IRS Collection of taxes is a multifaceted approach involving increasing the intensity of contact with the taxpayer as the level of noncompliance and/or complexity of the case increases. All IRS collection efforts start with the generation of a computer notice mailed from a regional compliance center. If the computer notice is not successful in collecting past due tax or encouraging the taxpayer to file past due returns, the account is then assigned to the Automated Collection System (ACS). ACS may attempt to collect tax by calling the taxpayer or sending the taxpayer another notice asking the taxpayer to call one of their call centers and resolve the matter. Supporting the efforts of the compliance centers and ACS are collection support staff that are trained to interact with taxpayers that choose to go to their local IRS office to resolve outstanding liabilities. Finally, if these components of the IRS collection system are not successful, a Revenue Officer is assigned to collect the tax.
Compliance Centers are spread across the United States to accept and process tax returns when they are filed. These centers are highly automated and IRS collection begins with basic error correction and computer analysis as returns are entered into the computers housed in these centers. As the computer processes each return error notices, balance due statements and audit alerts are all automatically generated. Each return requiring further collection is placed into a “notice queue” to receive a series of timely notices, each designed to increase compliance. Other avenues of IRS collection are closely tied to the timely delivery of these notices to a taxpayer. An untimely notice can hinder or even prevent further collection action by ACS or a Revenue Officer at a later date. It is nearly futile for a taxpayer to attempt to respond to a computer generated notice by writing the compliance center that generated the notice. As such IRS collection is almost always escalated to the ACS level if the taxpayer cannot full pay his or her liability upon receipt of the notice.
ACS facilitates IRS collection by giving the taxpayer an avenue to discuss minimal solutions to resolving his or her tax debt with an actual human being. ACS can levy wages and bank accounts as well as issue federal tax liens on a taxpayers account. The revenue agents that make outbound and take inbound phone calls have a lot of power to make a taxpayer’s life difficult and to enforce IRS collection. These same revenue agents also have very little power to negotiate or improve a taxpayer’s plight. Solution alternatives reached with ACS are often limited to installment agreements and placing a taxpayer in “hardship” status. IRS collection often gets its brute force reputation from the bank of ACS computers and call centers scattered across the United States. It’s not an uncommon experience for a taxpayer to get lost in this complex “maze” and the pure frustration can become maddening. Often the frustration factor alone results in increased collection by the IRS because it’s simply easier and more time efficient for some taxpayers to pay the computer generated bill, rather than fight it, even when the IRS is wrong.
Having a Revenue Officer assigned to an account is the most intense collection contact a taxpayer will have with the IRS. As the name implies a Revenue Officer is charged with the task of “getting the money.” If IRS collection efforts deem a taxpayer’s account to be assigned to a Revenue Officer it will be sent to the office nearest the taxpayer’s home. Revenue Officers are field agents and will often times show up on the taxpayer’s doorstep. This part of IRS collection can be very intimidating and usually only occurs when accounts are severely non-compliant, or very complex in nature. Although the physical presence of an IRS agent at your front door, or a summons by a Revenue Officer to produce documents to his or her office can give a taxpayer heart palpitations, IRS collection is often most effective at this level. In large part simply having another human being to talk to face to face can facilitate resolution to a taxpayer’s problem in a manner that is win-win for both the taxpayer and the IRS, even more so when a qualified representative is hired by the taxpayer to handle the matter.