When seeking tax debt resolution, taxpayers should use IRS rules and tax laws to their advantage. There are certain rules the IRS must follow for tax debt and collection. Knowing these rules helps a taxpayer avoid drastically increasing their tax debt or facing aggressive IRS collection actions, which are two consequences a taxpayer may face when delaying resolution of tax debt.

To encourage taxpayers to pay their back taxes as soon as possible, the IRS charges interest and penalties on the tax debt. Penalties and interest accrue each month that the debt remains unpaid. By postponing payment of tax debt, a taxpayer will ultimately pay more to the IRS. For this reason alone, it is important to make early efforts to resolve the tax debt.

Along with charging penalties and interest, the IRS also enforces collection which, in the initial stages, includes sending multiple notices to the taxpayer. If the recipient does not respond to the notices or does not make satisfactory efforts to resolve the debt, the IRS proceeds to the placement of lien and/or levy. In such a case, the taxpayer not only pays more to the IRS because of penalties and interest, but also risks facing collection actions such as garnishment of wages, seizing of property, levy on bank account(s), etc.

An effective method to handle the IRS is to get information about their payment plans and policies regarding tax debt, and to use them to achieve an early and more advantageous resolution. When attempting to resolve tax debt, it is important to stay informed.