We all know that the I.R.S. has broad authority to collect delinquent taxes. However, that authority is not unlimited. In subsequent installments of Tarras on Taxes we will explore some of those limitations and some defenses you may use to combat I.R.S. collection actions.
I.R.S. collection actions typically begin with a letter from the I.R.S.'s Automated Collect System or ACS. These letters ask that you either remit your balance in full or contact the I.R.S. to speak to an ACS employee who will attempt to resolve your tax delinquency.
The initial, and maybe all, of the ACS contact is via telephone. I suggest you note the ACS employee's name and employee number. Also note the substance of your conversation and especially any information the employee requests and any response dates.
The I.R.S. ACS employee has the authority to receive financial information, request additional information, consider installment agreement requests, lien your property, levy or remove levies from your property, and even place your delinquency in currently uncollectible status.
If your delinquency is large and/or your case complex, the I.R.S. may refer your case to a local office for collection. In this case you will be dealing with a revenue officer. An I.R.S. revenue officer enjoys all of the authorities that an ACS employee enjoys. The revenue officer, however, has the additional authority and ability to request an interview, contact third parties, summons bank account and other financial information, and investigate much more broadly and thoroughly than an ACS employee.
Both ACS and revenue officer contact should be taken seriously. You should be proactive in dealing with the I.R.S. Do not think that your delinquency is going to disappear because you don't act. You should adhere to response dates. If you need more time to comply with I.R.S. requests, call the I.R.S. and ask for more time. Do not ignore the I.R.S. response dates. The I.R.S. will proceed without your input should you not cooperate.
I will discuss installment agreements, liens, levies, and summonses in subsequent installments of Tarras on Taxes.
If you have been contacted by the I.R.S., please contact us for a consultation. We will evaluate your case and determine which course or courses of action are appropriate for you. You may also post any questions on our tax and accounting forum.