Opening a letter from the IRS is never pleasant.

Opening one that says:

“Your account has been assigned for enforcement action.”

and shows a balance of$97,528.92 is something entirely different… Nerve-wracking.

I am currently helping a taxpayer who received exactly this type of notice.

The letter states that the IRS is trying to collect unpaid taxes and warns that enforcement action may includeseizing wages or property. It also tells the taxpayer that the IRS needs to hear from them within 10 days.

At this stage, this is NOT a notice I would put aside and plan to deal with “later.”

But it is also NOT a reason to panic.

It is a reason to ACT

What Does “Assigned for Enforcement Action” Mean?

By the time a taxpayer receives a collection notice at this stage, the IRS is no longer simply reminding them that there is a balance on the account.

The IRS has collection tools available to it, which can include liens and levies against certain income, bank accounts and property, depending on the procedural stage of the case and the notices that have already been issued. The exact taxpayer rights and deadlines depend on the particular notice received.

That is why one of the first things I want to know when a client brings me a collection letter is:

What happened before this letter?

I want to see the prior notices. I want to know which tax years are involved. I want to understand how the balance was created. I want to know whether all required returns have been filed and whether the IRS balance agrees with the taxpayer’s records.

With a balance of$97,528.92, I would not start by blindly asking, “How much can you pay every month?”

First, I want to understand the account.

Don’t Assume That “Amount Due” Is the End of the Analysis

This is something I have seen repeatedly in my practice.

A taxpayer receives an IRS notice with a large number printed on it and assumes there are only two choices:

Pay it or ignore it.

There may be considerably more to investigate.

Is the underlying tax correct?

Were all payments properly credited?

How much of the balance represents tax, and how much represents penalties and interest?

Are there penalties for which relief may be available?

Are there missing or unfiled tax returns?

Has the taxpayer previously entered into a payment arrangement?

What collection actions have already occurred?

Those questions matter before deciding how the case should be handled.

What If You Really Do Owe the Money?

Sometimes, after reviewing everything, the answer is simple:

Yes. The tax is legitimately owed.

That still doesn’t mean a taxpayer who cannot write a $97,000 check has no options.

If the balance is correct, then we move to the next question: what can realistically be done about it?

Depending on the circumstances, there may be different options – an installment agreement, an Offer in Compromise, or in some situations a temporary delay in collection when the taxpayer cannot pay.

But there is no one solution that works for everybody. Income, expenses, assets, equity and overall tax compliance all matter.

Which alternative makes sense depends heavily on the taxpayer’s financial situation.

Income, necessary living expenses, assets, equity, tax compliance and other factors can all become important.

And sometimes the best solution is not the one the taxpayer initially expected.

Please Don’t Ignore These IRS Letters

This is probably the most important point.

People sometimes avoid IRS correspondence because they are scared of what is inside.

I understand the reaction.

But ignoring a collection problem generally doesn’t make the underlying tax debt disappear. At various stages of the collection process, the IRS may file a federal tax lien or levy property or rights to property. Certain collection notices also provide appeal rights with specific deadlines, which makes opening and reviewing IRS correspondence promptly particularly important.

If you receive an IRS notice,open it.

If you don’t understand it, get help understanding it.

If you disagree with it, investigate why.

And if you owe the money but cannot pay it, determine what options are actually available rather than simply doing nothing.

One more problem I see lately is simply reaching the IRS.

People sometimes think, “I’ll just call the IRS and straighten this out.” Unfortunately, it is not always that simple. Getting through can be difficult, cases can move between departments, and resolving a collection matter may require repeated follow-up.

This is one of the reasons I tell clients not to wait until the situation becomes urgent. If the letter gives you 10 days to respond, don’t put it on the kitchen counter for three weeks and hope the next letter will be better.

$ 97,528.92 Is a Big Number. Start by Breaking Down the Problem.

When I work on a back-tax case, I don’t look only at the large balance printed on the front of the notice.

I break the problem apart.

• What years are involved?
• What created the liability?
• What has already been filed?
• What has already been paid?
• What penalties were assessed?
• What collection stage are we in?
• And what is the taxpayer realistically able to do?

Once those pieces are understood, an $ 97,528.92 IRS problem becomes a series of questions that can actually be addressed.

That is what I am doing with this case now.

I don’t know yet what the final result will be, and I would never promise a particular outcome before doing the work.

But I do know one thing:

Ignoring a letter that says “assigned for enforcement action” is not a strategy.

If you received an IRS collection or enforcement notice and are not sure what it means or what to do next, my office can review the notice, the history behind the balance, and help determine the appropriate next steps.

This article discusses an actual type of IRS collection matter handled by our office. All taxpayer-identifying information has been omitted. The case described is ongoing, and no particular outcome is represented or guaranteed. Every taxpayer’s circumstances are different.