How the IRS Collections Process Works

Industry Observer with Green Krist CPA PLLC 34463

Owing money to the IRS or state can be extremely stressful and you may be tempted to ignore the situation, but this will only make it worse. But where do you start? Let’s begin by explaining the IRS collection process.

After a tax return is filed and processed, the IRS will assess the taxpayer for any taxes due and not paid with the return. A notice or demand for payment is then mailed to the taxpayer. If this notice goes unpaid, a silent lien arises by statute, attaching to all the taxpayer’s assets owned and later acquired. This lien continues until the liability for the amount assessed is satisfied (paid) or becomes unenforceable due to the passing of the collection statute expiration date.

If these notices are ignored, a final notice of the IRS’s intent to levy the taxpayer’s income and assets is sent, beginning the statutory 30-day window for the taxpayer to request a collection due process hearing. If the taxpayer owes more than $10,000, the IRS files a Notice of Federal Tax Lien in the public records.

Assuming an appeal is not filed, and the amount assessed is not paid, the IRS begins seizing the taxpayer’s assets, including garnishing wages and seizing funds in the taxpayer’s bank accounts. This process of enforced collections continues until the taxpayer pays the liability due plus interest and penalties.

While there are several options available to you when you owe taxes to the IRS or to the state, navigating the maze of requirements can be confusing at best. If you need help getting in compliance with your IRS and state tax filings, please contact our firm at (919) 290-1011.

Green Krist, CPA specializes in assisting taxpayers with IRS and North Carolina Department of Revenue issues in the greater Raleigh, North Carolina area.

Comments (3)

George Souto
George Souto NMLS #65149 FHA, CHFA, VA Mortgages - Middletown, CT
Your Connecticut Mortgage Expert

Kelly Green-Krist this is valuable information.  Thank you for sharing it.

Feb 28, 2021 11:47 AM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Mar 01, 2021 01:57 AM
Kristin Johnston - REALTOR®
RE/MAX Realty Center 262-567-2455 - Waukesha, WI
Giving Back With Each Home Sold!

Great information.  Thanks for sharing and have a wonderful day!

Mar 14, 2021 07:26 AM