Being put through the IRS collection process is scary, but don’t worry — there’s a way out. If you’re in this unfortunate situation, this article has all the information (and resources) you need. 

Today, we’ll go over the IRS collection process, what steps the IRS can take against your tax debt, how to stop the collections process, and how to help prevent this situation in the future.

Sounds good? Here’s how to fix your financial situation.

What Is The IRS Collection Process?

The IRS collection process —  a phrase no American taxpayer wants to hear —  is a series of actions the IRS can legally take to collect owed back taxes. As time passes, the IRS has more and more authority to collect the debt owed.

In other words, if you owe tax debt and don’t arrange a payment plan (or pay off your tax bill in full) when the IRS mails you a tax bill, the IRS will start planning to collect your back taxes. 

At first, the IRS uses penalties and interest to motivate you to pay your back taxes. If this doesn’t work, the IRS will soon have the power to impose tax liens and levy your assets while continuing to charge penalties and interest.

The bill in your mailbox kickstarts the collection process, and it will continue until the debt is paid or the statute of limitations expires.

IRS Collection Process Steps

There are two main steps in the collection process.

1. Receive a letter from the IRS with information about the full balance amount and demanding the entire payment. The letter will also include any penalties or interest accrued on your bill since the date taxes were due. (Did you file your taxes incorrectly? Check out this article). 
2. Start the collections process. If you ignore the IRS and don’t settle your tax debt or create a plan, then the IRS will start its collection process. Depending on the amount owed, the IRS can put a tax lien on your assets and, in extreme cases, an IRS levy can seize your assets. 

If you can’t pay the full amount all at once, you may qualify for the Fresh Start Program. This initiative offers several programs depending on your needs: an installment agreement, currently non-collectible (CNC), and an offer in compromise (OIC).

If your tax debt gets to the collections process, you can still reverse the tax lien and tax levy. However, once it gets to this point, we highly recommend having a professional tax relief company on your side.