As we have reported on our blog for the last several years, the IRS - ACS (Automated Collection Systems) had significantly reduced levies against individuals who owed back taxes since early 2016. Here in the summer of 2025 - that appears to have changed. If you have received an IRS notice LT-11 and do not communicate with the IRS to work out a payment plan, settlement or hardship status, you are definitely in danger of getting levied on bank accounts or wages.
But not everyone is getting levied (so far), here's some of the situations in which we have seen levies for:
High Balances Due - $100,000 plus balances - A client of ours who recently got a LT-11 and several others have received bank levies.
High Incomes - any balance due - if you are a high earner - 150,000 plus income - you are in jeopardy of being levied no matter what you owe.
How does WATAX handle ACS cases for our clients? When the LT-11 is sent , we make sure we get a hold on cases for clients. Later after all of our client's returns are filed, we file an Offer in Compromise to settle the clients debt, work out a livable agreement with a financial statement or submit a financial statement asking for client's case be put in a two year "Currently Not Collectible."
Why has the ACS been so dormant on levies and for so long? COVID definitely explains three years of it: 20 21 22 were definitely years where the IRS put its resources elsewhere: handling phone calls, Covid rebates and ERC credits. Otherwise, the IRS - with a bit less funding than previous - just didn't prioritize. As we have mentioned on the Election blog posts, the Trump 1.0 administration collected more taxes thru collections than any other presidency.
