LT33 Notice: The IRS Applied Your Payment, but a Balance Remains

What LT33 means

The IRS page for this notice says the IRS applied your recent payment to your account, “however, there’s still an outstanding balance.” In plain words, the payment helped, but you still owe money.

LT33 does not say the IRS lost or refused your payment. It says the payment reached your account and counted, and that it fell short of the full balance.

The Internal Revenue Manual (IRM), the IRS’s staff rulebook, titles LT33 “Your Payment Did Not Cover The Total Amount You Owe” (IRM Exhibit 5.19.5-2).

How to pay the rest

The IRS page says to pay your balance in full by the date on your notice to avoid paying more in penalties and interest. Paying sooner leaves less for penalties and interest to grow on.

If you cannot pay it all by that date, Common Questions below explain where to ask about a payment plan.

If you think you already paid in full

The IRS page lists three ways to check. First, you can see your balance and payment history in your Individual Online Account. The page notes the account is “not eligible for business entities,” so a business uses one of the other two ways.

Second, you can call the number on your notice for an explanation of the balance. Third, you can write to the address in the “Additional information” section of your notice and mail supporting documents that show you paid in full, such as a bank statement or a payment confirmation with the date and amount.

Before you write, check that the payment went to the tax year on the notice. If you meant it for this year and your records show the IRS put it toward a different year, say so in your letter and include the proof.

What people mistake LT33 for

Some people read LT33 as a receipt and set it aside. It is a balance notice: the IRS page says you still owe, and it tells you to pay by the notice date.

Others confuse it with CP62, the notice the IRS sends to report a payment it applied to your account. A CP62 can show a zero balance; an LT33 says a balance remains.

And some assume the IRS lost part of the payment. Before you assume an error, compare the payment with the balance on your last bill; interest and penalties that kept running after that bill can explain the gap.

For practitioners: what to check first

Pull the account transcript and match each payment to its tax period. Our transcript analyzer helps you read the payment and balance codes before you call.

Know what LT33 signals. IRM 5.19.4.3.4 tells collection staff to send LT33 when the remaining balance sits below the threshold the IRS uses before it levies, and to levy as a follow-up if interest and penalties push the balance past that threshold. IRM 5.19.4.3.2 also sends LT33 after a final promised payment, with a 25-day levy follow-up when the balance is at or above that threshold. IRM 5.19.4.3.4 says not to send LT33 when the last payment came from levy proceeds.

So no LT33 balance is one to leave alone. Under IRM 5.19.4.3.2, a balance at or above the threshold gets a levy follow-up in 25 days. Under IRM 5.19.4.3.4, a smaller balance moves closer to that line with every month of interest. If the client’s last payment came from a levy, note that the manual says LT33 should not go out in that case, and ask the IRS why it did.

Common Questions