IRS Enforcement & Collections

When the IRS believes a tax balance is overdue, it has powerful collection tools. For many taxpayers, the most stressful part is not the number on the notice, but what could happen next. Wage garnishment, bank levies, federal tax liens, passport restrictions, and aggressive enforcement timelines can escalate quickly, especially when notices are missed or the IRS believes you are avoiding payment. IRS collection activity is not always about wrongdoing. It is often triggered by a filed return with an unpaid balance, an unfiled return that the IRS reconstructs and assesses, a failed payment plan, or a business payroll issue that snowballs into a crisis.

Frazier Law helps individuals, families, and businesses respond to IRS enforcement and collections with practical risk management and strong defense. Led by principal attorney Charles R. Frazier and certified public accountant (CPA) Rick Miller, the firm has assisted clients since 2009 with tax controversies and IRS defense. Charles is a former IRS agent and holds an LL.M in Taxation. He is also a Chartered Financial Consultant (ChFC). With a multi-state practice, federal authority, and licensing in Tennessee, Michigan, and Texas, Frazier Law handles complex federal tax matters regardless of where you live.

This page explains how IRS collections work, what common enforcement actions mean, and how experienced representation can help you regain control and pursue a resolution that fits your finances and your long-term goals.

How the IRS Pursues Unpaid Tax Debt

IRS enforcement and collections generally begin after the IRS assesses a tax liability. Assessment is the official recording of a tax debt on the IRS books. Once a liability is assessed, the IRS can begin collection activity unless collection is paused by law or by a specific arrangement, such as an active installment agreement, certain appeal rights, or a bankruptcy stay.

Collections cases are often misunderstood because they can involve multiple tracks at once. You may be dealing with unfiled returns, an audit assessment, penalties, and collection notices at the same time. In business cases, employment tax issues can trigger both collection actions and personal exposure for owners, officers, or responsible individuals. A plan that addresses only one piece can fail if it ignores the full picture.

The IRS Collection Timeline in Plain English

Most collection cases follow a predictable pattern. The IRS sends a series of balance due notices. If the balance remains unresolved, the IRS may issue a Final Notice of Intent to Levy and Notice of Your Right to a Hearing, along with a separate notice about a federal tax lien filing. These notices matter because they can open and close important windows to request hearings that stop collection activity while your case is reviewed.

If the IRS moves forward with enforcement, it may levy wages, levy bank accounts, intercept tax refunds, or take other collection actions. The IRS can also file a Notice of Federal Tax Lien, which can affect credit, business relationships, and asset transactions.

The Ten Year Collection Statute and Why It Is Not a Strategy by Itself

In many cases, the IRS has ten years from the date of assessment to collect a tax debt. That deadline is often called the collection statute expiration date. However, certain events can suspend or extend the time the IRS has to collect, such as bankruptcy, certain appeals, and some requests for relief. Relying on the idea that a debt will simply run out is risky if you do not understand how tolling rules work and what actions can extend the timeline.

A smarter approach is to evaluate your options early, identify what pauses collections, and pursue a resolution that protects income and assets while moving the case toward closure.

Common IRS Collection Actions and What They Mean

IRS enforcement is often described as if it is one tool, but it is actually several different tools with different triggers, procedures, and consequences. Understanding the difference helps you choose the right response.

Bank Levies

A bank levy is one of the fastest ways the IRS can create immediate pressure. When the IRS levies a bank account, the funds on deposit are typically frozen for a short period before the bank sends the money to the IRS. That waiting period can create an opportunity to request a release, prove hardship, or correct an error, but the window is limited.

Bank levies can disrupt payroll, vendor payments, and basic living expenses. For business owners and self-employed taxpayers, the operational damage can be more severe than the underlying tax balance because a levy can break cash flow.

Wage Garnishment and Continuous Levies

The IRS can levy wages and certain other recurring income sources. Wage levies are often continuous, meaning they remain in place and keep collecting from each paycheck until the levy is released. While the IRS must leave you a portion to live on, the exempt amount is often far less than a household needs in the real world. For many taxpayers, a wage levy is the point where the situation becomes unsustainable.

Federal Tax Liens

A federal tax lien is a legal claim against your property arising from an unpaid tax debt. A lien attaches to many types of property and can complicate refinancing, selling assets, transferring business interests, or obtaining credit. The IRS may file a public Notice of Federal Tax Lien to protect its interest, which can have real-world impacts even before the IRS takes money.

Not every case calls for the same lien strategy. Sometimes the goal is to avoid a lien filing. Sometimes the goal is to seek withdrawal, discharge, subordination, or another form of relief that supports a larger resolution plan.

