IRS’ Aggressive Collection Actions for Tax Debt

Last updated on October 7, 2022

In cases of tax debt, the IRS begins collection action by sending notices. Initial notices include basic information such as the tax debt amount to be paid and how to pay it. Taxpayers must begin making efforts to pay their tax debt at this stage to avoid aggressive collection actions such as lien and levy.

Resolution of tax debt is simpler at initial stages, as taxpayers can apply for a tax debt payment plan or pay their full tax debt in a single payment. Usually, taxpayers who cannot afford to pay in a lump sum hire professional help for assistance in resolving their back taxes. The resolution process involves selecting and applying for the most appropriate payment plan, negotiating with the IRS, and keeping compliant with the rules of the payment plan.

In unresolved cases of tax debt, the IRS moves to federal tax lien where it seizes the property and/or assets of the taxpayer to ensure payment of tax debt. If even then, the tax debt case is not resolved, the IRS proceeds to a tax levy under which it sells the seized property and/or assets of the taxpayer to fulfil the tax debt.

Taxpayers must make immediate efforts to resolve their back taxes as soon as they discover the debt. It will not only help them avoid IRS’ collection actions, but will also stop the piling up of IRS penalties and interest that increase the tax debt amount over time.