Once you receive a bill from the IRS, the collection process begins, and the amount you owe continues to accrue interest and penalties until you pay it in full. It's best to pay the debt in full as soon as possible, but you have some options if you cannot do so. You may qualify for a payment plan or an installment agreement, or the IRS may accept an offer in compromise for a smaller amount to satisfy your debt in full. If you need more time to pay, you may ask the IRS to delay collection and report your account as “not collectible” due to financial hardship.
Collection Information Statements
Before approving your request to delay collection, the IRS will ask you to complete a Collection Information Statement and provide information about your financial status. The Collection Information Statement, Forms 433-F, 433-A, or 433-B, will ask you about:
- Your current personal and business bank accounts, including checking, savings, money market, online, and mobile accounts such as PayPal or Venmo,
- Your investments, such as trusts, certificates of deposit, Individual Retirement Accounts, Keogh plans, Simplified Employee Pensions, 401(k) plans, profit sharing, mutual funds, stock, bonds, commodities such as silver and gold, and other investments,
- Virtual or cryptocurrency, including Bitcoin, Ethereum, Litecoin, Ripple, and others,
- Real estate holdings, including your primary home, vacation property, timeshares, vacant land, and other real estate,
- Other assets such as cars, recreational vehicles, boats, whole life policies, and business assets like tools, equipment, and inventory,
- Credit cards,
- Business information such as accounts receivable, credit cards, virtual currency wallets, exchange, or digital currency exchange,
- Employment information,
- Business information, including officers, partners, and major shareholders,
- Non-wage household income,
- Monthly expenses, and
- Available credit.
Even if the IRS delays the collection of your account, you will continue to accrue interest and penalties until you pay the debt in full.
Hire a Skilled Tax Attorney
If you're amidst the IRS collection process, it's time to bring in a tax professional. Uncollected debts to the IRS could result in significant interest and penalties, seizure of assets, and more. You need a skilled tax attorney to guide you through this process. If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.