For most people, a letter from the IRS brings anxiety and uncertainty – the situation can be even more stressful if you work for the federal government and may be at risk of losing your job for unpaid taxes.
If you’re one of the thousands of federal employees or retirees who have recently received LT36, take a few minutes to learn more about what this notice means, what the IRS expects you to do next, and how to avoid more aggressive collection efforts. Or to get help now, contact us at Wiggam Law today.
Key Takeaways
- The IRS sends LT36 to federal retirees and employees who have fallen behind on their taxes, whether they have not filed at all or have not paid.
- If you do not respond, the IRS may escalate the issue to your employer.
- Federal employees may face disciplinary action or the loss of promotions due to tax noncompliance.
- Working with a tax professional can help you get caught up.
The Federal Employee/Retiree Delinquency Initiative
The IRS has monitored tax compliance among federal employees for decades, but the agency began ramping up its efforts in mid-2025. The LT36 notice states that there are roughly 525,000 federal employees or retirees who are noncompliant with IRS requirements.
And the message of the LT36 notice is clear—pay and file your taxes on time, or the IRS will follow up.
Although this notice is new, the rules aren’t new. The IRS established the Federal Employee/Retiree Delinquency Initiative (FERDI) in 1993. FERDI aims to remind federal employees that the Standards of Ethical Conduct of the Executive Branch require federal employees to file and pay their taxes on time.
Who Receives an LT36 Notice?
LT36 is only sent out to those with ties to federal employment. This includes current federal employees, retirees who receive federal pensions and benefits, federal contractors, and federal vendors.
The IRS sends this notice when its automated system identifies certain issues or triggers. These issues may include:
- Unfiled tax returns are often detected because the W-2s received by the IRS are not reported on a corresponding tax return
- Unpaid balances that have not been addressed
- Being identified as noncompliant by the FERDI team
The IRS automatically compares its own data with payroll information from federal employers, which makes it even more important to take action and address your tax concerns before your employing agency is informed.
Breaking Down the LT36 Notice
If you’ve received other IRS notices, you’ll notice that LT36 looks considerably different from other tax notices. While most tax notices have a breakdown of what you owe, how that amount breaks down into tax and penalties, and a due date for what you owe, LT36 is much more general in nature. It states that their records show that you are noncompliant with federal filing and payment requirements.
The notice provides a phone number to contact an IRS employee, as well as laws that specify a federal employee’s obligation as both a citizen and a federal employee. In addition to providing a phone number, the notice includes a QR code you can scan to log into your IRS account, the web address for your IRS account, and the web address for the payment account.
Clearing Up Misconceptions About LT36
It’s normal to panic and even overreact when you get an IRS notice, but it’s important to read LT36 thoroughly so you know exactly what the IRS is—and isn’t—saying.
First, LT36 is not an audit notice. This notice doesn’t indicate that you’re under IRS scrutiny. This letter is also not a garnishment notice. While your wages may be garnished if you continue to ignore IRS communications, they are not at that point yet.
This notice is also not indicative of disciplinary action at work. While your federal agency may take personnel actions if your noncompliance is reported to them, you still have time before you reach that stage.
Finally, LT36 is not a scam letter. People often overlook this letter because it’s not formatted or worded like other IRS notices, which may raise some concerns. However, this is a legitimate IRS notice, and you should not ignore it.
First Steps After Receiving an LT36 Notice
You’ve received LT36—what now? Follow these steps to find out what the IRS wants and take your first step toward compliance.
- Read the letter in full. It’s easy to jump to conclusions about what the letter says if you just skim it. Take a few minutes to read it—don’t discard it or set it aside, either.
- Log in to your IRS online account. Your IRS account should be easy to navigate—it states your balance due as soon as you log in.
- Request your tax transcript. From your tax account, you can request your tax transcript, which shows the forms you have submitted to the IRS and which notices the IRS has sent you.
- Check your records. Compare W-2s, 1099s, and other forms on your tax transcript with what you have filed.
- Review past IRS notices. LT36 may have been sent after the IRS made multiple attempts to contact you. Look into your old IRS notices to see if they’ve sent specific information about how much you owe or what you should do next.
- Figure out what it will take to get caught up. This depends on your specific circumstances. If you simply haven’t filed your tax returns, you may have to file and then pay a small balance. If you’ve filed and haven’t paid, it may be time to figure out how you’re going to tackle your tax debt.
- Reach out to a tax professional if needed. When you receive this notice, it’s time to talk to a tax professional. They can help you figure out what your tax situation is and what options are best suited to you.
Resolution Pathways for LT36 Recipients
The right path forward depends on your specific tax issue, but in general, you can look into these resolution options:
- Full payment: If you are able to pay in full but haven’t gotten around to it, this is likely the best option. It stops penalties and interest from accruing further.
- Installment agreement: This is often the most convenient option for taxpayers. The IRS’s new Simple Payment Plan extends payments until your Collection Statute Expiration Date, which is typically 10 years from the date of assessment.
- Offer in compromise: If you are unable to pay in full, either over time or right away, the IRS may accept less than what you owe. This is generally only an option if your income and assets are limited in comparison to what you owe.
- Currently not collectible: The IRS may temporarily pause collection efforts if you are completely unable to make progress on your tax debt. Note that interest and penalties continue accruing while you are considered not collectible.
- Appeals: If the IRS made an error—for example, miscalculated what you owed or included income that is inaccurate—you may be able to appeal their decisions.
Employment and Clearance Risks
For federal employees and contractors, receiving LT36 isn’t just about getting a harshly worded letter from the IRS or owing money. It can have actual consequences for your career and future. If the IRS shares delinquency information with your employer, you could face disciplinary action for your failure to meet your obligations as a taxpayer. You could also miss out on promotions or other opportunities at your place of employment.
If you work in a sensitive position, you could lose security clearances—federal agencies generally don’t want people with financial concerns having access to sensitive information because of the potential for misuse.
The best way to protect your career is to resolve the notice before the IRS takes it to the next level.
When It’s Time to Talk to a Tax Professional
Some taxpayers can clear the issues leading to an LT36 on their own. This may be the case if you just have a small tax debt you can pay off or one unfiled return. However, you should consider reaching out to a tax professional if you’re facing more complex tax issues. If you have multiple years of missed returns, tax debt that you cannot pay off right away, or you have no idea why you received LT36, it’s time to reach out to a tax professional to figure out your next steps.
We can help you clear up the issues you’re currently facing and set you up for future compliance that protects your financial well-being—and your career.
Take the Next Step With Wiggam Law
If you’ve received LT36 and you’re looking for clarification and guidance, we’re here to help. Call us at (404) 233-9800 or send us a message online to set up a time to discuss your tax concerns.
LT36 Notice Frequently Asked Questions
What is LT36—and why did I get it?
LT36 is a notice that the IRS sends to government employees, contractors, or retirees who have fallen behind on their taxes. It urges them to get caught up to avoid further issues.
Will my employer find out about my tax issues?
Not right away—the IRS generally gives you the opportunity to fix this issue before they escalate it to your employer. However, they do have the right to notify your agency if you do not handle your tax debt.
Can my tax issues affect my job?
Yes. As a federal employee, you are expected to set a good example by fulfilling your tax obligations. Noncompliance may also result in disciplinary action, a loss of promotions, or a loss of security clearances.
What if I disagree with what the IRS thinks I owe?
You may be able to appeal their decisions or challenge their calculations.
Sources:
https://www.irs.gov/pub/irs-pdf/p5735.pdf
https://www.irs.gov/pub/irs-pdf/p5735.pdf
https://www.congress.gov/bill/118th-congress/senate-bill/1011
