Grasping 8 Common Approaches Employed by the IRS for the Collection of Delinquent Taxes


We can help. Call today for a free consultation.

The IRS is widely known for its robust efforts in collecting taxes and pursuing non-compliant taxpayers. Nevertheless, there exist widespread misconceptions about the extent of their powers and the severity of their tactics.

In this article, we aim to demystify common IRS strategies and provide valuable insights from the perspective of a tax relief professional.

If you’ve encountered any of the typical tactics outlined below, we encourage you to reach out to our office at 703-847-0757 for a complimentary consultation to assess your options.

Tactic #1: Seizing Your Home or Assets

Despite the fear surrounding the potential seizure of homes or assets, the reality is that while the IRS can place liens on your property, seizing your primary residence is uncommon. The IRS often opts for alternative collection methods such as wage garnishments, bank levies, or taking accounts receivable for business owners. However, second homes or vacation properties are fair game.

Tactic #2: Jail Time for Unpaid Taxes

Contrary to the myth of imprisonment due to unpaid taxes, the focus of the IRS is primarily on collecting what is owed rather than pursuing criminal charges. Although criminal charges are possible for non-filing and unpaid taxes, they are rare, and prompt addressing of tax debt is crucial to avoid escalating issues.

Tactic #3: Garnishing Your Entire Salary

While concerns about the IRS seizing an entire paycheck through wage garnishments are widespread, the IRS follows specific guidelines considering your income, deductions, and necessary living expenses. Though they can take a significant portion of your net pay, it is not likely to leave you with nothing to live on.

Tactic #4: Freezing Your Bank Accounts

While the idea of the IRS freezing bank accounts is daunting, they typically provide notice before taking such action. You have the right to appeal and negotiate a release of the levy, with a 21-day window to attempt to have the funds returned to your account.

Tactic #5: Never-Ending Interest and Penalties

The fear of accumulating endless interest and penalties on unpaid taxes is widespread. However, there are options for reducing or eliminating them, including negotiating penalty abatements and exploring payment plans with the help of tax professionals.

Tactic #6: Losing Your Passport

Though the IRS has the authority to revoke or deny passports for significant tax debt, this is primarily targeted at individuals actively avoiding their obligations with debts exceeding $50,000. Most taxpayers can avoid passport revocation by engaging in resolving their tax issues.

Tactic #7: Endless Audits

The belief that an audit leads to perpetual audits is a common misconception. IRS audits typically address specific issues within a tax return, and resolving identified concerns can bring the audit to a close.

Tactic #8: Imminent Seizure of Business Assets

While business owners fear the seizure of their assets, the IRS prefers working with businesses to establish payment plans or negotiate settlements, allowing the business to continue operating. Owing payroll (941) taxes, however, presents a more critical situation, as the IRS can pursue both the business and the individual owner.

Understanding the reality behind these common IRS tactics is crucial for taxpayers facing tax issues. While the IRS has extensive powers, they generally prefer resolution over severe enforcement actions.

Seeking assistance from a tax relief professional can help you navigate IRS complexities, negotiate manageable solutions, prevent aggressive collection actions, and safeguard your rights and options.

Don’t let the fear of IRS tactics immobilize you—take proactive steps today to address your tax challenges and chart a course toward resolution.