In my practice in Rochester NY, we find that the IRS collection process can be complicated and cumbersome. Below is a high-level summary of the IRS Tax collection process.
Tax Assessment
After tax return is filed, the IRS will assess the amount of tax due. If adequate with holdings and / or payments were made the IRS will be satisfied and there will be no further communication with the IRS.
If the tax has not paid in full when due, the IRS will start sending collection notices reflecting the additional tax owed. The IRS can and most likely assess penalties for failure to pay taxes or make estimated payments. If a tax return was not timely filed, the IRS can impose additional penalties for the failure to file a tax return.
The IRS may eventually assess the tax based on a Substitute for Return (SFR). In many cases, an SFR will overstate the amount of tax due and soon after the taxpayer will start receiving a throng of IRS letters requesting immediate payment and putting them on notice of impending enforced collection activity.
Tax Collection Notices
If no action is taken to address the outstanding tax debt the IRS will continue to seek collecting the remaining tax due. This will primarily be accomplished through a number of common letters. These letters mostly serve as reminders of the outstanding taxes due. The IRS usually provides sufficient time to proactively address these issues before taking action. If nothing is done after receiving several of these notices, the IRS will begin issuing notices regarding the intent to take enforced collection activity. This could include intent to levy.
Tax Enforcement
If taxes are not paid timely, and the IRS is not notified why the taxes cannot be paid, the law requires that enforcement action be taken. This enforcement is through tax collection activities.
Tax Collection Activity
If the notices are disregarded the IRS will become more aggressive and immediately affect the rights of the taxpayer. This may include the following;
- Retain refunds
- File a Tax Lien against the taxpayer.
- Levy income (wage garnishment) or assets of the taxpayer.
- Revoke US passport.
If you or someone you know is having an IRS or a State tax issue, please feel free to contact me at either (585)-210-7405, or by email at jasonzukoski@integratedtaxresolutions.com.
Jason Zukoski
Integrated Tax Resolutions / 585Tax
395 Helendale Rd.
Rochester, NY 14609
Ph. (585) 210-7405
jasonzukoski@integratedtaxresolutions.com
www.integratedtaxresolutions.com / www.585tax.com