The Enforced Collection Process
When we think about an IRS nightmare, the enforced collection process by the IRS is the “real” horror. Enforced tax collection by the IRS includes the IRS’s power of lien, levy and seizure of your property such as bank account levies, wage garnishments and more to satisfy the payment of your delinquent taxes. The IRS begins the enforced collection process when all efforts to at voluntary compliance fails.
Prior to taking enforced collection action the IRS issues several notices. These are all attempts to discuss options to how you might pay your tax liability. Each of these notices increases the threat level to the taxpayer ultimately leading to enforced collection. The notices sent may include these and more:
- CP 14: Balance Due
- CP 501: Notice of Balance Due
- CP 503: We have not heard from you and you still have a balance due
- CP 504: You have an unpaid balance if you do not pay your balance immediately IRS will seize (levy) your assets
- Ltr1058: Notice of intent to levy your right to a Due Process Hearing; enforced collection action may be imminent
When a taxpayer does not respond to the IRS, the IRS obviously finds enforced collection effective in getting a response or collecting the taxes. This action could include the following:
- Issuing a Notice of Levy on salary and other income, bank accounts or property (legally seize property to satisfy the tax debt)
- Assessing a Trust Fund Recovery Penalty for certain unpaid employment taxes
- Issuing a Summons to the taxpayer or third parties to secure information to prepare unfiled tax returns or determine the taxpayer’s ability to pay
Avoiding Enforced Collection
Obviously the best way to handle enforced collection activity by the IRS is to avoid it altogether. Resolving your tax liability can be a lengthy process. In certain circumstances, the IRS can take months to respond to some requests once it has reached this stage. Therefore, it is important to have reasonable expectations on the duration that it could take to resolve your tax issue. While it is possible that immediate relief can be granted if you can demonstrate that the IRS enforced collection action has created a “significant hardship”, the best approach to resolving an enforced collection action is to seek the experienced representation that you can find with Tax Samaritan.
Tax Samaritan can help put a stop to the increasingly threatening IRS notices you received as part of the enforced collection process. We will work diligently to protect you and undo the harmful consequences of levies against your bank accounts, paycheck, and other property. We will work to resolve your tax issues equitably and fairly.
Our goal at Tax Samaritan is to provide the best counsel, advocacy and personal service for our clients. We are not only tax preparation and representation experts, but strive to become valued business partners. Tax Samaritan is committed to understanding our client’s unique needs; every tax situation is different and requires a personal approach in providing realistic and effective solutions.
If you have received a bill from the IRS demanding payment, or a notice of intent to levy, please do not hesitate to contact the experienced tax professionals at Tax Samaritan to review your options by clicking the button below to request assistance.
Tax Samaritan is a team of Enrolled Agents with over 25 years of experience focusing on US tax preparation and representation. We maintain this tax blog where all articles are written by Enrolled Agents. Our main objective is to educate US taxpayers on their tax responsibilities and the selection of a tax professional. Our articles are also designed to help taxpayers looking to self prepare, providing specific tips and pitfalls to avoid.
When looking for a tax professional, choose carefully. We recommend that you hire a credentialed tax professional such as Tax Samaritan that is an Enrolled Agent (America’s Tax Experts). If you are a US taxpayer overseas, we further recommend that you seek a professional who is experienced in expat tax preparation, like Tax Samaritan (most tax professionals have limited to no experience with the unique tax issues of expat taxpayers).
Randall Brody is an enrolled agent, licensed by the US Department of the Treasury to represent taxpayers before the IRS for audits, collections and appeals. To attain the enrolled agent designation, candidates must demonstrate expertise in taxation, fulfill continuing education credits and adhere to a stringent code of ethics.
Every effort has been taken to provide the most accurate and honest analysis of the tax information provided in this blog. Please use your discretion before making any decisions based on the information provided. This blog is not intended to be a substitute for seeking professional tax advice based on your individual needs.