Payment, or a payment plan, or a hardship determination
A return has not been received	A filing gap	Filing the return — and only that
Both	Both, in that order	Filing first. Almost nothing else is available while returns are missing

The ordering in the last row is the useful part of this page. A payment plan, currently not collectible status and an Offer in Compromise all require required returns to be filed. Sending money into an account with a filing gap resolves an amount and leaves the reason for the letters untouched.

What to do

1. Identify which half applies.

The letter says. It is worth reading twice, because the two halves get skimmed together.

2. If a return is missing, find out how many years are actually involved.

People frequently assume it is worse than it is, and the number of years you need to file is a narrower question than “every year I missed.” How many years of unfiled returns you really have to file →

3. Pull the transcripts before filing anything.

Free, and you can request them yourself. Wage and income transcripts show what was reported to the IRS about you, which is most of what an old return needs. Reading them is the harder part, and for a non-filer it answers the question people most dread asking: how many years are actually involved. It is usually fewer than you think.

4. Check whether the IRS has already filed a return for you.

If it has, the balance is almost always higher than it would be had you filed, because a return prepared on your behalf gives you no deductions you did not claim. That is a fixable problem and a different one.

5. Respond even if you cannot pay.

The thing an LT16 is trying to establish is whether this account is going to engage. A response that says “I cannot pay and here is why” moves the file. Silence moves it too, in the other direction.

The 30-Day Levy Response Checklist

This is not the stage the checklist is written for, and that is deliberate: it covers the Final Notice, which is two letters further along than you are. If your LT16 is about a balance rather than a missing return, it is the map of where this goes if nothing changes. It asks for a first name and an email address. These sheets carry dated figures, and the list is how a correction reaches you when one of them changes.

[ Download the checklist → ]

Working out how many years you actually have to file takes one call, and it is usually fewer than people expect. (800) 236-3741, or Book thirty minutes →.

Katherine M. Johnson, CPA, CTRS

Katherine M. Johnson is a licensed CPA with over 30 years of experience and a Certified Tax Resolution Specialist (CTRS). She personally handles every case — representing individuals and businesses before the IRS and state revenue departments nationwide.

Read full bio

What happens if you do nothing

It escalates, and which way depends on which half of the letter applies to you.

If it is a balance: the sequence continues toward a Final Notice of Intent to Levy — the letter that carries a 30-day hearing right and is the last one before the IRS can levy. You are two letters away from that, not zero. But the letters keep coming and the balance keeps growing.

If it is a missing return, doing nothing is worse and slower to fix. The IRS eventually files one for you. A Substitute for Return is prepared from the income reported about you, with none of the deductions you did not claim, so the balance it produces is almost always higher than the real one — and then you are arguing a number down instead of filing a return. That is a different and harder problem than the one you have today. What happens when the IRS files a Substitute for Return →

And if you are licensed in Kentucky, the filing half runs on its own clock under KRS 131.1817, which does not care what you owe.

The Kentucky note

If returns are the problem rather than the balance, Kentucky is where it gets more serious rather than less, and that surprises people.

KRS 131.1817 makes a taxpayer “delinquent” for failing to file a required return within 90 days of the due date after department contact — regardless of any balance owed. That status reaches professional and occupational licenses issued by state licensing agencies, and vehicle registration. The department must give at least 20 days' notice by certified mail before submitting a name to a licensing agency, and once a license is affected it is not reissued or renewed until a written tax clearance has been received from the department.

A Kentucky non-filer with no money owed can still be a delinquent taxpayer under that statute. There is no federal equivalent. How a Kentucky balance and an IRS balance interact →

Sources: KRS 131.1817 (as amended 27 June 2025), Kentucky Legislative Research Commission. Reviewed 27 August 2026.

What we see

A great many of the LT16s that reach us turn out to be about a form rather than about money, and the person has usually already tried to fix it by sending a payment. So the first thing we do is read the letter itself for which half it names, and then pull the wage and income transcripts to see how many years the IRS is actually missing — which is regularly a shorter list than the one people have been carrying around in their heads. The misconception underneath almost all of these is that a balance and a filing gap are the same problem with the same fix. They are not, and nothing else opens until the filing half is closed.

Katherine — this needs your version of what actually walks in with an LT16; two sentences from your own files will do it.

When an LT16 is more serious than it looks

The general case is above: identify which half applies, and act on that half. Four situations change it.

If a return is missing and the IRS gets tired of waiting, it will file one for you. A Substitute for Return is prepared from the income reported about you, with no deductions you did not claim, so the balance it produces is almost always higher than the real one. That is a different and worse problem than the one you have now, and it is the reason the filing half of an LT16 is more urgent than the paying half even though it feels less so. What happens when the IRS files a Substitute for Return →

If you cannot pay, asking for a payment plan is itself protective. Section 6331(k) of the tax code bars levy while a request for an installment agreement or an offer in compromise is pending, for 30 days after a rejection, during an appeal of that rejection, and while an agreement is in effect. You are not at the levy stage yet — but the request is what keeps you from arriving there, and it is available now.

