How The IRS Works Collections Cases

When a taxpayer owes money to the IRS, they enter the IRS Collections system. The IRS has a very detailed process that they are required by law to follow when it comes to collecting tax debts. Knowing a little bit about how this system works and how IRS collections personnel are required to act can be very beneficial to you.

There are two distinct collections units within the IRS. The first is the Automated Collection System (ACS), which consists of computerized lien filings, automated send out of bills and notices on set intervals, and the call center agents that perform basic collections functions. It is important to understand that the people you’re talking to on the phone at ACS have limited authority, and may not be able to assist you with every tax matter without elevating to a supervisor or other personnel.

The other distinct collection unit within the IRS is the Collection Field Function. Field agents, called Revenue Officers, are located in cities and towns across the country. Rural Revenue Officers may work from home and have a field territory covering hundreds of miles, while thousands of agents in big cities have extremely small territories and may hardly ever leave their Federal Building.

Revenue Officers are required to do many things in order to “resolve” a tax liability placed under their control. They are required, by law and regulation, to collection certain information, verify things through whatever means available, and close out cases. Over the course of the past year and a half or so, I have personally noticed a significantly reduced emphasis on simply reducing the number of open cases, and instead increasing cash collections through whatever means necessary.

In order to demonstrate to IRS management that they are doing their jobs properly, here are some of the biggest actions that Revenue Officers are required to perform (and document in their files):

  • Make sure you’ve filed every past tax return you should have (and if not, make you do so)
  • Verify that you are making payments on time and in full for any new taxes you have come up, such as employment taxes or estimated tax payments (and if you’re not, making sure that you do)
  • Collect detailed financial information from you concerning your income, expenses, assets, and other debts
  • Based on that financial information, determine sources of money from which the government can collect on the tax debt (this can include forcing
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Tax Practice Daily Checklists

Starting today, I’m going to start sharing the core checklists that constitute my tax practice systems. I’ll be sharing these checklists in order to help you organize your tax practice and make it operate more efficiently. Keep in mind that these systems are constantly changing, based on new lessons learned, input from staff members and clients, and ideas gleaned from books, courses, and seminars from the worlds of sales, marketing, management, and more. As these checklists and systems change, they will be updated on the TaxMarketingHQ.com blog.

I encourage your feedback on these checklists. Be sure to leave a comment on the blog if you have any thoughts to share.

Checklists are organized as layers, like the roots of a tree, starting at one point and branching out and down deeper, and deeper. The Tax Practice Daily Checklist is where I start, and everything branches out from there.

Tax Practice Daily Checklist

  1. Tax Practice Goals Checklist
  2. Tax Practice Daily Marketing Checklist
  3. Tax Resolution Daily Client Checklist
  4. Tax Preparation Daily Client Checklist
  5. Other Client Services Checklists
  6. Tax Practice Business Management Checklist

Checklist Overview

Each of the sub-checklists in the main Tax Practice Daily Checklist serves a core purpose within the overall scope of running a business. The checklist is intentionally oriented towards running a profitable tax firm, and the sub-checklists are presented essentially in order of importance to be tackled each day.

To start, it’s important to take a look at your goals every day. This is to remind you of what you are trying to achieve, why you’re even in business, and to “right your ship” at the start of your work day to give you the proper focus and direction for the day.

Next, the Daily Marketing Checklist guides you through testing your marketing systems to make sure everything that needs to be working is working. These can be simple things like making sure your 800 number and your web site are operational, all the way to making sure that complex automated direct mail fulfillment systems are up and running. The Daily Marketing Checklist comes before client work on purpose: Lead generation and new client consultations are the absolute single most important thing you do every day. This statement may run contrary to what many CPA’s and Enrolled Agents think is true, but think about it: A constant stream of new potential clients coming through your office is what eliminates the up and down … Continue reading

JK Harris Goes Out of Business

Back in October, the largest tax resolution company in America, JK Harris, filed for bankruptcy under Chapter 11, which would have allowed them to continue operating and restructure their debts under a payment plan.

However, their largest creditor, which appears to have had a claim against the company exceeding $11 million, has decided not to allow them to restructure the debt, and has instead seized all the companies cash and assets in a liquidation of the company.

This means that, within the past 15 months or so, the 3 largest tax resolution firms in the United States have gone out of business, either by bankruptcy or government action. A little over a year ago, American Tax Relief in Los Angeles was shut down by the FTC, and the owners are facing numerous criminal charges. In early 2011, Roni Deutch was shut down by the California Attorney General, and Roni herself was forced to turn in her law licensed and faced state perjury charges.

JK Harris has been the target of several class action lawsuits regarding their sales practices and poor customer service. They have also been investigated by the Attorneys General for several states.

If the closing of JK Harris has left you in a bad place regarding your tax matters, please contact a local taxpayer representation firm from our directory.… Continue reading