LT36: IRS Notice for Federal Employees With Unpaid Taxes

In the spring of 2025, the IRS began sending Notice LT36 to current and former federal employees. Like many other IRS collection notices, this one demands payment and threatens escalation if the taxpayer doesn't respond, but it also goes a step further and cites federal employees' legal responsibilities under the U.S. legal code. 

Because this is a new notice, many tax professionals aren't sure what steps the IRS may take next, and the IRS has not yet published any guidance about this notice. But there are tax codes and legal precedents that can help predict what's likely to happen after you receive this notice. 

The tone of the notice is somewhat alarming, and if you've received an LT36, you should either pay the balance in full immediately or reach out to a tax professional for help.

What is IRS Notice LT36?

This is a collection notice that the IRS sends to current and former federal employees. It states that they must pay their taxes or file unfiled returns. 

What to do if you receive Notice LT36

To avoid escalation, you should pay your taxes in full or contact the IRS to make arrangements for the tax debt. The IRS's main payment options include:

• Installment agreements – Pay off tax debt in monthly installments for up to 10 years after the original due date or assessment date. 
• Offer in compromise – Prove that you cannot afford to pay the full bill using your disposable income or assets, and qualify for a settlement for less than owed. Federal employees may face certain restrictions when applying for this program, which is why it's critical to work with a tax pro who has experience representing federal employees in particular. 
• Currently non-collectible – Establish that you can't afford to pay anything and get the IRS to stop collection actions. This option may not be available to current federal employees, but it may be a possibility for former or retired employees. 

If you believe that you have received this notice in error, you should call the IRS directly at the number on the notice – (800) 829-7650. Possible errors may include incorrect calculations, misapplied payments, notices sent to the wrong taxpayer, tax liabilities created through identity theft, and other IRS errors. 

What if you ignore this notice?

If you ignore this notice, the IRS will move forward with additional enforcement actions. That may include issuing a tax lien against your assets, garnishing your wages, and seizing your assets. The IRS may also be able to garnish your federal pension and/or Social Security payments if you are retired. 

However, as a federal employee, you may face even more consequences – in particular, your job may be at risk. If you're worried about that, make payment arrangements as soon as possible to avoid adverse reactions. 

Risks of having unpaid taxes when you're a federal employee

Just like other taxpayers, federal employees risk facing wage garnishments, asset seizures, and other consequences of unpaid taxes. However, due to your job with the government, you may also face the following potential problems:

• Loss of security clearance – Depending on your role, you may risk losing or damaging your security clearance if you don't pay your taxes or if you file incorrect returns or no returns at all. 
• Termination – In some cases, not meeting your tax obligations can put your job at risk. 
• Reputational harm -- Liens are public record, which can hurt your reputation. Additionally, if you ever lose your job or security clearance due to your tax situation, that can follow you throughout the rest of your career.

What is the QR code on Notice LT36?

The QR code will take you to the IRS webpage where you can set up an online account. If you already have an ID.me account, you can use that to sign in. Once you're in, you can see which returns you've filed, how much you owe, and any tax documents that were filed in your name over the last 10 years – for example, W2s from employers or 1099s from payers. 

If you owe less than $50,000, you can also create a simple payment plan from your online account. To do so, you must be current with all filing obligations and quarterly estimated tax payments if applicable. 

FAQs about IRS Notice LT36

Here are some other questions federal employees might have after receiving this notice. As of spring 2025, the IRS announced that it would be sending this notice to over half a million federal employees. If you are one of them, here's what you need to know.

What is 5 CFR 2635?

The Notice cites Title 5, Chapter 14, Subchapter B, Part 2635 of the US legal code, which covers the standards for ethical conduct for employees of the executive branch. The notice briefly touches on this part of the law by stating that federal employees have a legal obligation to pay their financial obligations to the government. The notice also says that federal employees should lead by example. 

This part of the code outlines a list of ethical requirements for federal employees, including not using public offices for private gain, disclosing waste and fraud, and satisfying their obligations to pay federal, state, and local taxes. 

Can I get fired if I don't pay my taxes?

Possibly. Although the notice doesn't directly state that you will be fired if you don't pay your taxes, termination may be a risk. If you don't pay your taxes, you are not meeting the legal requirements of your duty as a federal employee, and theoretically, the government could use that as a justification to terminate your employment.

The code states that employees are "on notice" with these statutes. That means that the code, itself, serves as notice of these requirements – you are bound to the terms, whether you're fully aware of them or not. 

Did DOGE send LT36?

At the time of writing, there is no indication that the Department of Government Efficiency (DOGE) is involved with the IRS LT36 letter. However, at the time of writing, DOGE is still analyzing federal departments for efficiency, and their efforts have led to job losses of tens of thousands of government workers. 

Does LT36 mean I'm going to be arrested?

No. LT36 does not mention anything about tax crimes or prosecution. However, you should still move forward carefully and talk with an attorney about the potential legal ramifications of this notice and your unpaid taxes. 

According to a LinkedIn post from Gabaie & Associates, LLC, dated one year before the publication of this post, LT36 may indicate a risk of criminal prosecution.

When will the IRS seize my assets?

The IRS will not seize your assets immediately after sending you Notice LT36. However, the agency can seize your assets once it sends a Final Intent to Levy notice – that gives you 30 days to appeal or set up payments, and if you don't respond within that window, the agency can move forward with the seizure. 

However, there are a few exceptions to the 30-day rule. Namely, if the IRS thinks that the tax collection is in jeopardy, the agency can move forward with a levy without warning. Additionally, the agency has the right to levy (seize) federal contractor payments without warning if you have unpaid taxes.

I'm a federal employee with unpaid taxes – why haven't I received this notice?

If you are a federal employee with unpaid taxes or unfiled returns and you haven't received this notice, it may be because the IRS has sent you other notices, or the agency's automated collection system may not have adequate information to determine that you both owe taxes and are employed by the federal government. Finally, you may have missed the notice because it was sent to your last known address, and you moved. 

In all cases, it's critical to be aware that the government is focused on federal employees with outstanding tax liabilities, and even if you haven't been contacted, you should proactively make arrangements for your tax debt. 

Find help now

To get help now, use TaxCure to find a tax pro who has experience representing clients with unpaid taxes. This site lets you search for reputable tax pros and narrow down your search results to find someone with the right experience. Then, you can review their profiles and contact them to see if they have experience representing current or former federal employees. 

Don't put your career, your assets, or your reputation at risk – use TaxCure to find a tax pro today.