IRS Collection Actions on Tax Debt

Last updated on August 22, 2023

When taxes aren’t paid on time, the IRS can begin collection actions to get the taxpayer back into compliance. The IRS has several collection methods, including notices, federal tax liens, and tax levies. Using these methods, the IRS ensures they exhaust all efforts in order to collect the outstanding debt.

Before taking aggressive collection actions such as a lien or a levy, the IRS sends various notices to inform the taxpayer about the tax debt and how to resolve it. If, after repeated reminders, the taxpayer does not make satisfactory effort to resolve the tax debt, the IRS can move to aggressive collection actions. This may include the seizing and selling of property and/or assets.

It’s advisable for taxpayers to avoid aggressive collection actions, as they jeopardize not only their financial stability, but also their ability to obtain new lines of credit. A tax lien can also adversely impact a taxpayer’s employment opportunities. Obviously, it’s important to begin resolution efforts as soon as possible once the IRS begins sending notices.