The IRS has two main sources of carrying out its work in collecting taxes: local Revenue Officers and its Automated Collection Service. When you get that call or letter from IRS collections, it's important to know who you are dealing with - and what to expect. The IRS Automated Collection Service - commonly known as "ACS" - is a series of IRS call centers staffed by IRS collection employees. You will never see or meet an ACS employee face-to-face; all of their work is conducted by telephone. And the vast majority of telephone work conducted by ACS is responding to inbound calls, not ... Read More
Know the IRS warning signs of levy or seizure: IRS Letter 3174, New Warning of Enforcement
When working with an IRS Revenue Officer, there are two warning signs that levy action is imminent. The first sign is the IRS Final Notice of Intent to Levy. This notice is required by law (Internal Revenue Code 6331) and provides a 30 day right to stop levy action by filing an administrative appeal. The appeal puts resolution in the hands of an IRS settlement officer (as opposed to an IRS enforcement officer). This is known as a collection due process appeal because levy action cannot occur until you have exhausted your rights to review. And if you cannot reach resolution with a ... Read More
An IRS letter that you want to receive: Case Closed – Currently Not Collectible
There are many options to resolve an unpaid tax liability - you can agree with the IRS to make monthly installment payments, reach a settlement with an offer in compromise, eliminate the taxes in bankruptcy, or have the IRS place your account in currently not collectible status. Let's focus on currently not collectible. Currently not collectible status occurs when the IRS agrees that you cannot afford to repay the debt, and doing so would create an economic hardship on you. It is forbearance by the IRS, a break from enforcement that can last years. To obtain currently not collectible ... Read More
Understanding Federal tax liens: How they work, when they expire and why they can be refiled
The Internal Revenue Code does not make it easy to understand how Federal tax liens work. Hopefully, that is what I am here for. The starting point to understanding your tax lien is to know that it lasts for the amount of time the IRS has to collect from you – 10 years. After the 10 year statute of limitations on collections expires, the IRS is required to release the lien. To accomplish this on a wide scale, the IRS inserts language into the lien that makes it “self-releasing.” That means it is automatically released when the 10 years is up. This “self-releasing” aspect of a tax ... Read More
IRS collection threats: Myth vs. Reality
My clients with IRS collection problem come to me with different ideas about what will happen to them because they did not pay their taxes. Is the IRS going to show up one day and seize my house? Levy on my income so I cannot provide for my family? Shut down my business? When do I get my life back? IRS problems often happen from what life throws at us - divorce, failed businesses, medical problems. Most IRS problems do not reflect any bad intent, but they can be all-consuming. Owing money to the IRS is serious, but most of what you hear from friends, the media, even the IRS – can ... Read More