Defense Against Enforced Collection by Taxing Authorities

For those taxpayers that owe taxing authorities, such as the IRS, back taxes, penalties, and interest, and that have for whatever reason not satisfied those obligations, the taxing authority has the ability to take what is known as enforced collection action. This consists of a variety of measures, such as levying bank accounts, social security payments, or other amounts owed to a taxpayer. It also includes wage garnishment, and the filing of notices of federal tax lien with the secretary of state’s office or a local county recorder, the effect of which is to encumber property located in that jurisdiction. In addition, the IRS or the Department of Justice, Tax Division (through court proceedings), can takes steps to foreclose on and sell real property to satisfy tax debts.

However, taxpayers are not powerless to stop enforced collection. In fact there are a number of options at a taxpayer’s disposal that allow for the limiting of these procedures, such as innocent spouse claims, submission of an offer-in-compromise, request for an installment plan, initiation of a collection due process proceeding in the United States Tax Court, and bankruptcy. Each of these options has its own advantages and disadvantages and must be carefully considered for its strategic value as well as its practical implications.