Timing within the IRS

Timing within the IRS...

 

The last few weeks have been quite busy, maybe a little stressful, but also quite informative and educational. I decided to steer away from my planned post to discuss a common issue while negotiating with the IRS: time. Understanding the timing the IRS and its systems have to respond to any given taxpayer action can greatly increase the chances of a successful resolution  In one sense, the IRS is actually a fast agency. It is all too common to receive notice after notice and eventually a levy of your bank account or wages soon follows. However, the Collection division of the IRS moves at a snail’s pace when responding to taxpayer’s concerns. It seems a little unfair to say the least and more often than not the taxpayer will lose out. Is there something to learn here…

 

Due to lack of personnel, the IRS automates many of its systems including serving notices to delinquent taxpayers. Rarely does a taxpayer dealing with Collections actually receive a notice from an IRS employee. It is very important to look out for a Final Notice of Intent to Levy (often a LT11 or 1058). These notices given taxpayers 30 days to request a Collections Due Process Appeal to discuss there case with the IRS Appeals Division. Given the recent reduction in lien filings, the final notice of intent to levy is the main IRS culprit for taxpayers. For every individual tax year, the IRS must issue only ONE of these notices and wait 45 days before levying a taxpayer. For example, a taxpayer might have received a notice in 2014 for tax year 2010. It might be the case that the IRS did not issue a levy for the next 2 years. Then one day a notice comes in the mail informing you of a levy on your federal wages, Social Security, etc.

 

By law, the IRS is allowed to issue levies at any time once this final notice is received by the taxpayer. This can really put taxpayers in a bind as it is often the case that there is no recent notice informing the taxpayer of a pending levy. Furthermore, these “Automated Levies” often range in the amount of time that it takes to release them; some take up to a month to release. This can mean that two pay periods can be levied even if you get the levy released due to the administrative and automated processes in place. If you and your family happen to be in a difficult financial situation when these levies occur it can create a significant hardship.

 

Unfortunately, for an agency tasked with taxing the entire US populace these automated systems and legal guidelines are necessary evils. So what is the solution for a taxpayer with the Collections Division on their back? Action!

 

Procrastination may seem like the easy response, however, more than likely it is harder in the long run. Whether you choose to utilize a representative to help you end your tax problem or take on the endeavor yourself, having the time to research what is truly a reasonable amount to pay the IRS will make your life much easier. If it seems like the worst possible time for the IRS to attempt to collect your past due tax debt, then it is actually more likely the best time! Unlike many debtors, the IRS will accept reasonable facts and circumstances and financial hardships as means to pay less than the full amount due or none at all! Letting things build up and potentially moving to an automated function of the IRS will only make it more difficult to get the IRS off your back! Please feel free to call or email me with questions about your specific tax situation and good luck...