How the IRS Is Resuming IRS Debt Collection

The IRS is resuming its IRS debt collection processes. More extensive unemployment checks, tax credits, and a pause in tax debt collection are just a few of the benefits the government offered to many Americans affected by the coronavirus pandemic.

Now, many of these programs and benefits have ended. The IRS has resumed its tax debt collection efforts, which had been placed on hold for the past few years. If you’ve recently received a notice from the IRS about an unpaid tax bill (or know you still owe the IRS money), contact Highland Tax Resolution. We can help you work with the IRS to find a tax settlement and resolve your outstanding tax balance.

Why the IRS Is Resuming its Debt Collection Activities

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.

Now, their backlog has been cleared, and they’re 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 You Could Be Affected: Notices

You’ll most likely see more notices and letters from the IRS reminding you about your unpaid tax account. Luckily, some of these notices will be different because they should be easier to read and understand.

As part of the Inflation Reduction Act funding, the Simple Notice Initiative aims to reduce confusion for taxpayers by simplifying and shortening the standard notices. By filling season 2025, the IRS hopes to have updated the roughly 200 notices they most commonly send. After this completion, the IRS will examine and simplify other forms, such as those sent to business taxpayers.

You Could Also Get Audited

Another consequence of the Inflation Reduction Act was that the IRS got more money. This means it has more resources to conduct audits. This year, 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 tax accounts as possible.

Wherever the IRS can find money and assets from taxpayers with unpaid taxes, the IRS will undoubtedly try to collect. Keep in mind that the coronavirus pandemic brought with it a significant hit to IRS revenue, and there’s a strong desire for the 2024 tax year to be a big rebound for the IRS.

What You Should Do If the IRS Tries to Collect From You

The best solution to IRS tax collection is to be proactive about your tax debt. It is more likely that the volume and aggression of letters and threats will increase over time instead of decrease. The faster you can get the IRS on board with a tax resolution option, such as a repayment plan or an offer in compromise, the less stress you’ll experience.

Don’t forget that the longer your tax balance goes unpaid, the more the IRS will charge in penalties and interest. Therefore, even if you feel you’re in over your head, waiting and doing nothing will only cost you more money and hassle in the long run.

Get Help From Highland Tax Resolution

To ensure you’re doing everything correctly and to compel the IRS to leave you alone, consider consulting with an experienced tax professional. Highland Tax Resolution can help you attain an acceptable resolution and peace of mind.