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IRS CollectionsTax Levy

How the IRS Collection Process Works

You’ve filed your tax return with a balance due and are unable to pay and are unsure what you should do next. Well, within a short period of time after receiving your return, the IRS  will begin its automated collection process. Here’s how it works.

The First Bill

Once you submit your tax return with an unpaid balance you will receive a bill from the IRS, which officially begins the collection process. This bill will explain how much you owe, including the amount of taxes plus any penalties and interest accrued on the unpaid balance from the date the tax was due. Because the balance you owe is subject to interest and a monthly late payment penalty, you should try to pay the full amount you owe as quickly as possible.

Contacting the IRS

After you receive a bill from the IRS that you cannot pay in full, you should contact the agency to make alternative arrangements, including installment agreements and offers in compromise. An installment agreement allows you to pay your tax debt in monthly increments, thereby giving you more time to pay in full. If you cannot fully pay with an installment agreement you may request a partial pay installment agreement or file an offer in compromise. An offer in compromise is an agreement between you and the IRS wherein the IRS agrees to accept an amount that is less than full amount you owe. Not all taxpayers qualify for an offer in compromise.  If you can’t afford to establish an installment agreement or the IRS rejects your offer in compromise, you can also ask the IRS to delay collection and report your account as “currently not collectible.” While the option does not resolve your debt, it does delay the collection process if you can demonstrate a financial hardship that precludes you from paying.

If You Do Not Contact the IRS…

Contacting the IRS will allow you to make payment arrangements that work for you. However, if after sending you a series of collection notices the IRS does not hear from you, it has the legal authority to resort to more coercive measures to collect the debt, including:

  • Filing a lien on your property
  • Levying your assets (such as wages, bank accounts, and social security benefits)
  • Offsetting a refund to which you are entitled

While these types of collections activities are drastic, it is important to note that the IRS ordinarily will not stop collections until it has been paid the back tax debt it is owed. Therefore, it is in your best interest to work with the IRS to arrange a collection alternative before the collections process proceeds to this stage.

Let East Coast Tax Consulting Provide You With Boca Raton IRS Tax Levy Help

The IRS collections process can be intimidating, but you don’t have to go through it alone. If you owe back taxes and are subject to IRS collection activities, our Boca Raton tax consultants can help. Call East Coast Tax Consulting today at 866-550-7655 for a free consultation.

Contact Us 

You deserve the best in IRS tax representation, tax preparation, and tax planning services. At East Coast Tax Consulting Group, you’ll work with a licensed CPA who will handle your case from beginning to end. We invite you to contact our team to schedule a free, confidential consultation.