So When Does the IRS Initiate Collection Action?


 A quick IRS collection primer

If you’ve been a taxpayer for at least a few years, chances are you’ve heard IRS collection horror stories. After all, no one likes to hear from the IRS, and dealing with the IRS can be intimidating. One of the most popular reasons for hearing from the IRS is with regard to back taxes. What exactly takes place when dealing with an IRS back tax matter?

First of all, the taxes must be due and payable. Once you’ve prepared and filed your return (or had a tax pro do it on your behalf) you know right away whether or not you owe taxes. The IRS knows this as soon as they receive your return, so as they saying goes, “they’re on to you.”  You’ll need to pay any taxes due by the April 15th deadline in order to avoid late fees and penalties.

You’ll receive a Notice of Tax Due in the mail if you weren’t able to pay your taxes and submit them along with your return. This is s courtesy notice from the IRS, reminding you of your outstanding tax balance. You will have 10 days to pay the amount due or to make payment arrangements.

If the IRS doesn’t receive a response or payment from you, and if the tax bill is relatively small, you’ll receive a series of notices before they initiate collection action. The IRS has to conform to a strict series of policies and procedures before initiating collection action.

Each successive notice escalates in terms of urgency and in outlining the consequences for non-payment. Once your tax account reaches the collection stage, the IRS can and will become more aggressive in terms of recovering the debt you now owe them. At this stage, you do have the opportunity to set up an installment agreement or apply for an offer in compromise. Both of these require the help of a tax pro.

However, if you fail to respond to any IRS notice, or any other attempt to reach you, they will issue a Notice of Intent to Levy. In essence the IRS is informing you they can and will seize assets such as your bank account in order to satisfy your tax debt. 

However, you don’t have to let your outstanding tax bill get to that point. You do have the option of either negotiating with the IRS on your own or enlisting a tax pro to negotiate on your behalf. Despite the horror stories and urban myths, the IRS is willing to negotiate with taxpayers regarding an outstanding tax balance.

This is especially true if the balance due is relatively small. If you’re a rock star with hundreds of thousands of dollars in back taxes, then the IRS could be more aggressive in terms of collecting from you. 

If you’re facing an outstanding tax bill, don’t put it off for a moment longer. If the thought of dealing with the IRS gives you the cold sweats, we have tax pros on staff who are trained and qualified to negotiate with the IRS on your behalf, and to seek a payment arrangement you can live with.

Get started today by either giving us a call at (888) 224-3004 or by clicking the white “Start Chat” button at the top of our homepage. You don’t have to go it alone. We can help.