The IRS Collection Process
Failing to file an income tax return or filing but failing to pay what is due may prompt the Internal Revenue Service (IRS) to begin the collection process. A tax bill, CP-14, is sent to a taxpayer which begins the process. The IRS has been known to increase their collection efforts soon after the bill is sent. They will continue efforts until the tax debt is paid in full.
The bill sent to taxpayers who owe will provide information regarding the amount due and penalties and interest accrued. There may be several other notices to follow if payment isn't received after the initial notice was sent to you. The notices also provide information on where payments can be sent. If you're not able to pay off what you owe in full, you should make an attempt to submit smaller payments.
Failing to pay after several notices have been sent will make collection actions more aggressive. A notice will be sent regarding further collection set to be taken against you.
There are 3 main collection methods the IRS may look to enforce:
- Tax lien against personal property.
- Tax levy that may have personal property seized.
- Refund offset.
In many cases, the IRS will look to place a levy on a bank account or wages; also known as IRS wage garnishment . If you are owed a refund, they may look to subtract what you owe from it. It is also possible for your entire refund to go toward the liability amount owed.