The Covid-19 pandemic was rough financially for many Americans, leading the IRS to offer some leniency regarding IRS debt collections. Those with overdue taxes probably noticed a lack of collections letters and emails sent over the last two years. 2024, however, is a different story.
Why Was the Pause Lifted?
While the debt collection pause was intended to relieve taxpayers, there was another key factor to the decision: the IRS was severely backlogged. Temporarily pausing collections allowed the agency to redistribute its workforce to get caught up on unprocessed tax returns. Flash forward to today; their backlog has been cleared, and they are resuming the debt collection aspect of their operations. From high-income earners to those with more modest debts, everybody is at risk of aggressive IRS action now that they have the resources to collect.
How Could It Affect You?
If you owe back taxes, it’s time to look into repayment options. It may seem like the IRS forgot about your balance, but that is certainly not the case. The longer you go without repaying the debt, the more interest your balance will accrue, and you may be subject to additional penalties. At some point, they may even come to repossess your assets.
The good news is that the IRS is an agency that tends to take the easiest route toward debt collection. If you desire to get right with the IRS, many different pathways can lead to a suitable resolution. Installment-based payment plans and offers in compromise are two such options. For a better gauge of the right solution for you or your company’s debt, an enrolled agent can help you assess the situation and provide representation throughout the process.
If the IRS has already reached out to collect your back taxes, or if you are concerned they may do so in the future, reach out to the Highland Tax Group. We know the ins and outs of IRS debt collection and have experience with various debt levels. Contact one of our enrolled agents today.