What is the IRS process to collect tax
Once IRS has a valid tax return in hand IRS take that tax return and inputs into the” CADE” system of Internal Revenue Service and creates a valid notice of assessment. That creates the ” date of assessment. That assessment is known as the TC 150 date.
IRS then sends out a series of Notices and Letters that start from a first tax notice or bill, CP14, until the final notice of intent to levy, CP 504. This process takes about 4 months. The following is a list of most common notices or letters you may receive from the Internal Revenue Service regarding the tax process.
Notices and Letters you may receive from the IRS
* CP 14 Your balance due to IRS.
* CP22A Data processing adjustment and the balance is more than $5.
* CP90/CP297 Final Notice Notice of Intent to Levy and Notice of your right to a hearing.
* CP297A Notice of Levy and your right to a hearing.
* CP91/CP298 Final notice before levy on social security benefit.
* CP501 Reminder Notice, balance due IRS.
* CP503 Second IRS notice on balance due.
* CP504 Final Notice balance due.
* CP521 Installment Agreement reminder notice.
* CP523 Default of installment agreement
After these letters and notices have been sent, if these notices have not been responded to, IRS will always send  the CP 504 notice. It will come  by certified mail.Within 6 weeks from the date on that notice of intent to levy letter, federal tax levies, bank garnishments and federal tax liens will but sent out. IRS must always make a final notice and demand and make sure you had an appeals right on all cases within their system.
So what happens when the cases do out to the local field office
After processing thousands of cases as a former IRS agent I am asked, “just what happens to a case when it comes into the local office“. After cases leave the ACS unit and run there normal course in the “automated” system, IRS realizes the computer can do nothing to stir up the environment enough to make the taxpayer contact the IRS regional office, pay the tax, or work out some sort of deal. So the next steps must be taken.
A process of grading takes place on the” collection potential” of each case. Some of the factors are the dollar amounts that are due, the number of tax periods that tax is owed, the type of tax, whether the case qualifies for high dollar, and is this a “repeat” tax offender
.
IRS wants to make sure from a dollar amount the case is worth pursuing. On some cases, it is simply not worth the effort because of IRS thresholds. These are simply left in the collection system and automatic freeze codes are input on these cases. These cases will probably not be worked for some time.
The number of tax periods owed is an important issue because IRS does not want repeat offenders especially those who willfully neglect the process. These are called multiple delinquent accounts.
Payroll tax cases get the” highest priority” because those are the so called trust-fund cases. This was money held in TRUST for the United States government. These cases are the highest priority at the Internal Revenue Service. The repeat offender is a big determining factor if the case is issued to the field. IRS simply adds the score of these major factors and determines whether or not the case is field worthy.
Once a case becomes field worthy is only half of the factor. At that point the case must be evaluated for a particular field office. Because most of the field offices are over loaded with cases, a determination must be made whether the case is ready to be worked or not. The local office agents who work these cases are called, Revenue Officers. They have a case load that is controlled by management and believe it or not the National Treasury Employees Union. The Union makes sure management is fair and does not overload the employees with high inventories. The system works very well and keeps a great check and balance system.
After a Revenue Officer closes a case, the “que” determines what case should be worked next based on the highest score. The group manager then puts that case into the revenues officers inventory and monitors the case until the case is closed. Periodic checks are made to ensure the case is being worked in the manner and format that has been predetermined by the Internal Revenue Manual (IRM). Now that a Revenue Officer has the case, the next stop is to do a full compliance check on the file, that is to make sure all tax return filings and all current payments are up to date. This full compliance check ensures the case will be worked and closed without other outstanding being owed or unfiled.
Many times the Revenue Officer may ask or pull an ACCURIANT REPORT. This report comes from a search engine that can go back ten years and check on all relative information such as, real property, DMV and such. Also it can search for credit card information and see whether you turned in a loan application when applying for credit. They can easily do an asset search based on the financial statement given to the third party lending or credit card agent.
The next step in the process is to make contact with the taxpayer. They can do this in different ways. The Revenue Officer can call the telephone number that is usually found in the file, send out a letter, or go by and make a field call to the home or the place of business. Depending on the way each Revenue Officer works will determine how the follow up is made. The field call to the home or place of business is usually the best way to handle a new case because it gives the revenue officer a sense of the environment the taxpayer lives or works in. The field call is a wake up call to the taxpayer that IRS is on their case. If the IRS does make a visit to your place of employment or home do not to worry, they are simply wanting to make contact and get financial information necessary to close your case. The same revenue officer will be with you through the duration of the case. Also be advised that if you are not home, they may leave a card or contact a neighbor just to make there point known.
Fresh Start tip, be as friendly as possibly and let them know you will have your representative contact them in the next couple of days and thank them for reminding you of your tax obligation.