Seizures and Asset Enforcement

Seizures are less common than levies, but they are possible in serious cases. The IRS can seize certain property and sell it to satisfy tax debt. The decision to seize usually reflects a belief that less intrusive collection tools are not working or that the taxpayer is not cooperating. Representation can matter significantly when a case is headed toward this level of enforcement, because the earlier the case is stabilized, the more options typically remain.

Passport-Related Consequences for Seriously Delinquent Tax Debt

In certain circumstances, the IRS can certify a tax debt as seriously delinquent, which can lead to passport-related restrictions. This issue can affect travel plans, professional obligations, and family needs. The rules and exceptions are specific, and not every tax debt triggers certification. If travel is part of your work or your life, you should address this risk early rather than hoping it will not arise.

Why IRS Collection Cases Escalate So Quickly

Many people assume that if they communicate with the IRS, collections will stop. Communication helps, but only when it is paired with the right procedural step. The IRS is a large system with deadlines, automated notices, and internal rules. A conversation with an agent does not necessarily suspend enforcement. A properly filed request for a hearing or a properly documented resolution application often does.

Collections also escalate when the IRS believes financial information is incomplete, returns are missing, or the taxpayer is moving assets to avoid payment. Even innocent mistakes can look suspicious if the paperwork is inconsistent. A strong defense focuses on accuracy, documentation, and a strategy that anticipates how the IRS will interpret what it sees.

IRS Resolution Options for Enforcement and Collections

There is no single best solution for every taxpayer. The right option depends on whether returns are filed, whether the IRS agrees with the underlying balance, what your cash flow looks like, and whether there are assets or equity the IRS will expect you to use. The best outcomes usually start with a clear diagnosis of the case.

Installment Agreements

An installment agreement is a structured payment plan. Some plans require detailed financial disclosures and negotiation. Others can be streamlined if the balance meets certain criteria and the taxpayer is compliant with filing obligations.

A payment plan can provide breathing room and can stop many forms of active enforcement as long as you stay current. The risk is that a poorly designed plan can fail, especially if it does not account for seasonal income, business volatility, or upcoming tax obligations.

Currently Not Collectible Status

If paying the IRS would prevent you from meeting basic living expenses, the IRS may place your account in currently not collectible status. This does not erase the debt, but it can pause active collection efforts. Interest and penalties can continue, and the IRS can review your financial situation later. This option can be appropriate for taxpayers who are temporarily unable to pay due to job loss, illness, major life changes, or business disruption.

Offer in Compromise

An offer in compromise is a settlement program that can allow some taxpayers to resolve their tax debt for less than the full amount. The IRS generally evaluates whether it can expect to collect the balance within the remaining time on the collection statute, based on your income, expenses, and assets. Offers require careful preparation and realistic expectations. They can be powerful when the numbers support them, but they can be denied if the IRS believes there is collectable equity or if compliance is not in place.

Penalty Abatement

Penalties can significantly increase a tax balance. In some cases, penalties can be reduced or removed through reasonable cause arguments or other forms of relief. Penalty abatement is not a cure-all, but it can be a meaningful part of a larger resolution, especially when the underlying tax is manageable but the penalties make the total debt unrealistic.

Innocent Spouse and Related Relief

For married taxpayers, there are situations where one spouse may seek relief from a tax liability tied to a joint return. These cases are fact-specific and can involve complex procedural issues, timing rules, and evidence. When appropriate, pursuing spousal relief can shift the direction of a collections case and protect the person who should not be held responsible.

Challenging the Liability When Appropriate

Some collection cases are not simply about inability to pay. They are about an incorrect balance. The IRS may have assessed based on substitute for return procedures, missing documentation, misapplied payments, or audit adjustments that were never fully addressed. A successful defense may require correcting filings, requesting reconsideration, or pursuing appeals so that the case is not built on the wrong numbers.

Special Concerns for Businesses and Payroll Tax Collections

Business tax problems can escalate quickly because they often involve payroll taxes, trust fund issues, and recurring obligations. When a business falls behind, the IRS may pursue the business, but it may also pursue individuals.

Employment Tax Enforcement and Trust Fund Exposure

Employment taxes include amounts withheld from employees and the employer’s share. The IRS takes failures in this area seriously. In certain cases, the IRS can assess a Trust Fund Recovery Penalty against responsible individuals, which can make owners, officers, or other decision-makers personally liable for certain unpaid payroll taxes. These cases require a careful review of responsibility, willfulness, and the factual record.

