IRS Tax Bill Collections: What You Can Do
The IRS has far greater powers than any other bill collector: The IRS has the power to take your wages, bank accounts, and other property without first granting you a hearing. Nevertheless, you aren’t entirely at the IRS’s mercy. Here are some tips that may help you if an IRS collector is at your heels.
- The IRS collection process starts with computerized form letters, which should not be ignored. If you can’t pay, request more time by sending a letter back.
- Carefully prepare your financial information before speaking with the tax collector. Make sure you don’t understate your living expenses.
- Avoid giving bank account and employment information to the IRS over the phone.
- If you don’t want to deal with an IRS collector over the phone, request that your file be sent to the local district office so you can meet with a tax collector to work out a payment arrangement.
- Treat a collector with respect but remember you have rights. Read IRS Publication 1, which explains the Taxpayers’ Bill of Rights.
- Never lie to an IRS employee about your assets or anything else. It is a crime.
- If you can’t pay your taxes all at once, you can propose an installment agreement. If you get an agreement approved, keep to it.
- It is possible, but never easy, to reduce your tax debts through something called an offer in compromise.
- Bankruptcy may work to cancel tax debts or let you pay over time without interest and penalties accruing.
- If you are in dire financial straits, ask the IRS to suspend its collection for financial hardship if your income is very low or if you are out of work.