The staff of WATAX is hyper sensitive to how the IRS works and takes daily notes on how the IRS operates, passing our knowledge to you, our client. IRS Collections and particularly Automated Collection Systems (ACS) has been an enigma really since January 2016 when levies started to decrease. Five years later, ACS still sends pretty aggressive IRS letters. Should you be concerned?
Well, in a word or two, yes, sometimes...
Particularly when your case is assigned to a IRS Revenue Officer (RO). RO's will levy you if you don't cooperate by giving them full financial disclosure and staying current on taxes.
Well, what about ACS? Hmm, sometimes IRS letters like the CP504 or the CP523 can seem pretty scary. And the truth is when the ACS is really rolling they will levy your wages or bank account in 30 to 90 days upon receipt of these. But since 2016? Sometimes for sure, but not as often as you would think.
So, what do you do in this ambiguous IRS collections' environment?
* Be sure to file your last six years of 1040s.
* Stay current on your current year's taxes and pay last year's taxes in full if you can. Staying current helps your Offer in Compromise Math and also helps the case for a penalty waiver.
The Federal government has been pretty generous in the time of Covid. It's a safe bet that the Feds will eventually turn in the opposite direction to claw back unpaid taxes to finance this generosity.