IRS LT38 Notice — The IRS Is Resuming Collections
What this means: LT38 tells you the IRS is reactivating collection on a balance that had been paused — often since the COVID-era collection pause. If you haven't heard from the IRS in a couple of years, your account is active again, and acting now keeps you ahead of liens and levies.
What is an IRS LT38 notice?
IRS Letter LT38 is a reminder the IRS sent in 2022-2023 to restart collection on accounts that had been paused, including during the COVID-era pause. It means a balance you still owe is active again — penalties and interest kept accruing while it sat quiet. Acting now, before the account escalates to a lien or levy, keeps the most resolution options open.
Notice Type
LT38 — collections resuming
Based on: LT38 — IRS resuming collections
- Bank levy possible with a single letter.
- Wage garnishment is authorized.
- Asset seizure review is underway.
What This Notice Means
LT38 is a reminder notice the IRS used to resume collection on accounts that had been on hold. During the pandemic, the IRS paused many automated collection notices; LT38 is how it restarted that contact. Receiving it means a balance you still owe is active in the collection system again — and the clock on penalties and interest never actually stopped.
Why You Received It
You received LT38 because you have an unpaid balance that the IRS had stopped actively pursuing. Many taxpayers had not heard anything for two or more years and assumed the debt had gone away. It did not — the IRS simply suspended notices, and LT38 restarts the process where it left off.
What Happens If Ignored
If you ignore LT38, the account moves back through the collection sequence. Expect renewed balance-due and reminder notices, then a CP504 Final Notice, a possible Notice of Federal Tax Lien, and ultimately an LT11 final levy notice. Each step adds penalties and interest and narrows your options, so the quiet period is the best time to act.
Deadlines That Matter
- By the notice response date — confirm the balance and respond to avoid re-escalation.
- Before a CP504 / LT11 arrives — set up a plan now, while no levy authority is active.
- Note — LT38 itself does not start a 30-day Collection Due Process window; that comes later with a lien or final levy notice.
Resolution Options
- Installment Agreement — restart structured monthly payments.
- Offer in Compromise — settle for less than the full balance if you qualify.
- Currently Not Collectible — pause collection again if paying would cause hardship.
- Penalty Abatement — request relief from penalties that accrued during the pause.
What happens after a federal tax lien is filed
- NOW
IRS files public notice. Credit bureaus notified. Anyone can see it.
- 30 DAYS
Penalty interest compounds daily. Balance grows automatically.
- 60 DAYS
IRS assigns a Revenue Officer. Collection action begins.
- 90 DAYS
Bank levy authority activated. IRS can freeze your account with 1 letter.
- 180+ DAYS
Wage garnishment, asset seizure, and property liens expand.
The earlier you act, the more options you have.
See What Options Apply to YouWhy the IRS restarted collections — and what to do
More videos from experienced Enrolled Agents →Common Questions About LT38
What is an IRS LT38 notice?
LT38 is a reminder notice the IRS began sending in 2022-2023 to restart collection on accounts that had been paused, including during the COVID-era collection pause. It tells you the IRS is reactivating collection on a balance you still owe.
Why did I get LT38 after years of silence?
The IRS suspended many automated collection notices during the pandemic. LT38 is how it resumed contact — so a balance that sat quiet for two or more years is active again, and penalties and interest kept accruing the whole time.
Does LT38 mean the IRS will levy me?
Not immediately. LT38 is a reminder, not a final levy notice. But it signals that collection has restarted, so the account can move back through the notice sequence toward a lien and, eventually, a levy if you don't respond.
What should I do after receiving LT38?
Confirm the balance, then act before escalation. Setting up an installment agreement, submitting an Offer in Compromise, or requesting penalty relief now is far easier than waiting for a CP504 or LT11 final notice to arrive.
Romy Cruz, EA
Licensed Enrolled Agent
Licensed Enrolled Agent (EA) · 15 Years IRS Tax Resolution
Romy helps individuals and businesses resolve IRS tax issues including liens, levies, installment agreements, penalty relief, and offers in compromise.
Content is reviewed periodically for accuracy and updated to reflect current IRS guidance and regulations.
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