|
|
Last Modified on May 29, 2026
When you owe the Internal Revenue Service (IRS) a debt, you may not know what to expect. The agency will take several steps to recover the debt it is owed, from sending bills to directly seizing your assets. You need to know the IRS collections process, how it can affect your life, and what you can do about it.
The Collections Process
Learning the process can help you take the necessary steps to protect your rights. Ignoring the issue will not help and may only leave you facing serious collection actions with many potential financial consequences. The tax debt collection process includes multiple actions.
- Tax Debt Assessment: The IRS first has to assess the debt you owe within three years of you filing your return. Your filed return may state that you owe more in taxes than you paid, or the agency may have sent a correction for the amount you owe. The IRS can also file a return for you if you failed to do so, and then assess the tax owed on that return.When the agency has assessed your tax, it can also assess related penalties for the tax debt and any interest. After assessment, actions to recover the tax liability can begin.
- Tax Bills: Before the IRS takes any further actions, it sends you a tax bill for the amount you owe. This notice starts the collection process. If you pay the tax bill, the collection process will end. The IRS will continue to send notices of nonpayment and reminders to pay your tax debt until the debt is paid in full or the agency is no longer legally able to collect the amount.This is when it is in your interests to either pay the debt in full or communicate with the IRS for other arrangements, if you haven’t already. The sooner in the process you do this, the better. If you can’t financially afford your tax debt, there are options to set up a payment plan or even lower the amount you owe.
- Collection Actions: If you continue not to pay your tax debt or contact the IRS, then the agency will take more direct collection actions to get you to pay or simply recover the debt itself. Some methods include:
- A tax lien, which is the IRS placing a claim on your assets, such as your home, vehicle, or other real and personal property
- A levy, which seizes property to cover your debt, like the funds in your bank account or real estate property
- Wage garnishment, a form of levy that takes a portion of your wages from your paycheck to pay the debt
The IRS can use one or multiple of these methods to recover the debt you owe. Each collection action has its own steps when it is implemented, and some of them take several weeks from the first notice to being enforced.
In fiscal year 2024, the IRS took several collection actions and enforcement activities, including:
- More than 50.7 million civil penalties assessed
- 639,143 new delinquent taxpayer investigations
- 313,792 notices of levy requests to third parties
- 196,996 filed federal tax liens
- 71 property seizures
If you still haven’t taken action, you need to do so when you begin receiving notices of the IRS’s intent to levy or place a lien on your property. You have a short window to appeal some of these actions.
What Can You Do About the Collection Process?
The methods you can use to pause or stop the collection process depend on your circumstances. Options could include:
- Applying for Currently Not Collectible status
- An installation agreement, or a payment plan, allows you to pay the full debt over time
- Penalty abatement, which can remove some penalties and reduce the amount you owe
- An offer in compromise, which can settle your full debt for less than what you owe
FAQs About the IRS Collections Process
How Do I Stop the IRS Collection Process?
The most effective way to stop the IRS collection process is to pay whatever debt you owe to the IRS, including penalties and interest. When the IRS processes the payment, collection actions will stop entirely.
You can also temporarily delay the collection process by having your debt marked Currently Not Collectible, or begin negotiations on another way to resolve the debt, like a payment plan or offer in compromise. Some collection actions, like liens, continue as you repay your debt.
How Long Does the IRS Collection Process Take?
The IRS collection process is very lengthy, involving numerous notices and actions taken by the agency to recover your unpaid debt. You will receive several bills before collection actions occur. However, you should still act quickly. While the process takes time, it can cause you financial hardship. Resolving your debt helps you protect your interests. If you can’t afford the debt, there are other steps you can take to mitigate the effects of the collection process.
How Do I Pause IRS Collections?
You can pause IRS collection actions by having your debt marked as Currently Not Collectible (CNC). This can be used if financial hardship is preventing you from paying your debt. The IRS may need financial information for CNC status.
Other methods of debt negotiation and settlement can also pause collection actions. They resume if you fail to make payments on an installment agreement or offer in compromise. If you pay off these agreements, then collections end.
When Should You Hire a Tax Lawyer?
You should hire a tax lawyer in Miami if you are facing collection actions, but it is helpful to hire a lawyer before this if you have tax debt you owe but can’t pay. A Miami state tax lawyer can help you take the right steps before collection actions happen. If you are facing collection actions, an attorney can help you address notices and contact the IRS on your behalf to prevent further action and financial consequences.
Work With TaxSmith, LLC on Your Tax Law Case
The IRS collection process can have significant financial consequences on your life. You don’t have to accept the financial harm. The IRS is willing to work with taxpayers, especially if you cannot financially meet your tax obligations.
At TaxSmith, LLC, we can help you work with the IRS and negotiate a reasonable outcome to your tax debt. We have over a decade of tax law experience, and we know what options are available to you to pause collection and resolve your debt. Contact us today or visit our office in Jacksonville Beach.
