Welcome to the Tax Tips and Insights series of First Response Resolution, LLC’s official blog! We are a specialty tax firm practicing right here near Medford in Southern Oregon. The focus of my practice is solving tax problems for individuals and businesses, IRS Representation of taxpayers, and representing taxpayers before their individual State Departments of Revenue. We offer our services online nationwide from the comfort of our client’s homes and will provide services on-site to businesses in our area upon request. Think of our firm as your Financial First Responders who specialize in saving troubled taxpayers. We help people who are struggling with tax problems get their lives back on track so they can focus on what matters most to them.
As we continue the discussion around the IRS Collection Process, we will dive into the various aspects of IRS Collections Enforcement. Once the taxpayer’s account has been assessed with the tax bill and the IRS has made a demand for payment via an IRS Notice that has not been satisfied, the IRS will proceed with enforced collection actions. The IRS encourages taxpayers to pay what they owe as soon as possible and may recommend that the taxpayer liquidate their assets to satisfy the tax bill. During the collection process, even if the taxpayer has made arrangements to enter into a payment plan, the IRS will likely file a Notice of Federal Tax Lien to secure the government’s interest and establish a priority position as a creditor in competition with other creditor institutions. If a taxpayer does not respond to IRS Notices and their account becomes delinquent, the account may either be turned over to the Automated Collection System (ACS) or be passed on to the Collection Field function in which a Revenue Officer will make contact with the taxpayer in the field, meaning potentially at their home in person.
ACS will contact the taxpayer by phone to try and work out a payment solution. A Revenue Officer will be assigned to collect in the field if the IRS determines that the case warrants such contact. Once a Revenue Officer gets involved in the collection process, they have substantial authority to escalate the procedures. IRS employees want to find ways to resolve the matters and work through the case as they are being monitored by their managers and are expected to close as many cases as possible in an efficient manner. If the taxpayer is not willing to cooperate, enforcement actions could include an IRS Levy of your bank accounts or other financial assets, including wages and Social Security. The IRS can also physically seize property and sell those assets to facilitate collection of taxes owed. These steps generally will only be taken after providing many opportunities for the taxes to be paid voluntarily or for the taxpayer to demonstrate that payment would create an undue hardship and request to be placed in Currently Not Collectible hardship status.
Taxpayers who are unable to pay what they owe have options available to them when they make good faith efforts to comply with the tax laws. These options include being able to request Extensions of Time to Pay, Installment Agreements to pay over a period of time, delaying collection efforts until the taxpayer’s financial condition improves, and even an ability to settle their bill for less than they owe with the Offer in Compromise program if they qualify. If the IRS denies a request for an installment agreement, Offer in Compromise, or the IRS files a Notice of Federal Tax Lien, the taxpayer is given an opportunity to request a hearing with the independent Office of Appeals. Each time the IRS pursues enforced collection actions, the taxpayer will receive Publication 1660 which describes their Collection Appeal Rights. In addition, taxpayers who are unable to resolve their issue with the IRS directly during the collection process who believe enforced collections would create a significant hardship can submit Form 911 with their Taxpayer Advocate to request assistance in resolving the matter.
If you or someone you know is in the midst of an IRS issue, contact me at either 541-293-8449, by email at zach@firstresponseirs.com, or through our website. We specialize in solving tax problems! We know how to defend taxpayer rights and will thoroughly investigate and evaluate your specific situation and consider ALL OPTIONS available to you. All discussions are kept strictly confidential, and we offer no obligation initial consultations of up to one hour.
Is your agency interested in having me speak to your team of realtors in person or over Zoom at one of your weekly sales meetings free of charge? I have a presentation developed to address the following:
- Taxation and your clients,
- Tax tips for saving on your own tax returns, and
- Tax Problem Solutions.
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