Getting into trouble with the IRS can feel overwhelming for many taxpayers. Most people file and pay on time specifically to avoid penalties, interest, and the stress that comes with falling behind. Still, financial setbacks happen, and once tax payments lapse, the IRS collection process begins.
When IRS Tax Problems Start
If a taxpayer does not pay an outstanding balance, the IRS will send a bill or notice along with Publication 1 (Your Rights as a Taxpayer) and Publication 594 (Understanding the Collection Process). These documents outline what the IRS can do, what taxpayers can do, and the rights that apply throughout the process.
The IRS is required to follow the Internal Revenue Code and the Taxpayer Bill of Rights, which means every taxpayer be provided prompt, courteous, fair, and professional service.
Generally, IRS problems fall into two categories:
- The taxpayer disputes the accuracy of the tax assessed
- The taxpayer agrees with the tax debt owed, but is unable to pay it
In either case, contacting the IRS promptly and securing guidance from a competent tax settlement attorney can help you navigate what often feels like an overwhelming procedure.
When a Tax Account Becomes Delinquent
If IRS notices are ignored, the account becomes delinquent. From there, it is routed to either:
- The Automated Collection System (ACS): IRS representatives contact the taxpayer by phone to pursue payment arrangements.
- The Collection Field Function (CFF): A revenue officer is assigned and will make in-person contact “in the field”.
Once the account reaches this stage, having legal representation can help you communicate with the IRS and work toward a workable resolution.
When the IRS Begins Enforcement
The IRS offers multiple ways to resolve a balance, but when communication breaks down or taxpayers are unable to meet IRS requests, the agency may move to enforced collection. This can include wage garnishment, attaching assets or bank accounts or seizing and selling property by serving a Notice of Levy.
Even at this stage, taxpayers still have options. For many, submitting a request for a hearing or appealing collection actions through the IRS Office of Appeals provides a meaningful opportunity to address the situation before further enforcement occurs.
Forms of IRS Tax Relief
The IRS recognizes that some taxpayers simply cannot pay immediately—or at all under current financial conditions. Depending on circumstances, the IRS may consider several avenues of relief:
• Payment Extension: A short time extension may be allowed. After the extension has elapsed, a taxpayer must pay within the period requested.
• Payment Plan: There are many types of payment plans for every type of taxpayer need to pay off their tax debt. This affords a taxpayer the ability to pay their tax debt in monthly payments.
• Currently Non-Collectible Status: In order to delay IRS collection efforts, a taxpayer may be in such dire financial condition that he or she cannot pay the IRS back taxes owed. This quick fix allows the taxpayer a reprieve until their financial condition improves.
• Offer in Compromise: This is an increasingly popular solution for certain qualified taxpayers that are suffering from distinct financial hardship with the unlikely capability that they will ever be able to pay off the tax debt in the time allotted by the Internal Revenue Code’s statute of limitations. If qualified, a taxpayer may enter into an IRS settlement for less than they owe.
Federal Tax Liens
The IRS may file a Notice of Federal Tax Lien to secure its interest in a taxpayer’s property. While unsettling, this filing is often procedural and ensures IRS priority relative to other creditors.
A federal tax lien can negatively affect credit and will generally remain in place until taxes, penalties, and interest are fully paid or otherwise resolved. Addressing tax liabilities early is the best way to prevent a lien from being filed.
Taxpayers may contact the IRS directly at (800) 829-1040, however, it is a good idea to hire a tax attorney professional to deal with your IRS tax problems.
Working With a Lawyer at Delia Law
A reputable tax lawyer can assist you in resolving your IRS tax problems and will provide IRS tax help in choosing the best tax debt relief for you. The Tax Attorneys at Delia Law have many years of IRS tax help experience and will aggressively represent you before the IRS.
To greatly improve your chances of acceptance, it is crucial to find a tax attorney experienced in this type of complex IRS negotiation. Please call for a no-cost tax attorney consultation at (619) 639-3336. We are conveniently located at 12707 High Bluff Drive, Suite 200. We look forward to helping you.
This blog post is not intended as legal advice and should be considered general information only.
