The IRS will send out Notice LT16 when the agency believes a taxpayer hasn't filed their tax return or has unpaid taxes. Regardless of what they think they have or haven't done, taxpayers should respond to the notice. Failure to communicate with the IRS could result in continuing action against the taxpayer and limit their options for resolving the issue.

Taxpayers should read the notice carefully to find out what the IRS believes is missing and make note of all deadlines. If taxpayers believe they have filed their tax return and are current on paying their taxes, they should contact the IRS to verify that the IRS received both. If a taxpayer submitted their tax return over ten weeks before receiving the notice, they may need to resubmit a paper copy of their tax return.

Missing Tax Returns and Unpaid Taxes

When taxpayers haven't filed a return or paid their taxes, they need to respond before any deadlines to avoid accruing additional penalties. If possible, they should file their return and pay all unpaid taxes before the deadline.

In situations when a taxpayer believes they aren't required to file a tax return, they should contact the IRS to resolve the issue. If a taxpayer has multiple years of missing tax returns, they'll need to file a return for each missing year. A single return isn't sufficient.

Financial Hardship and Unable to Pay the Full Amount

In some cases, a taxpayer may not have the financial resources to pay the taxes they owe. In these situations, taxpayers shouldn't avoid responding but instead communicate with the IRS to find a resolution. Missing deadlines and not communicating with the IRS may close some avenues for resolving the issue.

Taxpayers should pay what they can. This will reduce penalties and interest.

For any amount a taxpayer cannot pay, the IRS has options for resolving the outstanding debt. Payment plans, offers in compromise, and other solutions are available, and an experienced tax attorney can help you determine the best option for your situation.

If you have questions about resolving tax issues with the IRS, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.