IRS Notice LT19 - Pay Your Outstanding Tax Returns
IRS notice LT19 (Pay Your Outstanding Tax Returns) is a demand for payment from the IRS. This notice is typically not the first notice most taxpayers receive if they owe taxes, and by the time you receive this notice, the IRS is getting serious about your tax liability. This guide explains what to expect if you receive IRS notice LT19.
What to Do If You Receive IRS LT19
IRS LT19 should tell you the year associated with your tax liability, the amount of your tax liability, and the deadline for submitting payment. Here are your options if you receive notice LT19 from the IRS:
- Detach the payment stub and mail the full payment.
- Pay your full balance on the IRS website.
- Request to have your penalties removed and then pay the remaining balance.
- Apply for a short-term payment plan and pay off your balance within 120 days.
- Set up a long-term payment plan and take up to 72 months to pay off your balance.
- Request an offer-in-compromise and settle your tax bill for less than you owe.
- Prove that you are having financial hardship so the IRS stops collection actions on your account.
- Appeal the incorrect information on your return.
Writing a check to pay your balance in full is the most straightforward option, but most people who receive LT19 don't have enough cash on hand to pay their balances in full. If you are in this situation, you are not alone, but unfortunately, setting up a payment plan or negotiating other arrangements with the IRS can be complicated.
To get the best result in your situation, you should consider working with a tax professional.
Why You Shouldn't Ignore LT19
You should not ignore LT19. Failure to respond to this notice can cause the IRS to escalate collection activities on your account. The agency has a lot of power to collect tax liabilities, and collection activity may include seizing your assets, seizing the money in your bank account, garnishing your wages, issuing a federal tax lien, or even taking your passport.
To give you a sense of the IRS's collection powers, consider that federal law only allows judgment creditors to garnish up to 25% of your disposable income. In contrast, the IRS uses its own guidelines to determine the wages it can garnish to cover tax liabilities.
For example, as of 2021, the IRS can garnish all earnings over $572 per week for a single person with four dependents. For a married couple with a single dependent, the IRS can garnish everything over $565 per week. Removing a garnishment once it has been applied can be very difficult.
What If You Don't Agree With IRS Notice LT19
Don't agree with the information on your LT19? Then, you need to proactively reach out to the IRS to correct the information. Here are some of the common issues you may have with the information on this notice.
Already Paid Tax Bill Noted on LT19
If you have already paid the tax liability noted on LT19, the IRS may not have received your payment yet, or the payment may have been lost in transit. Typically, the IRS takes about 21 days to process payments — if you sent your payment in the last 21 days, you can simply wait to see if the agency credits your payment.
Payments submitted over 21 days ago may have been lost. Contact your bank to see if the check you wrote to the IRS has been cashed. Alternatively, set up an online account to check if the IRS has received your payment or contact the agency directly using the information on the notice.
Incorrect Tax Liability Shown on LT19
The tax liability shown on LT19 will typically be more than the amount you owed when you filed your tax return. That is because the total amount shown includes penalties and interest. However, this notice usually explains which amounts are your original tax liability and which amounts are due to interest and penalties.
If the original tax liability shown on LT19 does not match your records, the IRS may have made a mistake, and you may need to appeal the information on this notice. A skilled tax professional can help you through the appeal process.
Tax Noted on LT19 Is Spouse's Fault
The IRS considers both spouses jointly responsible for the information reported on their tax return when they file jointly, but there are exceptions to this rule. In rare cases, you may be able to qualify for innocent spouse relief.
Already Set up Payment Plan for Tax on LT19
If you receive LT19 but you have already set up a payment plan, you should continue making payments on your account as outlined in your agreement. The IRS may have sent this notice before your payment plan officially started.
If you have applied for a payment plan but it has not been approved yet, check to see if you submitted your application for a payment plan before the date the notice was issued. The IRS may have issued notice LT19 before it had a chance to review your payment plan application.
Tax Liability on LT19 Due to Identity Theft
In some cases, the tax liability shown on LT19 may be due to identity theft. In this situation, contact the IRS and let the agency know that you were the victim of identity theft. They will work you through the process of freezing your account.
If you disagree with other information on your LT19 notice, you should reach out to a tax professional. They can help you identify the best steps forward in your situation.
What Does the QR Code on LT19 Do?
In 2021, the IRS began adding QR codes to many of the notices it sends out, and these QR codes are designed to help taxpayers navigate their options more effectively.
When you scan the QR code with your phone, part of the IRS website will open on your phone. Notice LT19 should tell you what links you can open with the QR codes on the letter.
How to Deal With IRS Notice LT19
You should not ignore LT19. If you owe a tax liability to the IRS, you should reach out to the agency proactively. You will always get a better result if you contact the IRS, rather than waiting for the agency to contact you.
We can help you find a tax professional who will guide you through working with the IRS. At TaxCure, we have an extensive directory of tax professionals from around the United States, who focus on different aspects of tax liability resolution. Let TaxCure help you find a tax professional today.