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  • Brian Barto, EA

The IRS Collections Process: This is What Happens When You Can’t Pay.



If you don’t pay your tax in full when you file your tax return, you’ll receive a bill for the amount you owe. This bill starts the collection process, which continues until your account is satisfied or until the IRS may no longer legally collect the tax; for example, when the time or period for collection expires (in most cases this is 10 years from the date of assessment).


The first notice you receive will be a letter that explains the balance due and demands payment in full. It will include the amount of the tax, plus any penalties and interest accrued on your unpaid balance from the date the tax was due.


The unpaid balance is subject to interest that compounds daily and a monthly late payment penalty. It is in your best interest to pay your tax liability in full as soon as you can to minimize the penalty and interest charges.


If you’re not able to pay your balance in full immediately...



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