Keeping the Business Alive While Resolving the Past

A business resolution strategy needs to do more than deal with old balances. It must also keep the business compliant going forward. The IRS is far more likely to work with a business that is current on deposits and filings. Often, the first objective is stabilization: stopping levies that disrupt operations, setting realistic payment terms, and building a compliance system that prevents the problem from repeating.

Cash Flow Reality and the IRS View of Expenses

Business owners often have legitimate expenses that do not fit neatly into the IRS categories. The IRS also scrutinizes owner draws, intercompany transfers, and discretionary spending. A CPA-informed approach can help present financial information in a way that is accurate, credible, and aligned with how the IRS analyzes ability to pay.

Collection Due Process Hearings and Appeals

Many people do not realize that there are formal pathways to challenge collection actions, propose alternatives, and protect rights. These pathways are time-sensitive, and missing a deadline can change your leverage.

Collection Due Process Hearings

A collection due process hearing can allow you to challenge certain collection actions, propose a payment plan, request currently not collectible status, or submit an offer in compromise. In some cases, you can also challenge the underlying liability if you did not have a prior opportunity to do so. Importantly, a timely request can often stop levy action while the hearing is pending.

Equivalent Hearings and Why Timing Matters

If the deadline for a collection due process request has passed, an equivalent hearing may still be available, but the procedural protections can differ. This is why early action matters. Deadlines are not just administrative. They can determine whether enforcement pauses and whether you can pursue certain remedies.

What to Do If You Received a Final Notice or a Levy

If you have received a Final Notice of Intent to Levy, a lien notice, or you have already been levied, you should assume the situation is urgent. That does not mean it is hopeless. It means the response should be strategic and immediate.

A strong early response often includes identifying the exact type of notice, confirming deadlines, obtaining account transcripts to confirm what the IRS believes is owed and why, and selecting the appropriate procedural move to halt or limit enforcement. It also includes verifying that all required returns are filed, because many resolution options require compliance.

Even if you cannot pay right now, there are often steps that can prevent further damage while a longer-term solution is built.

How Frazier Law Approaches IRS Collections Defense

IRS collections cases are won with preparation, documentation, and a strategy that fits the taxpayer’s reality. Frazier Law approaches collections defense with the understanding that the IRS is both a system and an adversary. The system follows rules and forms. The adversary applies pressure when it believes pressure is needed.

With leadership from a former IRS agent and a CPA, the firm is positioned to address both the legal and financial sides of a collections matter. That matters because many IRS cases fail at the intersection of law and accounting. A legal argument can fall apart if the financial presentation is weak. A financial proposal can fail if it does not align with procedural requirements or appeal rights.

Frazier Law works to do the following in a collections case:

• First, stabilize the situation by addressing urgent enforcement risk, including levies, wage garnishments, and lien consequences.
• Second, verify the numbers by reviewing IRS transcripts, filing history, assessments, penalty calculations, and payment applications.
• Third, build a resolution plan that is realistic, defensible, and aligned with IRS standards, whether that plan involves a payment agreement, currently not collectible status, an offer in compromise, penalty relief, or a challenge to the liability.
• Fourth, protect long-term compliance so the resolution is not undone by a new filing problem or a new balance due.

What Information Helps Your Case

You do not need to have everything perfectly organized to get help, but certain information can move a case forward faster. Notices from the IRS, recent tax returns, wage and income documentation, bank statements, business financials, and a summary of major monthly expenses can be useful. If you have experienced a major life event, such as a job loss, divorce, medical issue, or business interruption, documenting that story can also matter because it helps explain the financial reality behind the numbers.

If you are missing returns, that is common in collections cases. The solution is usually not to guess. It is to reconstruct and file correctly, then integrate those filings into the broader defense strategy.

Start Protecting Your Income, Assets, and Peace of Mind

IRS enforcement is designed to create urgency, and it often succeeds. The good news is that the IRS also has resolution pathways for taxpayers who engage the process the right way. The key is to act before enforcement actions compound the damage and before deadlines remove options.

Frazier Law represents clients in IRS enforcement and collections matters nationwide, with licensing in Tennessee, Michigan, and Texas and federal authority to handle complex federal tax issues regardless of location. If you are facing levies, liens, wage garnishment, or escalating collection notices, the firm can help you understand what the IRS is doing, why it is happening, and what a realistic path forward looks like.

Contact Frazier Law to discuss IRS enforcement and collections defense and to begin building a strategy that protects what you have worked for while pursuing a resolution you can sustain.