IRS Tax Debt Collection Actions

Last updated on March 28, 2023

Tax debt can be resolved even if you cannot pay the full or any amount of tax debt. This is why the IRS will not accept excuses. The IRS has payment plans that allow tax debt reduction or postponement of tax debt. The only reasons for an unresolved tax debt can be negligence or procrastination. Still, not all is lost if the taxpayer under tax debt either can make full payment or qualifies for an IRS tax debt payment plan.

It is best to avoid getting into tax debt, but many times erroneously filed tax returns also lead to tax debt. Irrespective of the reason for the tax debt, the IRS will continue with collection actions until they get as much of taxes owed as possible.

Federal tax lien and tax levy are the most aggressive collection actions of the IRS. A tax lien is placed by the IRS when a taxpayer ignores IRS notices regarding tax debt resolution. Under a tax lien, the IRS claims legal right to the property and/or assets of the taxpayer to ensure that tax debt is paid. If still no effort is made in the resolution of the debt, they will move to levy, which is selling the seized property and/or assets towards fulfilling the tax debt, fully or partially.

To avoid IRS collection actions and the penalties and interest charged on tax debt, it is best to resolve the tax debt as early as possible.