IRS Collections and Consequences

If you owe the IRS and your tax debt has been piling up for a while, you might feel stuck or frozen and think that your tax issue is beyond help.

We’ll discuss how your tax case ends up in the IRS collection department. We’ll also discuss the solutions in a separate post, but it’s important to know how you end up in IRS collections and what actions to take.

The IRS will send you letters. Once you get the final Notice of Intent to Levy, that means your case will now be transferred over to collections. Now your assets may be garnished after 30 days of receiving that letter, if you don’t take any actions.

Depending on the amount you owe, your case will either be assigned to an IRS revenue officer or the automated collection system. They can seize your assets, freeze your bank account, garnish your paycheck, and even restrict your passport.  They can file levies and liens on your property. We hope this hasn’t happened to you yet, but it will if you don’t act fast enough.

Similarly, if you’re assigned to a revenue officer, they’re going to do all the same things but also manually go after you, visit your office and your home. The IRS is the most formidable collection agency and they will seek every legal way to collect the money they are owed.

If you’ve been receiving notices from the IRS, your case isn’t in collections department yet if you didn’t receive the final notice of intent to levy. But if you haven’t received letters in a long time, a possibility is that, the IRS has been sending your letters to a wrong address or your old address that hasn’t been updated. In this case, you still might be in collections. If you’re not sure about that, you can hire a professional like our firm to find out the exact history on what was going on with the IRS activities on your account.

When you deal with the IRS, the best thing is not to deal with them yourself. Do not give them any information that they’re requesting, and let them know that you’re in the process of hiring someone. They will give you some time for that and put your case on hold, so that there’s no collection activity.

Now, you want to come back with a resolution before time is up.

There are several resolution options available to you. I’m going to discuss these solution options in our next post so please stay tuned. Or you can contact us to set up a consultation with us to go over your resolution options.