The IRS has resumed sending LT38 collection letters again after the 2-year pandemic pause. If a small business gets one, this notice is not something to ignore or stuff away in a desk drawer.

As of now, over 3.7 million US taxpayers are expected to receive the LT38. Automatically generated by the IRS Collection System, the IRS is expecting a response – which could be an explanation or a payment.

Ignoring any IRS form, including the LT38, is generally not advisable. The IRS uses these forms to collect crucial financial information, and compliance is mandatory for businesses to fulfill their tax obligations accurately. Failing to submit the required forms can lead to various consequences, including penalties, fines, and potential legal actions.

Not an Audit Notice

The good news is that the receipt of an LT38 is not a notice of an audit. Considered more of a reminder and an attempt to resolve an outstanding balance and an attempt to resolve your debt to the IRS.

Ignoring IRS forms may result in serious consequences, and it’s in the best interest of businesses to address these matters promptly and appropriately. Non-compliance can lead to financial repercussions and may also trigger audits, which can be time-consuming and stressful. It’s essential to stay informed about the tax obligations relevant to your business and take proactive steps to fulfill them to avoid unnecessary complications.

If you receive the letter, you could make arrangements to make regular payments, or you could dispute the balance. But ignoring the notice is never a good idea.