As WATAX approaches our 30th year helping businesses and people solve tax problems, we naturally have a close eye on how the IRS operates. In 2018, we see an IRS that is still making doing with less. How could this affect you?
What if you haven't filed taxes? With less scrunity of non-filers, you are in a unique position to think through your best path of filing without IRS pressure. If you are getting refunds, file your last four years. If you owe money and can pay the IRS, try filing 2016 and 2017 (paying penalties and interest on 2016) and see if that satisfies the IRS (they might ask for older, they might not). If you can't pay what owe the IRS, consider filing seven to ten years, owe a lot of money but then settle with an Offer in Compromise (OIC), restoring Social Security credits to boot (particularly if you are self-employed).
When you are behind in taxes. Normally anyone who owes more than $20,000 would be aggressively collected upon by Automated Collection Systems (ACS) who sends letters like this one when you fall behind. The truth of the matter is ACS has been more dormant than we can ever remember. While levies are threatened in the letters, they are rarely going thru except in unique circumstances. On the other hand, the IRS is still issuing tax liens which affect your credit report and get placed on your real estate. With the dormant ACS, it might be the best time to consider filing an OIC as you can do it carefully without the heat of levy fears.
Big cases still handled by Revenue Officers with levy powers. If you have a big nasty tax problem or have a business that is behind on 941 taxes, you will still be collected upon by a Revenue Officer in your area. Nothing has changed here. These folks will levy if you don't comply with their deadlines.
Old tax debts pursued by Collection agency. Somewhat tragically, one of the few active agencies is a private collection agency who pursues often indigent folks for back taxes. Guess what? If you ignore this agency, they do NOT have the power to levy. If you are poor, you should have your case considered as Currently Not Collectible or make an OIC above and go thru the IRS. This most recent round of privatization of the IRS has once again been a waste of money while hurting poor people to boot. Maybe someone in government will finally get the memo: privatization of the IRS doesn't work.
The fact is the IRS is not super aggressive these days except selectively. Acting to solve your IRS tax problem now without the usual heat from the IRS has its merits as you can plot your own course, before the IRS inevitably gets back to its normal activity. A trillion dollar addition to the US debt thanks to recent tax cuts will have to be filled somehow: expect the IRS to get normal funding, eventually, to do its job.