If you owe money to the IRS, ignoring the problem is rarely a good strategy. But in 2026, dealing with an IRS collection matter can also require more patience, preparation, and attention to deadlines than many taxpayers realize.
The IRS has gone through significant staffing and operational changes. According to the National Taxpayer Advocate, the IRS workforce declined by roughly 27% leading into the 2026 filing season. The Advocate noted that the loss of employees and experienced personnel has made personal assistance harder to obtain in some situations and contributed to longer resolution times for complex account matters.
At the same time, the IRS collection system has not disappeared. Taxpayers continue to receive balance-due notices, lien notices, levy warnings, and other collection correspondence.
That combination creates an important message for taxpayers:
IRS staffing challenges do not mean IRS tax debt should be ignored.
The IRS Still Has Powerful Collection Tools
When federal taxes remain unpaid, the IRS has several methods available to collect the debt.
Depending on the circumstances, these can include:
- Filing a Notice of Federal Tax Lien
- Levying bank accounts
- Garnishing wages and other income
- Seizing certain property or rights to property
- Applying future tax refunds against the balance
- Assigning certain accounts to private collection agencies
- Certifying seriously delinquent tax debt to the State Department
For 2026, the threshold for certification of seriously delinquent federal tax debt is $66,000, subject to statutory requirements and exceptions. Certification can potentially result in denial or revocation of a U.S. passport.
Not Every IRS Notice Means the Same Thing
One of the biggest mistakes taxpayers make is treating every IRS collection notice as just another bill.
Some notices carry important procedural and appeal rights.
For example, a taxpayer who receives a final Notice of Intent to Levy, such as an LT11 or Letter 1058, may have only a limited period to request a Collection Due Process (CDP) hearing. A timely CDP request can provide an opportunity to challenge certain collection actions and propose collection alternatives before the IRS Independent Office of Appeals.
Similarly, taxpayers receiving a Notice of Federal Tax Lien filing may have important appeal rights.
This is why IRS correspondence should be reviewed promptly rather than placed in a drawer to deal with later.
Owing the IRS Does Not Necessarily Mean Paying Everything Immediately
Taxpayers sometimes assume there are only two possibilities: pay the entire balance immediately or face IRS enforcement.
The collection system is more nuanced.
Depending on a taxpayer’s financial circumstances and compliance history, potential resolutions may include an installment agreement, an Offer in Compromise, Currently Not Collectible status, penalty relief, or another collection alternative.
The IRS currently offers payment-plan options for qualifying individuals and businesses, including its newer Simple Payment Plan framework.
The appropriate solution depends on the facts. A payment arrangement that works for one taxpayer may be unnecessarily expensive—or completely inappropriate—for another.
Financial Analysis Matters
In many collection cases, the real issue is not simply:
“How much do I owe?”
The more important questions may be:
What can the IRS legally require me to pay, over what period, and based on what financial information?
When negotiating certain collection alternatives, the IRS may examine income, necessary living expenses, bank accounts, investments, real estate, vehicles, business interests, and other assets.
For business owners, the analysis can become considerably more complicated because the IRS may need to evaluate both business and personal finances.
Proper preparation before submitting financial information can therefore be extremely important.
Representation Can Make a Difference
Taxpayers have the right to represent themselves before the IRS. They may also authorize an eligible representative, including a CPA, attorney, or enrolled agent, to represent them.
A properly authorized representative can communicate with the IRS, review account information, advocate for the taxpayer, negotiate collection alternatives, address procedural issues, and help the taxpayer understand the consequences of different resolution strategies.
This becomes particularly valuable when a case involves multiple years of unfiled returns, large balances, liens, levies, payroll tax liabilities, business taxes, appeals, or complicated financial circumstances.
Representation Has Its Own Challenges Right Now
Even getting representation properly established requires attention.
The IRS currently reports that Forms 2848, Power of Attorney and Declaration of Representative, are generally being processed about 12 business days after receipt through normal processing channels. For qualifying individual matters, the IRS Tax Pro Account can provide real-time POA processing.
The IRS has also warned of delays involving certain Centralized Authorization File, or CAF, authorizations as it strengthens protections against identity theft and unauthorized use of representative credentials.
There is another technical issue practitioners and taxpayers should understand: certain modifications to Form 2848 can cause the authorization to be classified as a “modified” authorization on the CAF system. That can prevent the representative from using the Transcript Delivery System or establishing an installment agreement through Tax Pro Account for the affected matters.
In other words, even the way a Power of Attorney is prepared can affect how efficiently a representative can work a case.
Private Collection Agencies Are Still Part of the System
Some inactive tax accounts may be assigned to IRS-approved private collection agencies.
If this happens, the IRS sends a CP40 notice identifying the collection agency. The private collection agency also sends its own confirmation letter and uses a taxpayer authentication process. Importantly, payments are still made to the IRS—not to the private collection agency.
Taxpayers should be cautious about anyone calling unexpectedly and claiming to be collecting an IRS debt.
The IRS normally initiates contact through the mail.
The Worst Strategy Is Often Doing Nothing
Tax problems tend to become more difficult when taxpayers avoid opening IRS mail or postpone dealing with the issue.
Penalties and interest may continue to accrue. Appeal deadlines can expire. Liens can be filed. Levy action can become possible. And taxpayers may lose valuable opportunities to address the problem before it reaches a more serious stage.
If you receive an IRS collection notice, the first step should be to determine:
- What does the IRS believe you owe?
- Is the balance correct?
- Where is the case in the collection process?
- What deadlines apply?
- What resolution alternatives are actually available?
Only then should a collection strategy be developed.
Need Help With an IRS Collection Matter?
At Kaur Accounting & Taxes, we assist individuals and businesses with IRS representation and tax resolution matters, including unpaid tax balances, unfiled returns, installment agreements, penalty relief, Offers in Compromise, financial-hardship situations, liens, levies, and other IRS collection issues.
The goal is not simply to “make the IRS go away.” The goal is to understand the taxpayer’s complete situation and determine an appropriate path toward resolving the problem.
If you have received an IRS notice or have an unresolved federal tax balance, addressing it sooner generally gives you more options than waiting for the IRS to take the next step.
Reach out to us for a consultation and see how we can help.