Tax Collections

Tax Collections

I’m In Tax Collections

If you are in tax collections, then it is in your best interest to pay your tax debt as soon as possible to get this weight off your shoulders and to limit the growth in penalties and interest.

If you can’t pay your tax collections on your tax debt in full, both the IRS and State tax authorities offer a number of payment options. Depending on the type of tax you owe, how much and the taxing authority, different options may be available ranging from a short-term extension, installment agreements or payment plans, currently-not-collectible status (uncollectible status) to an offer in compromise to settle your tax debt for less than what is owed. The options will vary depending on whether you are dealing with an IRS or state tax debt (more specifically, which state) and the facts and eligibility of your situation.

A payment plan (also known as an installment agreement) is the most common option to dealing with a tax collection issue when you can’t pay. However, the crux is that before you can enter into any installment agreement with the IRS and generally for most states, you need to be in full compliance. In other words, all of your tax returns must be filed and processed by the tax authority.

If you are facing financial hardship, one of the most favorable tax resolutions is to have your tax collection case placed in uncollectible status. An offer in compromise is significantly more difficult to qualify for and to get approved for. Despite what you hear on the radio or on TV about being able to settle your tax debt for “pennies on the dollar”, it is truly not common for taxpayers to qualify and to get approved by the IRS or State for such a settlement.

Options on what will work for you in resolving your tax collections issue generally will depend on how much you owe and your current financial situation (i.e. ability to pay). Each option has different criteria and some have fees to make a request in addition to any representation fees that you may pay a tax resolution services professional.

To have the most and best options available to resolve and get rid of your tax collections activity, you must be proactive. By taking action as soon as possible, you’ll help ease your stress with the least amount of pain and expense.

If the IRS or State determines that you owe taxes, they can garnish your wages, file and record a lien against your property, seize your assets, and levy your bank accounts. If you owe taxes to the IRS, the following information will help you understand the tax collection process.

The most important thing when dealing with tax collections or any other tax issue is to… take action!!!

Understanding The Tax Collections Process

If you do not pay your tax in full when you file your tax return, you will receive a tax notice (i.e. a bill) for the amount you owe. This first notice that you receive will be a letter that explains the balance due and demands payment in full. It will include the amount of the tax, plus any penalties and interest accrued on your unpaid balance from the date the tax was due.

This bill or notice starts the collection process, which continues until your account is satisfied or until the IRS or state may no longer legally collect the tax; for example, when the time or period for collection expires. While the IRS has a statute of limitations in which collections can expire, many states have no statute of limitation – meaning collection efforts will continue and remain on their books forever…

When a tax bill is sent to you, if you do not respond to the first notice or subsequent notices, the account becomes delinquent. Delinquent accounts will eventually lead to more enforced collection action.

It is important to be proactive and make arrangements to pay the tax due voluntarily. If you do not contact the IRS or state, they may take more aggressive tax collection actions in order to collect the taxes. For example, they may:

  • File a Notice of Federal Tax Lien or State Tax Lien
  • Serve a Notice of Levy
  • Offset a federal or state refund in which you are entitled
  • Levy your bank account or garnish your wages
  • And more


Even if a taxpayer works out a payment solution with the tax authority, it may file a tax lien to secure the government’s interest. The lien is used to establish priority as a creditor in competition with other creditors in certain situations, such as bankruptcy proceedings or sales of real estate.

A tax lien is a legal claim to your property, including property that you acquire after the lien arises. The IRS or state may also file a tax lien in the public records, which publicly notifies your creditors that the tax authority has a claim against all your property, including property acquired by you after the filing of the tax lien.

The filing of a Notice of Federal Tax Lien or Notice of State Tax Lien may appear on your credit report and may harm your credit rating. Therefore, it is important that a taxpayer work to resolve a tax liability as quickly as possible, before lien filing becomes necessary. Once a lien arises, the tax authority generally cannot release the lien until the tax, penalty, interest, and recording fees are paid in full or until the tax may no longer legally collectible.

Additional enforcement action could include serving a notice of levy to attach taxpayer income such as wages, social security benefits and retirement income or assets such as bank accounts. In some cases, the IRS or state will take enforcement action by seizing and selling property.

In addition, any future federal tax refunds or state income tax refunds that you are due may be seized and applied to your tax liability. These actions occur only after giving the taxpayer an opportunity to voluntarily pay the debt, make arrangements to pay, or supply information to show that payment would create hardship.

You can also appeal most tax collection actions both before and after a specific action takes place, however there are often strict deadlines that need to be met.

Samaritan Tax Relief Tax Collections Support

One of your most important rights as a taxpayer is your right to have a qualified tax resolution professional, such as an Enrolled Agent (EA), represent you in front of the IRS and/or States and provide collections support.

When you hire Samaritan Tax Relief to represent you with a tax collections issue, we will guide you through the collection process while advocating on your behalf and protecting your interests.

Depending on the matters involved and the tax resolution option pursued, your collection case may remain open anywhere from a couple of months to several years. However, as our client, our efforts will be focused on resolving your case as quickly and efficiently as possible.

Samaritan Tax Relief is here to help you because when you’re dealing with a tax collections problem, the worst thing you can do is to do nothing at all? The best decision is to take the necessary first step and to get help now!

If you are unable to resolve your collections problem without help, you can get help from the tax resolution professionals at Samaritan Tax Relief.

Please take a look at additional information and advice on some of the more common tax collection resolutions available:

  • Installment Agreement
  • Innocent Spouse Relief
  • Injured Spouse Relief
  • Currently Non Collectible or Uncollectible Status – a delay in collection actions until your financial condition improves
  • Offer in Compromise
  • Collection Appeals
  • Bankruptcy


Click on the “Get Help” button at the top of the page to take that first step.