Houston Taxpayers and the IRS Collection Process

J Thomas Black
Board Certified, Consumer Bankruptcy Law- Texas Board of Legal Specialization

If you do not pay your taxes, the IRS will begin a collection process to get the money that you owe them. Here's how you may see collection play out if are in debt because of unpaid taxes:

  • The first bill you receive in the mail is your notice that the IRS collection process has begun. It will explain how much you owe (the tax, plus any penalties and interest) and it will demand full payment. You must either pay the IRS at that point or send in as much as you can.
  • If you cannot pay in full, you can request a monthly installment agreement.
  • If you cannot pay under the installment agreement, you can propose an Offer in Compromise (OIC). It's highly recommended that you consult a professional Texas IRS problem lawyer to help you with this. An OIC, if accepted, will allow you to pay a reduced lump sum that will settle the debt.
  • If you cannot pay under the installment agreement or the OIC, the IRS might suspend certain collection action because of your financial hardship. They still may file a Notice of Federal Tax Lien while your account is suspended.
  • A federal tax lien is a legal claim to your property and it goes in to effect automatically ten days after you receive your first bill. This can hurt your credit rating and show up on your credit report.
  • The IRS may levy your assets, including your salary, bank accounts, Social Security benefits, and retirement income. They can take your car, boat, or real estate (except your homestead).

In the Houston area, the IRS Automated Collection System in Austin sends out the letters. They will mail a Notice of Levy to your bank or employer if they have enough information about you. The IRS finds most of its levy sources by calling you on the phone and asking, so if you feel uncomfortable answer, definitely call your lawyer first.

If you are facing problems with the IRS, contact Houston tax attorney J. Thomas Black for a free consultation at 888-707-1233.