IRS Letter LT36: The Government is Coming for The Government
The IRS has issued a new wave of notices that could affect the livelihoods of over half a million federal employees and retirees.
The IRS’s LT36 notice, sent to approximately 525,000 current and former federal employees, signals a coordinated enforcement initiative to make sure government employees are on the up-and-up, just like everyone else. While the notice is brief, its potential impact is significant.
If you work with government employees, federal retirees, or contractors, it’s important to understand the scope of this program—and the risks it creates for your clients.
Why It Matters:
Federal employees face different collection procedures than the general public. With the introduction of LT36, the IRS appears to be ramping up pressure and possibly aligning tax enforcement with administrative employment policy. The intersection of tax debt and job security could affect thousands of individuals.
Here’s what you need to know to protect your clients.
5 Key Takeaways on the IRS LT36 Notice
1. The Notice Is Short on Information
LT36 is a one-page notice that doesn’t list the taxpayer’s balance or identify the specific issue. Instead, it directs recipients to their IRS online account and states that they're noncompliant. It also includes language encouraging federal employees to “lead by example,” with a warning that noncompliance will trigger further action.
Lol, I love the "make them feel bad" enforcement tactic.
2. FERDI Is Driving the Initiative
This notice is connected to FERDI, the Federal Employee/Retiree Delinquency Initiative. FERDI was established to specifically address tax delinquencies among federal employees.
The fact that the IRS is actively using it now—on a large scale—means enforcement is ramping up.
3. Taxpayer Rights Are More Limited
FERDI allows the IRS to bypass the standard collection procedures, including pre-levy notice and appeals. The agency can directly levy up to 15% of a government employee's federal salary, pension, or contractor pay.
This is a key distinction from normal IRS enforcement protocols.
4. Employment Consequences Are Possible
Because this notice coincides with recent U.S. Office of Personnel Management (OPM) guidance on streamlining terminations, there is concern that unpaid tax liabilities may now factor into employment decisions.
In other words, this could escalate from financial enforcement to job termination for government employees.
5. Even Compliant Taxpayers Are Receiving Notices
Some taxpayers who are already in payment plans have received LT36 notices. It's unclear what this means. But it certainly gives off the impression that the IRS wants government employees to know they are watching them.
TL;DR Summary:
⏩ LT36 notices were sent to over 500,000 federal employees and retirees.
⏩ The notice provides minimal detail and directs taxpayers to resolve issues online.
⏩Issuance of the letter is related to FERDI, which grants the IRS broader levy powers on federal income.
⏩Employment risks for federal employees may rise in light of recent OPM guidance.
⏩Federal employees in good standing may still receive the notice.
Let's Talk...
➤ Have your government-employed clients received new IRS notices recently?
Let’s discuss what you’re seeing and how we, as tax professionals, can respond.
➥ Contact Attorney Stephen A. Weisberg for a free Tax Debt Analysis.
Contact Me Here: https://www.weisberg.tax/contact-1
Email: sweisberg@wtaxattorney.com
Phone/Text: (248) 971-0885
Address: 300 Galleria Officentre, Suite 402, Southfield, MI 48034
