Dealing with IRS Collections Procedures

The very first step of the IRS collections process begins when you file your tax return without putting in the amount due yet. The IRS will then send you a bill for the amount owed. This first bill will just bear the explanations behind your amount due and the need for you to make a full payment. If you don’t pay attention to this notice, another one will be sent to you making reference to the dates of coverage and amount due as well as any applicable penalties. Continuing to ignore what the IRS sends you would result to the receipt of notices that are more threatening in nature. These notices, on the other hand, follow a specific format and are sent in a particular order. Looking them up from the IRS will provide you more information and help you understand what each notice implies. In general, receiving a number of notices clearly states that you have an IRS problem.

If you believe that there were wrong entries in your payables, you can send a letter to or call the IRS. You can then have a discussion to straighten out issues and request for necessary adjustments. For example, if you continue to receive notices even if you have already settled your dues, you may give them photocopies of your proofs of payment. Just remember that you should keep the original documents for future reference.

In the case where you feel you cannot afford to pay for the full amount of your taxes, certain payment options are available. You may request for an arrangement of an installment payment plan. In this agreement, you pay for your taxes over a lengthened period, you incur the applicable interest for the unpaid balance, and still are penalized until you have completely settled the full amount.

If you really find it difficult to pay even a partial amount, options are still available. Upon request, the IRS may defer their collection efforts for a certain period and consider you as currently not collective. The downside of this option, however, is this still causes you to be fined with penalties and interests that will most likely accrue making your IRS problems even worse.

OIC, or Offer in Compromise, is a solution most sought after by tax payers. When given, this allows you to pay only a percentage of the total amount due and the rest of the debt is forgiven. Although the chances of getting an approval for this are slim, it is always worth the while as this effectively ends your IRS problem, at least until the next year.

There are many cases when all it requires to settle an IRS tax issue is to simply contact your local IRS office. There is also a significant number of incidents when it is wise to refer to a professional tax attorney or accountant for advice on dealing with any IRS collections method. Even though you are indebted, the fact still remains that you need to be treated fairly and justly. Just remember that it is in your best interest to respond to any IRS notice. Doing otherwise results to the enforcement of more threatening and more invasive collections procedures.