Restrictions on IRS collection practices for Tax Debt

By | November 30, 2015

After you file your tax return and/or a final decision is made establishing your correct tax, we record the amount in our records. If you owe, we will send a bill for the amount due, including any penalties and interest. If you owe, and you don’t pay or make arrangements to settle the amounts you owe, we can take collection actions to collect the debt. Our goal is to work with you to resolve your debt before we take collection actions. If your bill is for an individual shared responsibility payment as a result of the Affordable Care Act, the amount owed is not subject to penalties, levies or the filing of a Notice of Federal Tax Lien. However, interest will continue to accrue and the Service may offset federal tax refunds until the balance is paid in full.


IRS Debt Collection Process

There are few experiences more unpleasant than being on the wrong end of the debt collection process. And when the agency pursuing you is IRS with all of its collection powers, the anxiety may be worse. Fortunately, a provision in the tax law offers some relief by requiring IRS to comply with fair tax collection practices, similar to the protections provided by the Fair Debt Collection Practices Act, which governs private creditors and their customers. Under the tax law’s fair collection provision, IRS is subject to restrictions governing communications with taxpayers and prohibitions on a variety of abusive collection processes and harassment techniques.

How can the IRS Collect Tax Debt?

For example, IRS cannot communicate with you at any unusual time or place (e.g. no phone calls after 9 pm) or use (or threaten to use) violence or other criminal action to harm the physical person, reputation, or property of any person. IRS also cannot use obscene or profane language, or language that has the natural consequence of abusing the person hearing it or reading it. You should know that if IRS actions violate any of the fair tax collection rules, you may be entitled to bring an action against IRS for civil damages.


How to appeal an IRS decision

How to appeal an IRS decision You have the right to appeal most collection actions to the IRS Office of Appeals (Appeals). Appeals is separate from and independent of the IRS Collection office that initiates collection actions. Appeals ensures and protects its independence by adhering to a strict policy prohibiting certain communications with the IRS Collection office or other IRS offices, such as discussions regarding the strength or weakness of your case. When an IRS office is to be engaged in discussions, you will be invited you to participate in the conference, or provided any written document to give you an opportunity to comment. Your main options for appeals are the following: Collection Due Process or Collection Appeals Program