LT38 Special Reminder Letter - Essential Guide to Notice Resumption

As we begin 2024, it’s crucial for taxpayers and tax professionals to be aware of significant changes in the IRS’s collection process. At Corridor Consulting, we understand the importance of staying informed and prepared for these changes. Here’s what you need to know about the IRS’s resumption of automated collection notices.

Understanding the Resurgence of IRS Notices

The Pause and Resumption of Automated Notices

In response to the challenges posed by COVID-19, the IRS had paused its automated collection notices back in 2022. However, this February marks the resumption of these notices. If you’ve been wondering why you haven’t heard from the IRS regarding past due taxes, you might be receiving a notice soon.

Introduction of the Special Reminder Letter, LT38 – Reminder, Notice Resumption

The IRS has begun issuing the Special Reminder Letter LT38 as of January 2024. This new notice informs taxpayers that automated collection notices, which were on hold, are now set to resume. It’s important to understand that the LT38 is part of the IRS’s effort to lessen the administrative burden and provide clarity to taxpayers.

Impact on Taxpayers and Tax Professionals

Accrued Penalties and Interests: Despite the pause in automated reminders, initial balance due notices were still mailed, and penalties and interest continued to accrue.
Schedule Changes: The schedule for automated CP series notices has been extended from 5 to 8 weeks, starting from January 2024. This change aims to improve the taxpayer experience and give additional time for resolving balance issues.
Gradual Approach: The IRS is taking a gradual approach in sending out the new LT38 notices, adjusting the volume based on operational needs. This strategy is intended to ensure that taxpayers can effectively resolve any issues.

What Does This Mean for You?

Receipt of Notices

If you received a CP501, CP503, or CP504 for 2022 taxes, expect to receive an LT38 notice soon, if you haven’t already.
For tax years 2021 and earlier, anticipate an LT38 for each tax year.

Action Steps

You should contact the IRS, and resolve your overdue tax debt, utilizing the tools included in the LT38 letter such as:

Using the QR Code to allow you to quickly access your account, make a payment, and apply for a payment plan (PLEASE make sure your notice is a legit IRS notice, before using the QR Code)
Discuss options with the IRS in case you cannot pay in full. You can contact them at IRS.GOV. It is possible they may delay collection efforts for your situation.

Important Timeline:

Once an LT38 is issued, the IRS will follow up after 35 days if there’s no response from you, the taxpayer. The next notice might be a CP500 series notice or another type, depending on the specific circumstances of the taxpayer. Collection efforts may not stop there, and could include action to levy or efforts to put a lien on your property.

Staying Informed and Prepared

At Corridor Consulting, we emphasize the importance of being well-informed and prepared for these changes. This information is based on a recent webinar presented by the Directors of Collection at the IRS, titled “Navigating Through the Restart of Automated Collection Notices and Penalty Relief.”

We understand that navigating tax issues can be complex and stressful. Our team is here to help you understand these changes and guide you through any necessary actions. Don’t hesitate to contact us for assistance with your tax concerns.

Stay informed, stay prepared, and let Corridor Consulting be your guide through the complexities of tax compliance.

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