The Internal Revenue Service (IRS) is required by law to remind United States taxpayers in writing about their overdue tax. The IRS Letter LT39 is a “Reminder of Overdue Taxes, Offset of Overpayment”. This simply means that a refund on the current year tax return of taxpayers was applied to the balance due on another tax year. Taxpayers however are still responsible for the remaining balance due for that tax year. This type of notice still falls under the category of “unpaid balance”. The IRS letter LT39 can also be called letter 3228.

REASONS WHY TAXPAYERS RECEIVE THIS LETTER

Here are the possible reasons why the IRS will send Letter LT39 to taxpayers. They include:

  • Taxpayers have a tax balance that was not paid by the due date.
  • The IRS sent at least one balance-due notice requesting payment of taxes owed, but the IRS never received payment.
  • The IRS LT39 is a tax reminder letter of overdue taxes.

If you agree with the IRS, you can pay the amount you owe immediately. If you don’t have the amount in full, you can contact the IRS to set up an installment agreement. This will help you settle your debt by making monthly payments to the IRS. The IRS will continue to charge interests and penalties until the balance you owe is paid in full.

NECESSARY STEPS TO TAKE IF YOU RECEIVE IRS LETTER LT39

Open the letter – If you receive IRS Letter LT39, open the envelope with care. Take a moment to read the letter in full. Look for the IRS Letter number below to find out what to do next. If you’re scared, confused, or need help, seek the help of a tax professional who has expertise in dealing with IRS Letters. You will find the IRS Letter number in either the top-right or bottom-right corner of the document you’ve received.

Respond by the due date – There is a due date associated with the IRS Letter LT39 that you received. Make sure that you meet that deadline. People who do not reply in time may be subject to interest and penalties. Additionally, you could lose your rights to appeal the IRS decision. Sending correspondence through certified mail costs more than a stamp, but those receipts prove that you responded by the deadline.

Pay the overdue tax amount requested by the IRS- If the IRS asks for a payment and you agree with the amount, pay it. Ideally, you will be able to pay the amount requested by the IRS. If you cannot pay the amount in full, pay as much as you can. This will minimize the interest and penalties that the IRS may charge you. The interest and penalties charged by the IRS may be higher than the rates found on personal loans.

Keep copies of important information – It is important that you keep all of your documents together in a safe place. If you’ve received the IRS Letter LT39, create a file that contains the letter, all correspondence, and any supporting documents together. This will come in handy for future replies or if you need to involve a tax professional or representative to help you with your tax situation.

Seek the help of a tax professional – If you think you may be in trouble with the IRS, seek help from a tax expert. This is particularly important if there is a risk if the IRS may consider your behavior as tax evasion or fraud. It’s also smart to get advice from tax professionals when you can’t afford to repay your tax debt. There are many tax relief programs that can help you reduce your tax liability. One of them is the Offer in Compromise where you may be eligible to pay less than what you owe. The tax professional can help you choose which option is best for your situation and request it from the Internal Revenue Service (IRS).

 

DOCUMENTS TO PREPARE WHEN YOU RECEIVE LETTER LT39

The following documents should be organized before seeking a tax professional to help you deal with the IRS.

  • Prepare copies of your IRS letters and notices, especially the most recent ones, on the tax years and balances owed.
  • If you think you’re in a financial hardship situation and you can’t pay the full amount in six years, you’ll need to bring in financial information, such as your bank statements, receipts for housing and medical expenses, and other household expenses.
  • If you have a levy in place, bring your employer’s and/or financial institution’s contact information (name, address, phone and fax number).
  • Also prepare a copy of your tax returns for the years that you owe taxes.

For those wishing to set up an installment agreement with the IRS, it may take longer for the IRS to consider you if you fall owe more than $50,000 or you can’t pay the full amount owed within six years. It will also be difficult if you are requesting for a currently not collectible status or an offer in compromise.

If taxpayers don’t comply and pay their overdue taxes, enforced collection action may be taken to collect the amount they owe, including the filing of a Notice of Federal Tax Lien, or garnishment of their wages and/or bank accounts. A lien is a public notice to the creditors of taxpayers that the government has a right to their interests in their current assets and assets they acquire after the IRS files the lien. This can affect the ability of taxpayers to obtain credit in the future.

According to the IRS, if the amount owed by taxpayers includes a shared responsibility payment, the law prohibits the IRS from using liens or levies to collect that portion of your liability.

LETTER DEADLINE: 10 days from when the letter was sent to you. If you miss the deadline and you don’t provide payment or establish a payment agreement within 10 days, the Internal Revenue Service will increase the penalty and pursue other enforcement action. Penalties and interest will continue to accumulate.