IRS Enforced Collection Actions procedures and its Alternatives

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IRS Enforced Collection Actions

• IRS Enforced Collection Actions and Alternatives
  to Enforced Collection.

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IRS Enforced Collection Actions

• The Internal Revenue Service is a powerful and
  historically unrelenting creditor. The Internal
  Revenue Code grants the IRS extraordinary powers
  to enforce tax collection. The IRS has greater
  collection powers than those possessed by private
  creditors, which are usually required to obtain a
  judgment in court before forcibly collecting from
  a debtor.
• The enactment of the IRS Restructuring and Reform
  Act of 1998 afforded taxpayers firm rights when
  the IRS seeks to collect unpaid taxes. However,
  many taxpayers are unaware of these rights and
  how to protect themselves from the actions the
  IRS can take against them.

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The Federal Tax Lien
Generally, if you owe 10,000 or more to the
federal government, the IRS will automatically
issue a Federal Tax Lien against you. A tax lien
is put in place after you fail to pay the
assessed amount within ten days of receiving a
Notice and Demand for Payment. The resulting tax
lien is enforceable against all property and
rights to property belonging to you. The IRS
files a public document called a Notice of
Federal Tax Lien. A Federal Tax Lien does not
mean your property will be seized. The IRS is
required to send a Notice of Intent to Levy
before seizure.
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The Federal Tax Levy
A levy is the seizure of your property to satisfy
delinquent tax debt. When you fail to make
arrangements to pay your tax debt, the IRS will
send a Final Notice of Intent to Levy. You have
30 days to respond. After that, the IRS can levy
you at any time. The IRS has the power to seize
your physical property like your home or car, but
also property that is yours but held by someone
else, like your wages, bank accounts or rental
income.
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Wage Garnishment
The IRS can garnish your wages for collection of
your federal tax debt. Wage garnishments are a
type of IRS levy.
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Alternatives to Enforced Collection

• To prevent or stop forced collection action, you
  must take steps to resolve your tax debt.
  Professional help is often very beneficial for
  taxpayers seeking to resolve their tax debt. A
  licensed tax professional can request that your
  account to be marked as not collectible,
  arrange an installment agreement, submit an offer
  in compromise, or request innocent spouse relief.

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Currently Not Collectible Status
When your account is marked not collectible,
the IRS will not pursue enforced collection
actions. However, this does not mean that the
debt is forgiven. The tax liability remains due
and continues to accrue interest and penalties
for the remainder of the statute of limitations
on collection. The IRS will periodically review
your financial situation and, if they see that
your situation has improved, will return your
account to active collection status.
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Installment Agreement
Installment agreements allow you to pay your tax
debt over time. There are many different types of
installment agreements. A licensed tax
professional can help in arranging an installment
agreement that best fits your situation.
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Offer in Compromise
In an offer in compromise, the IRS agrees to
settle for an amount that is less than what is
owed. The IRS will settle a tax debt for one of
the following three reasons doubt as to
liability, doubt as to collectability, and
effective tax administration.
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Innocent Spouse Relief
If your spouse is solely responsible for your tax
debt, you may be eligible for innocent spouse
relief, separation of liability or equitable
relief. If granted, these programs may partially
or entirely relieve you of responsibly for the
tax liability.
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Withdrawal, Subordination, Discharge, or Release
of an NFTL
A federal tax lien is not extinguished until you
fully satisfy your tax liability. However, in
certain circumstances, a federal tax lien can be
withdrawn, subordinated or released even if you
had not fully satisfied your tax liability.
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