LT17 Notice: You Owe Taxes, and the IRS Explains How to Pay

What LT17 means

The IRS page for this notice says: “You owe taxes. Notice LT17 explains how to pay them, financial hardships and your appeal rights.”

So LT17 is a balance-due letter from the IRS’s collection staff. It points you first toward paying and checking your balance online, but the phone number on the notice works if you have no online account.

Ways to pay or set up a plan

The IRS page says to pay as much as you can, because “Interest stops as soon as you pay your balance in full.” Its payment options include paying from your bank account, paying by debit card, credit card or digital wallet, enrolling in the Electronic Federal Tax Payment System (EFTPS), and applying for a payment plan.

A payment plan, which the IRS calls an installment agreement, lets you pay in monthly amounts. To see what monthly payment might fit before you apply, try our payment plan calculator.

If you already have an approved installment agreement, the IRS page says to keep making payments under it. If you applied but have no approval yet, the page says to pay as much as possible to reduce the added penalty and interest.

If paying would cause a financial hardship

The IRS page says that in some cases the IRS may decide you can’t pay any of your tax debt. It can then report your account as currently not collectible and temporarily delay collection until your finances improve.

Two limits apply. The IRS page says a delay does not stop penalties and interest from adding up, and the debt does not go away. To ask for a delay, contact the IRS ready to discuss your income, expenses and what you own; the IRS may ask for proof of the hardship. Our CNC calculator helps you test this option first.

Your appeal rights

The IRS page says you may have a right to a hearing with the Independent Office of Appeals. Publication 1660, Collection Appeal Rights, says Appeals is separate from and independent of the IRS collection office that started the collection action.

The IRS page for LT17 names no appeal deadline, but an earlier lien or levy notice may have started a 30-day clock under Publication 1660. Publication 1660 names two main procedures, Collection Due Process and the Collection Appeals Program, and explains when each applies.

What happens if you do not respond

The IRS page says the IRS may take future enforcement action, such as seizing your assets or wages, filing federal tax liens, which may affect your credit score, and adding more interest and penalties.

A federal tax lien, in the words of the IRS lien guide, “is the government’s legal claim against your property when you neglect or fail to pay a tax debt.”

What people mistake LT17 for

Some people who just paid read LT17 as proof the IRS lost the payment. The IRS page says payments can take up to 21 days to post, and if you paid the full balance within the last 21 days, you can disregard the letter.

Others think a payment plan request stops everything. Until the IRS approves the plan, the IRS page says to pay as much as possible. And some read “currently not collectible” as forgiveness; the IRS page says the debt does not go away.

For practitioners: what to check first

Check posting dates first. Under the IRS page, a full payment within the last 21 days explains the letter, so confirm the payment date and amount before you call.

Then check the installment agreement status. With an approved agreement, the client keeps paying under its terms; with a pending request, the IRS page says the client should still pay as much as possible.

Read Publication 1660 before you choose an appeal route. LT17 names the Independent Office of Appeals but sets no deadline of its own, so match the client’s earlier notices to the procedure Publication 1660 describes.

Common Questions