IRS Notices
IRS LT38 Notice: What It Means, Your Deadline, and What to Do (2026)
The short answer: an LT38 notice is the IRS's reminder that you still owe a balance from an earlier tax year — and that its automated collection notices, paused during the pandemic, have restarted. It's not a final demand and nothing is being seized yet, but the balance, plus interest, is printed on the notice and it's time to act.
⏱ Your deadline: the "pay by" date printed on the notice — usually about 21 days from the notice date. Interest and any monthly late-payment penalty keep accruing after that date, and the IRS's automated system moves your account back into its active collection sequence.
Why you got an LT38 notice
An LT38 notice means the IRS has a balance due on your account from a prior year and is reminding you that it's still open. During the pandemic the IRS temporarily stopped mailing many of its automated reminder notices. When it restarted them, the LT38 became the "we're back in touch" letter for taxpayers whose balances had been sitting quietly in the system.
So the mail went silent — but your balance never did. Interest kept compounding the entire time. The notice shows the tax year, the amount the IRS says you owe, and how it splits between tax, penalties, and interest. The IRS explains the underlying account on its online account for individuals page, where you can confirm the figures yourself.
One thing an LT38 is not: an audit. Nobody is questioning your deductions. This is a reminder of a bill — and like most bills, it's cheapest to handle early.
Did the IRS waive my penalties?
Because reminder notices were paused, the IRS granted automatic failure-to-pay penalty relief to many taxpayers for the 2020 and 2021 tax years. If you qualified, that relief should already be baked into the balance shown on your LT38 — you don't have to ask for it.
Two things to keep in mind: the relief covered the failure-to-pay penalty, not interest, and it didn't erase the underlying tax. So even with the waiver applied, there's usually still a real balance to resolve. You can read the IRS's own summary on its failure-to-pay penalty page.
What happens if you ignore it
The LT38 reminder restarts the clock. Ignore it, and your account moves back into the IRS's automated collection sequence — and each notice that follows arrives with more interest attached and more enforcement power behind it:
- LT38 — reminder notice. You are here. No enforcement yet, but the balance is active again.
- CP501 / CP503 — reminder notices. Still bills, but the balance keeps growing monthly. See our CP501 notice guide and CP503 notice guide for what each one means.
- CP504 — Notice of Intent to Levy. The IRS can now seize your state tax refund, and a federal tax lien becomes a real possibility. Our CP504 notice guide walks through it.
- LT11 / Letter 1058 — Final Notice of Intent to Levy. After 30 days, the IRS can garnish wages and levy bank accounts. You have formal appeal rights at this stage — but far fewer good options than you have today.
Here's the part that catches people off guard: the IRS is short-staffed, but the notices, liens, and levies are issued by automated systems that don't take days off. The machine keeps escalating whether or not a human ever looks at your file.
First: make sure the LT38 is actually right
Old balances are exactly the kind that get tangled up — payments applied to the wrong year, returns the IRS thinks are missing, penalty relief that should have lowered the number. Before paying anything, spend ten minutes checking:
- Log into your IRS online account and compare the balance there with the notice. Confirm the penalty relief was applied.
- Match the notice against your return — same tax year? Same amounts? If you paid years ago, find the confirmation and check whether it posted to the right year.
- Screen for scams: a real LT38 arrives by postal mail, never email or text. Real IRS payments go only to the United States Treasury or through IRS.gov. Anyone demanding gift cards, wire transfers, or payment apps is a criminal, not the IRS. If you're unsure, our guide on how to tell if an IRS letter is real walks through the checks.
If the notice is wrong, respond with documentation — proof of payment or the corrected figures. Don't pay a balance you don't owe on the assumption the IRS will sort it out later.
If you can't pay in full: your real options
The notice frames it as pay or else. In reality the IRS has several programs, and which one fits depends on your finances:
- Short-term payment plan — up to 180 extra days to pay in full. No setup fee. Interest and penalties continue, but enforcement stops.
- Installment agreement — a monthly payment plan (details on the IRS payment plans page). For balances under about $50,000, "streamlined" agreements can usually be set up without detailed financial disclosure, spread over up to 72 months.
- Currently Not Collectible status — if paying anything would create genuine hardship, collection can be paused while your situation improves. The debt remains, but garnishments and levies stop.
- Offer in Compromise — settling for less than the full balance. Real, but only when your assets and income genuinely can't cover the debt; the IRS runs the math, not the marketing. An experienced tax professional can tell you whether you're actually a candidate before you spend anything pursuing it.
- Penalty relief — if you didn't already receive the automatic waiver, first-time penalty abatement can remove the failure-to-pay penalty when this is your first slip in years. Reasonable-cause relief may apply for illness, disaster, or other circumstances beyond your control.
One more reason not to wait: the IRS generally has 10 years from the date a tax is assessed to collect it (the Collection Statute Expiration Date). The pandemic pause didn't reset that clock for most accounts — which is part of why the IRS restarted these reminders. Acting now lets you choose your path instead of having one chosen for you.
How to respond, step by step
- Verify the balance against your IRS online account and your records (see above), and confirm any penalty relief was applied.
- If it's correct and you can pay: pay by the notice date at IRS.gov/payments — that stops penalties and the notice sequence immediately.
- If you can't pay in full: pick the option above that fits and set it up before the deadline. Even a payment plan you start today prevents everything that follows.
- If the notice is wrong: respond in writing with proof, and keep copies of everything.
- If you owe more than $10,000, have unfiled years, or just want it handled: get a professional review first — the order you fix things in (returns, penalties, then the balance) changes what you end up paying.
Holding an LT38 right now?
Send us a photo of it. An experienced tax professional will decode exactly where you stand and what your options are — free, confidential, no pressure.
LT38 questions, answered
Is an LT38 notice serious?
It's a reminder, not an enforcement notice — but the balance behind it is real and growing. Nothing is being levied or garnished at this stage. The danger is treating it as junk mail: the LT38 means automated collection has restarted, and the next notices in the sequence carry real enforcement power.
Why did I get an LT38 after years of silence?
The IRS paused its automated reminder notices during the pandemic and restarted them. The LT38 is how the IRS reconnects with taxpayers who still owe from an earlier year. The mail went quiet, but the balance never went away — and interest kept accruing the whole time.
What if I can't pay the amount on my LT38?
You have options the notice doesn't spell out: a short-term plan of up to 180 days, a monthly installment agreement, Currently Not Collectible status that pauses collection during hardship, or — when your finances genuinely qualify — an Offer in Compromise for less than the full balance. Penalty relief may also reduce what you owe.
Did the IRS waive penalties on my old balance?
The IRS granted automatic failure-to-pay penalty relief to many taxpayers for the 2020 and 2021 tax years because reminder notices were paused. If you qualified, that relief should already be reflected in the balance on your LT38. Interest was not waived, and the underlying tax is still due.
How do I know my LT38 isn't a scam?
A real LT38 arrives by postal mail — never by email, text, or social media. Any payment goes only to the United States Treasury or through IRS.gov, never gift cards, wire transfers, or payment apps. You can verify any balance yourself by logging into your account at IRS.gov before paying anything.
This guide is general information, not tax or legal advice for your specific situation. Eligibility for IRS programs depends on individual facts and circumstances; no outcome is guaranteed.