How to Face IRS Collections With Confidence
Most of the mail you receive immediately ends up in the trash.
Then there’s some that you’d love to dispose of. But I’d advise against it. An example being post-Coronavirus collection letters.
I want to shed light on their arrival in droves. And whether you should be concerned.
Keep reading to learn why the IRS temporary collection delay resolved. Plus, how to deal with it.
IRS Stay of Collections Ends
IRS collections were put on hold in March 2020 via the People First initiative.
At the time, former Commissioner Chuck Rettig stated, “We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country.”
Top areas of tax relief:
- Installment agreements
- Offers in Compromise
Specific methods for redress experienced a dip in usage.
Halted services:
- Audits
- Field collection
- Automated compliance notices
Mainly, the agency chose to focus on sending out stimulus payments. But other reasons factored in.
Among them:
- Remote work caused disruptions
- Record number of phone calls
- 35 million unprocessed returns (2023)
Between 2019 and 2022, business and individual tax debtors increased by nearly 11%. At the same time, IRS revenue field officers held off on many new lien and levy penalties.
Officials attempted to resume this process in summer 2021. However, growing service needs put a stop to that.
Although we saw IRS collections suspended, work in the field began once more in 2022. Expect some of the 87,000 officers Biden hired to direct their energy towards this effort.
The maligned agency wants to change their image. One step in this direction is the creation of the Alternative Dispute Resolution Management Office (ADR).
Goals:
- Conclude disputes sooner
- Clarify current guidance
By improving internal collaboration, they believe overall program use will see a notable boost. Taxpayers can expect this move to enhance the IRS’s ability to demand repayment.
Next, I’ll address weapons in their arsenal.
Power of the IRS Collections Division
Enforcement is something the IRS is proficient in. Just ask Microsoft.
They compel action through certain tactics. Such as mushrooming interest and penalties. It doesn’t stop there.
IRS collection options:
- Liens
- Levies
Allow me to break them down a bit.
Tax Liens
A federal legal claim on both assets and property, tax liens place the IRS at the front of the line. In terms of creditors. The other guys must wait for a chance at restitution.
Should you seek additional financing, expect a barrier. Whether for a home loan or another type of funding.
It’s true that they are difficult to lift. Even a Currently Not Collectible (CNC) status won’t alleviate this debt.
But it’s not impossible.
Ways to annul your lien:
- Money owed is paid in full
- Prompt reduction on a long-term payment plan
Over time, consistency in payments will provide a way out.
Tax Levies
Instead of a legal right, as with liens, tax levies are an actual claim on your possessions.
Prior to enforcement, you should receive a collection notice stream. Including an initial payment request, several reminder letters, and a notice to levy.
A final notice of intent to levy puts you in the “penalty box.” You then have 30 days to pay in full or sign an agreement.
Possible next steps from the IRS:
- Zero out your bank account, effectively closing it
- Deduct a specific amount from your paychecks
- Acquire and sell any owned property (non-primary)
If a balance still isn’t met, wage reduction may continue. Worst case scenario is another levy showing up in your mailbox.
Here’s some semi-good news.
The best-case scenario is an amount over the sale of your property being credited to your bank account. A small victory is better than no victory, right?
Passport Revocation
For all you world travelers out there, 2021 saw the authorization of passport revocation. Courtesy of the Department of State (DOS).
Another option is denial of your renewal request for various travel documents.
You must have a seriously delinquent tax debt to experience this unfavorable outcome.
Even if you prefer to remain stateside, the fact of this power being granted to the government is slightly unnerving.
Moving on, I want to offer a healthy dose of encouragement.
Ward Off IRS Tax Collections
At our firm, I’m seeing collection letters from 2-3 years ago. And now for the promised optimism.
I’m finding that some are either:
- Incorrect
- Already paid
So, seeking professional tax resolution might provide the peace of mind you long for.
Here’s another fact.
When the 2023 tax season ended, average refunds were down by more than 7%. The cutback of tax benefits tied to the Coronavirus are a root cause.
Odds are, this is news to you.
Use this to your advantage. The right adjustments to your tax strategy can remove you from the balance-due filer group.
Plan ahead while being the first to hear of new changes to the Tax Code coming from Washington.
Other perks of tax help:
- Avoid an audit in the first place
- Quickly spot IRS errors
- Internal Revenue Manual (IRM) and Internal Revenue Code (IRC) knowledge
Add an advocate before the IRS. Someone fluent in “taxspeak.”
Since we’re on the subject, I’d like to throw my hat in the ring.
Blue Slate Accounting Tax Resolution Specialist
Something is missing from the accounting field.
A human approach to personalized tax resolution services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.
Aiding their arrival back to good standing with the federal and state governments.
Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:
- Preparation of unfiled income tax returns
- Penalty reduction
- Offers in compromise
- Payment plans
- Financial hardship plans
- Wage garnishment/bank levy releases
- Audits
- IRS appeals
We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.
Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!









