How the Back Tax Collection Process Works


If you do not voluntarily pay your back taxes to the IRS, the collection process is a series of actions they can take to collect the taxes owed. When you receive a bill for taxes owed, if you do not pay the amount on time and in full, the collection process will begin. In this article, you will find an overview on filing, billing and collection, ways to pay your taxes and the collection actions you may face if you do not pay.


Filing a Return, Billing and Collection

Each working citizen files a return. After you file, the IRS assesses your tax return to determine your correct tax and they keep record of the amount. If you owe, you are sent a bill for the amount due plus any penalties and interest. If you do not pay after receiving the first bill, you will receive at least one more bill. If you have still not paid after you receive your final bill, the IRS can take enforcement action to collect the debt.

When you get a bill from the IRS, check all of the information first. If the information is correct, pay the amount in full. If you are unable to do so, contact the IRS. Have your financial information available and be prepared to discuss your situation. Based on the amount you are able to pay, they may be able to provide an alternative solution.

If you do not agree with the information on the bill, call the number provided on the bill. Be sure to have your bill, tax returns and other records available to explain why you think your bill is incorrect. If you are right, the IRS will correct your account and send you a new bill if necessary.

If you do not pay or contact the IRS to explain why you disagree with the bill, you may be subject to the collection process.


Ways to Pay

The best way to avoid added penalties and interest is to pay your tax debt in full. However, the IRS understands if you are unable to do so. Therefore, you have the option to request an Installment Agreement or an Offer in Compromise. Installment Agreements are payment plans that allow you to pay down the existing debt in smaller, more manageable payments. Offers in Compromise are agreements between you and the IRS that settle the debt for less than the amount owed. Both programs have stringent application processes. If you feel you may be eligible, consider contacting a tax debt professional.


The Collection Process

As previously stated, if you cannot pay your tax debt and you neglect to contact the IRS, they may begin the collection process. The IRS has up to 10 years to collect your taxes from the date they were assessed. The most common forms of collection include federal tax liens, levies and seizures.


Tax Lien

A federal tax lien is a legal claim that gives the government the right to all of your property, as well as any property or rights to property you acquire thereafter. The property includes your house, cars, wages and bank accounts. When the IRS issues a lien, a public notice is sent to creditors notifying them that there is federal tax lien attached to your current and future property.


Levies and Seizures

A levy is a legal seizure of property or rights to satisfy your tax debt. Levies can be issued on bank accounts, automobiles, stocks, bonds, boats, pension checks, paychecks and Social Security checks. If your property gets seized, it is sold and the money is used to pay your tax debt. If your bank accounts or wages are levies, the money is directly applied to your tax debt

Seizures and levies have no legal difference. Seizing your assets is often a last resort by the IRS; however, it does occur and when it does the effects can be devastating. The IRS cannot seize your property if you have an Installment Agreement or Offer in Compromise in place or if you are unable to pay due to your current economic situation.



When you owe back taxes, the IRS will provide you will a publication entitled “Your Rights as a Taxpayer.” This publication outlines your rights when faced with the collection process. It includes your rights related to privacy, representation, appeals and judicial review.

In most cases, an appeal can occur before and after the IRS has taken collection actions. If you do not complete the appeal in a timely manner, your appeal rights are lost and the IRS can continue with the collection process. However, if you submit a complete and timely appeal, you are more likely to have an effective appeals process.

The  IRS collection process can be very overwhelming. If you find that you owe back taxes, the best thing you can do is take immediate action. If you are not sure where to begin, consider working with a tax resolution specialist.

At Landmark Tax Group, we have former IRS officers and auditors who will advocate on your behalf. We know how the IRS works and how to protect you and your assets. We know that each situation is unique and we will work with you to create a solution you can afford to get you a fresh start.

If you would like us to review your tax case for FREE, contact Landmark Tax Group now for a free consultation.

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