How to Immediately Halt IRS Collection: Handling Your Debt

Navigating the tax debt waters can be scary and complex, even to the most proficient taxpayer. Engage a tax expert. Here's why.

Category: Tax Planning, Tax Preparation, Tax Resolution | Posted: February 13, 2016

Debt_OpportunityMost procedural opportunities to stop or delay collections present themselves soon after the tax debt is assessed. As a result, engaging professional help for IRS debt settlement sooner than later is absolutely crucial. When a knowledgeable practitioner intervenes early on, the chance for success in delay or absolute cessation of collection activity is fairly high.

Appealing the assessment is a taxpayer’s first opportunity to stop collection. The right to appeal the assessment arises upon receipt of the “Final Notice of Intent to Levy” (sometimes referred to as a Form 1058). Appealing the assessment is a matter best left to a practitioner. Not only is the appeal time sensitive, but it is also procedurally complex and requires extended discussions with senior collection personnel at the IRS.

Even the most sophisticated taxpayer should not engage in lengthy discussions with IRS personnel without representation.

IRS personnel are trained and motivated to find collection sources and to levy those sources. Navigating this collections process successfully requires a trained professional.

If a taxpayer misses the assessment appeal deadline the range of options for collection delay or cessation narrow considerably. The options also become less effective or more costly. Short of entering whole-heartedly into the settlement process (discussed below) the remaining options include filing what is known as a CAP appeal (Collections Appeal Program), filing for injunctive relief in federal court, or requesting a full pay hold. Each of these options will either delay collection for only a short period of time or are very costly.

Entering whole-heartedly into the settlement process offers delay or cessation periods. For example, upon the filing of a request for an offer in compromise collection stops once the request is received and recorded. Also, once an installment agreement to pay the assessment over time is accepted other collection action stops for as long as the scheduled payments are made. Finally, the filing of a bankruptcy petition stops collection while the automatic stay is in place. Filing bankruptcy is a major decision and it should only be done with the help of an expert attorney. Bankruptcy may not discharge your tax debts, but it will stop IRS collections while the automatic stay is in effect.

Engaging a trained professional early on in the collection process is the most advantageous thing you can do as a taxpayer. The amount and effectiveness of collection delay or cessation options are greater at the beginning of the process than they are further down the line.

John Paul Krueger, EA; President & CEO
John (JP) Krueger founded Five Stone Tax Advisers with a passion to help people comply with the complexities of the IRS tax code. Along with compliance, Five Stone also helps clients pay the absolute legal minimum in taxes each year. Five Stone and its related entities have quickly become a leading global tax firm with offices in Zurich, Switzerland and Austin, Texas. Five Stone maintains an industry leading success rate in resolving tax issues for clients around the globe. Prior to starting Five Stone Tax Advisers, JP has led companies in various industries including retail, technology and financial services. At each company he managed, JP’s efforts grew revenue and net income in amounts that far exceeded industry benchmarks. While he now leads over 50 associates in the Austin office, JP’s leadership development began in the United States Marine Corps. An expert in leadership, lean operations, and tax strategies, JP maintains professional licenses including the IRS Enrolled Agent (EA) and Senior Property Tax Consultant (SPTC) designations. JP earned Bachelor’s degrees in finance and information systems management from the University of Idaho. In addition to his work as CEO of Five Stone Tax Advisers, JP also serves on the Board of Directors for Loop 1, Inc. a Global IT company and LifePastor, a community based 501c3 organization. He is also a member of C12 Group, a Christian peer advisory board. JP is married to Kellyn, a Certified Public Accountant and they have two young boys, Luke and Roman. John’s faith and family are a primary focus in his life.

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