The IRS Has More Staff and Aggressive Collection Tactics: What to Do if the IRS Is Pursuing You

After the Covid-19 pause, the IRS has roared back to life. The agency now has increased funding, and delinquent taxpayers may find an agent at their door sooner than later.

While each taxpayer’s situation is unique, here’s a brief overview of what we’re seeing from the IRS and what taxpayers should know about these more proactive collection practices. If you have an outstanding tax debt, contact Highland Tax Resolution.

The End of Collection Time-Out

The Covid-19 pause wasn’t just out of the goodness of the IRS’s heart. The IRS was severely backlogged. Pausing collections allowed the agency to catch up on unprocessed tax returns.

Having cleared the backlog, they’re resuming debt collections. Everybody is at risk of aggressive IRS action, from high-income earners to those with more modest debts.

The IRS’s Goal: A Lucrative 2024

The Inflation Reduction Act, which became law in 2022, provided the IRS with a boost to its budget. As such, the agency is hiring to help go after delinquent taxpayers and make 2024 a banner year for collections.

The result is that many forms of IRS-taxpayer communication have been more aggressive. Taxpayers in all income brackets have an elevated risk for an audit. Cases are being pushed along more quickly than usual in an attempt to process as many as possible.

How the Return of Collections Could Affect You

If you owe back taxes, it may seem like the IRS forgot about you. That’s likely not the case. You either have or will receive collection notices. The volume and aggression of letters and threats will only increase.

The best solution to IRS collection notices is to be proactive about your tax debt. The faster you can get the IRS on board with a repayment plan or an offer in compromise, the less stress you’ll experience.

Even if you feel you’re in over your head or know you’re unable to pay your entire tax debt, waiting and doing nothing won’t make the IRS forget you. 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, the IRS may even go after your assets.

Here’s the good news: The IRS tends to take the easiest route when collecting debts. They will work with you to resolve the debt, but you must respond to their letters.