Two limits travel with it, and at this early stage neither is likely to be your problem. Section 6331(k)(3) borrows the exceptions in section 6331(i)(3), so the bar gives way where the IRS finds collection is in jeopardy, and it does not stop a federal refund being taken as an offset under section 6402. And a pending request suspends the ten-year collection period — the price of the protection, and it belongs in the decision.

If the balance is old, find out how old. The IRS generally has ten years from assessment to collect, and each year carries its own clock. On an old account that question can change the answer entirely, and it is on the transcript rather than on the letter.

If you have several unfiled years and a business, the order of operations changes what you end up owing, and getting it wrong is expensive. That is the situation named at the end of this page.

From Katherine

I have sat with a lot of people who had stopped opening the envelopes, and not one of them ever decided to become a non-filer. It is nearly always one hard year, and then the next one is harder to face than the last, until the pile in the drawer becomes its own reason not to start. Arriving here late is the ordinary way people arrive, and it is not what I am going to spend the thirty minutes on — the years, the transcripts and the order to do them in is.

Katherine — You're welcome to modify the paragraph above in your words.

Which LT16s need help, and which don't

An LT16 is an early letter, and most of them do not need us. If it is a balance you can pay, pay it. If it is one missing return and you have the paperwork, file it. If it is a balance you cannot pay in full, the IRS's own payment plan application is online and a lot of people complete it without help.

Get advice if any of these is you, though — and any one is enough:

You have more than one unfiled year. The order you file them in changes what you end up owing, and the wrong order is expensive.
A business is involved. Personal and business exposure interact, and payroll tax follows individuals personally.
The IRS has already filed a return for you. A Substitute for Return gives you no deductions you did not claim, so the balance it produces is almost always higher than the real one. That is fixable and it is a different job.
The balance grew from penalties on something that was once manageable.
You are licensed in Kentucky — see the note above. A zero balance is not protection.

If you are not sure which of those you are in, that question takes one phone call and obliges you to nothing. (800) 236-3741, or Book a time →.

Where this sits in the sequence

Notice	What it is
CP504	If a balance is the problem — the notice of intent to levy.
▶LT16You are here	The IRS wants payment, a missing return, or both — a collection escalation letter before the Final Notice.
LT11	The Final Notice that would come later, carrying your hearing rights.

If a balance is the problem: CP504 — notice of intent to levy → The letter that would come later, with your hearing rights: LT11 — the Final Notice → If returns are the problem: Unfiled back tax returns → All notices: The IRS notice index →

Frequently asked

Is an LT16 serious?

It is a real collection letter and it is not the last one. It is not the Final Notice — the IRS still has to send that, carrying your hearing rights, before it can levy wages or a bank account.

Can I appeal an LT16?

It is not a notice that starts a Collection Due Process window and it does not include Form 12153. The letter points you at Publication 1660 for your appeal rights generally, and the letter that confers the 30-day right is the Final Notice.

I paid the balance and got another letter. Why?

The most common reason is that the letter was about a missing return as well as a balance, and paying resolved one half. Check which of the two your letter names.

What if I can't file because I don't have the records?

Wage and income transcripts show what was reported to the IRS about you, and for most people they cover most of what an old return needs. That is usually a smaller problem than it feels like.

If you'd rather not work it out alone

We handle IRS collection and filing matters for individuals and small businesses from our office in Georgetown, Kentucky. If an LT16 has arrived and you are not sure which half of it applies to you, we can usually work that out from the letter itself — and often the answer is that it is a single form and you should just file it. That answer is free and you can have it in the first call.

The first call is free. Thirty minutes. No obligation, no conditions, no strings. You will come away knowing which half of the letter applies to you, how many years you actually have to file — usually fewer than people assume — and whether the IRS has already filed a return on your behalf. You do not need paperwork organized: most people who arrive here with unfiled returns have nothing organized, which is normal and is not the obstacle it feels like.

Call (800) 236-3741, or (502) 658-6328 locally — or Book a time →. The line is answered 24 hours a day, seven days a week, so if it is late and you have just opened the envelope you can start tonight. After hours you reach our AI receptionist rather than voicemail — it answers the common questions, takes your details, and books you the first available thirty minutes. Katherine works the account herself.

Call (800) 236-3741 Book a Consult

This article is general information, not tax advice for your situation. Every account is different, the options described here are not available to everyone, and no outcome is guaranteed. Next Level Tax Resolution is not affiliated with the Internal Revenue Service or any government agency.

The NLTR Office ·

Reviewed by Katherine M. Johnson, CPA, CTRS