Spring is the time for Marylanders to decide they're willing to brave the crowds to go down and see the cherry blossoms in the Tidal Basin. Instead, some Marylanders may be wondering if they have to be brave in dealing with the Internal Revenue Service (IRS) after the IRS has sent them an LT26 Notice. Let's take a look at what an LT26 Notice is and why it is so important to respond if you've received one.

IDENTIFYING AN LT26 NOTICE 

As with other IRS notices, there will be a box to the right that states the notice type and date. It will also have a case reference number, your Social Security Number, and a phone number to reach the IRS.

There will be a large headline in bold type reading, “You must file your tax return(s) immediately,” with a list of the tax returns that the IRS claims have not been filed.

The letter also states that the IRS has sent you previous correspondence, but you did not respond to it.

WHAT AN LT26 MEANS

An LT26 Notice is not a bill. Instead, it is a warning that if you don't immediately file your taxes, the IRS may create its own tax filing for you, and it will soon be sending you a bill based on that determination. And interest and penalties are accruing even though you haven't filed.

At the same time, the Notice also warns that the IRS is considering filing criminal charges of tax evasion against you.

WHAT YOU SHOULD DO IF YOU RECEIVE AN LT26

You shouldn't panic at the sight of an LT26; however, you should take the notice very seriously. Individuals who fail to file a tax return can be subject to civil and even criminal penalties for tax evasion.

You may consider yourself small enough potatoes that you're not worth the IRS's time, so you wonder if it's better to refuse to file and pay nothing.

You are correct that prosecution is usually limited to those who have large tax debts. But here's why not filing anything is almost guaranteed to hurt you, even if the IRS does not decide to pursue charges against you.

If you don't file a return, the IRS can generate a return for you. When it does so, you'll end up being charged at the highest possible rate. The IRS won't give you any credit for deductions that you might be legitimately entitled to. Then add interest and penalties, and you could end up owing significantly more than you could have if you'd filed a return.  

Then, once the IRS has determined that amount, it can proceed with steps that can lead to seizing your wages and other assets to pay the debt.

HOW AN EXPERIENCED TAX ATTORNEY CAN HELP 

If the IRS has sent you an LT26 Notice, a tax attorney will help you determine your true potential liability and your best course of action.

If it is apparent that you owe taxes, a tax attorney will help you determine any additional or amended filings that you will need to complete. An attorney can negotiate with the IRS to reach a settlement—with the potential for reducing the amount you owe, even to zero, as Gabaie & Associates, LLC. was able to do for one client.

Maryland tax attorney Gabaie & Associates, LLC. has offices in Baltimore, Annapolis, Rockville, and Columbia, and Juda Gabaie specializes in helping business owners with taxes. We can review your current tax liability, help you work with the IRS to resolve any debt and come up with ways to help you avoid future issues.  

Contact Gabaie & Associates, LLC today by calling us at (410) 358-1300 or by emailing us to schedule a free consultation.