Why the IRS Is Calling Out Federal Employees Over Back Taxes

If your mailbox just spits out a bold-faced “URGENT: You have an outstanding tax issue” letter from the IRS, take a breath. You’re not alone. That same boilerplate message landed on the desks (and kitchen counters) of over 525,000 current and retired federal employees last month, no dollar amounts, no specific years, just an ominous nudge with a QR code and a vibe. This isn’t your average collections letter. It’s a new kind of IRS notice, LT36, and it comes right on the heels of a proposed Office of Personnel Management (OPM) rule that could make it way easier to boot federal workers who don’t check the “filed my taxes on time” box. Coincidence? Some tax professionals say nope. Whether it's cleanup or crackdown, it’s worth a closer look.

Let’s Just Say It’s Suspect

The LT36 notices started dropping in late June 2025, just weeks after the OPM floated fresh "suitability criteria" for federal employment, including compliance with tax laws. While the IRS still can’t freely spill your tax tea to other agencies (thanks to IRC Section 6103), the concern is that the new rules could turn your unpaid balance into a red flag HR can’t unsee. And the letter? It doesn’t even tell you how much you owe or for what year. No joke. It basically says: “You're on a naughty list. Check your online account. Handle it. Or we’ll call you.”

Jessica Marine, a former federal tax court attorney who now represents public-sector workers, called the rollout “a little bit shady.” She’s seen more than 20 clients, some of whom are already in payment plans, receive LT36 despite being in good-faith compliance. Her takeaway? “This feels like a heat check before mass enforcement.”

What is FERDI?

Here’s the kicker: this isn’t a new enforcement initiative. It’s called FERDI, the Federal Employee/Retiree Delinquency Initiative, and it's been quietly doing its thing since the Clinton era. FERDI gives the IRS a special lane to collect from the feds. Think of fewer notices, fewer hearings, and faster wage garnishments. They can snatch 15% of your pension, paycheck, or even Social Security without jumping through the usual hoops. Why? The thinking is that if you work for the government, you should set the example. "Lead by example," the LT36 says. Not subtle. The Federal Payment Levy Program is FERDI’s hammer. Once you're in its sights, it’s not a matter of “if,” but “how soon.”

Even if you’re already in a payment plan, you might’ve received this notice anyway. Frost Law and other tax attorneys are seeing it happen, and it’s got the professional tax crowd raising their eyebrows big time. The IRS usually chills once you’re on a plan. So why the extra “friendly reminder”? That’s what has lawyers and union reps sounding the alarm. There’s zero chill in the tone of this letter. It’s formal enough to say “we value your government service,” but vague enough to make you check your bank account twice and Google “can I be fired for back taxes?” (Short answer: possibly yes, if OPM’s new rules take hold.)

Don’t Ghost It

So, what should you do if you got the LT36?

• Log in to your IRS online account (scan the QR code or hit up IRS.gov).
• Check your balance and see if you missed anything.
• File any late returns ASAP, especially if you're part of the 42,000 feds flagged for multiple non-filings.
• Set up a payment plan if you can’t pay in full.
• Call the IRS at 800-829-7650, though there's no guarantee someone will pick up.

And here’s a solid professional tip: get representation if you’re confused, especially if you work in a high-security or compliance-heavy role. Marine and others recommend not winging it solo.

This Ain’t a Drill

If this feels like a policy test run disguised as a compliance nudge, you’re not crazy. The feds are walking a fine line here between legal tax enforcement and quiet workforce trimming. As they say, “Don’t let the tail wag the dog”, but right now, a vague IRS letter could wag careers straight out of public service. The IRS might just be doing its job. Or maybe this is the administrative equivalent of "cleaning house." Either way, if that LT36 is sitting unopened on your kitchen table, now’s the time to deal. Because this time, silence isn’t golden, it’s garnishable. Get clear, timely updates on IRS moves, tax rules, and financial trends. Subscribe to MYCPE ONE Insights and stay informed.