IRS Debt Payment & Collection Actions

Last updated on March 7, 2022

Taxpayers with tax debt must have accurate information about how they can resolve their back tax debt and what can happen if they avoid it. The resolution of tax debt does not always involve the payment of tax debt. Under the IRS debt program, Currently Not Collectible, taxpayers can postpone the payment of their tax debt if their financial situation does not allow them to. Keep in mind though, this program has qualifications that taxpayers must meet in order to be accepted in by the IRS.

One of the advantages of qualifying for an IRS debt payment plan is that taxpayers avoid various IRS collection actions, such as a tax levy. Also, paying back taxes early saves interest on the debt amount.

The partial payment of a tax debt helps taxpayers who cannot pay the entire amount of tax debt. It is important for taxpayers to communicate with the IRS after receiving the initial notices regarding their debt. Postponing a resolution can lead to aggressive collection actions by the IRS..

A tax lien and levy can not only be devastating to a taxpayer’s finances, but also damage their credit report. The resolution of a tax debt issue can only be achieved by qualifying for an IRS debt payment plan, including an Installment Agreement, or an Partial Payment Installment Agreement.