IRS Collection Process: What Is It And How To Prevent It

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 agreementcurrently 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. 

Here at TaxRise, we also offer a free tax consultation. We will evaluate your financial situation and recommend the best course of action for you. Save money, time, and stress by booking your free consultation today. 

How Do I Stop The IRS Collection Process?

The longer you go without paying your back taxes, the more drastic measures the IRS will take to ensure you’ll pay them the money you owe.

Unfortunately, in these situations, the IRS has a lot more leverage than you do. Since you’re the one in debt, the IRS can legally garnish wages, put public liens on you, and levy your assets. 

The simplest way to halt the IRS collection process is to enroll in the Fresh Start Program. We have a lot of articles on our website about this program.

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If you would prefer experts to take care of your tax situation for you, then book our free tax consultation today. Our team of professionals will take a holistic view of your financial situation and recommend the best resolution for you. Book your free call today.

What Can You Do To Prevent Collections?

The best way to prevent dealing with the IRS collection process is to pay your taxes on time. We understand this is easier said than done, as the tax system in America is infamously complicated.

Ensure you file your tax returns correctly, have the correct amount withheld from your paycheck, and keep up to date with payments to the IRS.

TaxRise offers tax preparation services in addition to tax relief, and we ensure your taxes will be done correctly the first time around. Don’t miss out on substantial deductions and take one thing off your plate.

The Takeaway

Don’t let the IRS control your money. Take back control of your life and financial situation with this free tax consultation. From this 30-minute call, you’ll be able to determine if you qualify for our services and which tax relief program will work best for your unique situation. 

We represent taxpayers who are audited by the IRS. We ensure the best relief outcome possible for you.

TaxRise has helped thousands of taxpayers just like you resolve their tax issues and erase their tax liability. Book your call and get started today!

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